May 21, 1999
Tarragon spices up Seattle real estate
By MARC STILES
Journal Real Estate editor
Northwest natives Joe D. Blattner and Michael J. Corliss never knew one another when they were growing up just a few miles apart. Thirty-some years later, the blend of their strikingly complementary business talents into Tarragon Development Co., is turning heads across the Puget Sound region.
Blattner was reared in Auburn and Corliss in Sumner, the Pierce County town where his family's roots reach back four generations.
It's also where Tarragon is developing a 2 million-square-foot, master-planned industrial development called Valley South Corporate Park. In a span of about six months, two trade groups named it the region's best industrial development of the year.
Tarragon has another large industrial development in the works nearby and some smaller ones in Kent. But the company isn't limiting itself to South End industrial.
On the Sammamish Plateau, Tarragon has begun construction of a very different sort of project, a mixed-use development called Saffron. It includes 99 upscale apartments plus 47,165 square feet of space for shops and restaurants. The retail portion, according to a promotional packet, will resemble a Moroccan marketplace.
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Tarragon's 2-million-square-foot Valley South Corporate Park won points from those in the real estate industry for pioneering large warehouse space in Sumner. |
The philosophy of the young development company led by its two youthful principals is to focus not on a particular product type or neighborhood but on opportunity in general. "The day you stop being opportunistic, you lose your focus and your competitive edge," said Blattner.
Corliss is the financial wizard and Blattner is the detail man who runs Tarragon's day-to-day business. Tarragon has no equity partners nor a board of directors; instead, it's Blattner and Corliss and a dozen employees. By working independently, the developers say they can respond quickly to opportunities.
"We are very, very nimble," said Corliss.
Blattner and Corliss' accomplishments are noteworthy by themselves but are magnified when one considers that Corliss is 39 years old and Blattner is 35.
To Blattner, age is irrelevant. He takes a zen-like view by noting the youth factor diminishes over time. "I don't see it as anything odd," he said.
Both men got head starts by recognizing at young ages that they wanted to be entrepreneurs.
"I always wanted to be on this side of the business -- the development side," said Blattner, who not only picked his profession early on but nailed down his career path as well. That trail was through construction management studies at Washington State University.
Corliss' business career began at an even earlier age. At about 14, he launched a logging enterprise that salvaged cedar logs from Lake Tapps near his hometown. He and a partner, Brian J. Urback who still works with Corliss, pulled out enough wood to make a couple thousand fence posts or rails each year for four years.
Corliss studied business finance and Eastern religions at the University of Puget Sound. Six months after he graduated, construction began on his first apartment project: a 36-unit development in Puyallup.
Corliss' company, Investco Financial Corp., went on to develop 4,500 apartment units. Most of them are along the Interstate 5 corridor between Bellingham and Vancouver, Wash. Urback is president of the 80-employee company, which is based in Sumner and no longer develops apartments and instead only manages them. Now Corliss directs his development ambitions through Tarragon.
It was the Valley South Corporate Park project that kicked things off for Tarragon. At the time, Blattner worked as an operations manager for Sierra Construction of Redmond. His boss, Sierra President Roger Collins, said Corliss inquired whether the company would help him develop the Sumner industrial park.
Collins eventually sold his interest in Tarragon, leaving Blattner and Corliss as principals. He knew it was an ideal match.
"Mike didn't want to think about the details of a big industrial project," Collins said. "Joe was the logical person to carry it out."
The way Collins sees it, Corliss is "the big picture guy" and Blattner is the detail-oriented organization man.
"Joe's just a dogged, determined guy and Mike being financial genius he is, it was a great combination that was destined to do well," Collins said. "Mike had the foresight to tie up the [Valley South] ground years ago. The market wasn't even there and they went out and created the market. It was a stretch three or four years ago to think about going to Sumner.
"Just about everything they touch ends up having a golden touch."
In the last six months, judges in two professional competitions selected Valley South as the Puget Sound region's top industrial project of the year. The foresight factor nudged the project to the top of the judges' list.
"They were kind of pushing the frontier for that type of a project that far south from Seattle," said Walt Niehoff, an LMN Architects partner and a judge for the National Association of Industrial and Office Properties contest. "They got big points for pushing the envelope in terms of location."
Niehoff added that the ages of the "two young guys" also played a part in the judges' decision. Development typically is the realm of people who are older and more established.
Blattner and Corliss "have taken the big jump off and it's sink or swim," Niehoff said. "They're obviously swimming, and swimming well."
The Society of Office and Industrial Realtors also named Valley South the top industrial development of the year.
Earlier this year, Tarragon sold 94 acres of the Valley South project for just over $25 million to Costco. Officials of the Issaquah-based international bulk warehouse retailer say they plan to build, in phases, a distribution center in excess of 1 million square feet. This is in addition to Tarragon's plans for 2 million square feet.
At Valley South Tarragon has built three warehouses totaling 700,000 square feet, and all of that space is leased. It is building two more warehouses that will total 330,000 square feet, with 200,000 square feet already leased. In 2000, Tarragon plans to build the balance of the development.
Blattner believes Valley South is succeeding for several reasons. "It is the most competitive alterative in the market," he said. Its large size affords "a lot of economies of scale," and it's "modern, next-generation space."
Where before 24-foot floor-to-ceiling heights were the norm, Valley South offers 30-foot heights. It also has "wide, ample" truck maneuvering areas with 200 feet between bays vs. the sold standard of about 150 feet, Blattner said.
"It's the same sort of thing we plan to do up at Greenwater," he continued, referring to Tarragon's next big industrial project. The company continues seeking government permits to build Greenwater Corporate Park on 150 acres that are in unincorporated Pierce County but in Sumner's urban service center.
In Kent, Tarragon has signed a deal to buy an 8-acre parcel on South 228th Street in Van Doren's Landing for an infill project, and the company is pursuing land for some similar projects. Blattner could not discuss the specifics of those.
Tarragon is positioning itself to do more mixed-use projects. A comment by one of the company's new hires, Roger Koodoo from Vancouver, B.C., offers insight into Tarragon's opportunistic philosophy.
Many Puget Sound-area developers bemoan the dearth of buildable land, especially in Seattle. Conversely Koodoo, who previously worked for Cascadia Development in his hometown and has 11 years of architectural and development experience, sees Seattle as "a naked city" with plenty of possibilities for innovative projects.
"Roger saying Seattle is a naked city, well, compared to Vancouver he's right," Blattner said. Seattle has a long way to go to catch up, he added.
Tarragon, with its view that the glass is half-full and not half-empty, is poised to not only help the Emerald City catch up with its Canadian cousin but also pursue other opportunities in various markets, including out of state, Blattner said