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January 6, 2000

Developers eye TODs with interest but some concern

  • Kauri says transit will be 'frosting' on its Capitol Hill development
  • By RAGAN WILLIS
    Journal Staff Reporter

    Since early last year, county and city leaders in the Puget Sound area have run an elaborate marketing campaign to sell the private sector on transit-oriented developments, also known as TODs.

    Numerous King County-sponsored workshops highlighting the merits of building around bus stations, plus the city of Seattle's community-wide station area planning blitz, seemed to open new world of opportunities for developers.

    "We're not necessarily encouraging development, but we do want to make it easier for developers to build projects appropriate for areas surrounding the stations," said Laura Paskin, spokesperson for the city's Strategic Planning Office.

    Kauri development
    Preliminary sketches for Kauri Investments' transit-oriented development at Madison and Broadway show two 25-story residential towers with retail above Sound Transit's Capitol Hill station.
    City staff are revising land use codes to guide developments that serve high-transit areas, Paskin said.

    But despite the seminars, field trips to other cities' and financial incentives, some developers say they still aren't buying. Well-designed transit stations could be a bonus, but don't guarantee a good project, they say.

    First, TODs are new to Western Washington. Many issues -- including convincing folks that living near or atop a major bus or train depot is a benefit -- still need to be worked out. Second, mass-transit may not catch on, and if the station flops, anything dependent on the station will too.

    "Sound Transit's system isn't going to be running until 2006 at best," said Jim Potter, chairman of Kauri Investments. "That's a long way out and we don't know how the region will look then."

    Potter said he was advocating transit-oriented development before TODs became the new hip word in development jargon, but he wanted to wait to see how government agencies and the real estate market adapted to the idea before launching any of his own projects.

    "We were initially interested in the Overlake Park-and-Ride development, but that's the first TOD ever done in this region and the hurdles could have been murderous," he said.

    Read more about TODs in: TOD plan for U District stalled by I-695
    Langly Properties Vice President Bill Angle admitted that working out the logistics for the pilot project was a challenge, but is confident of its success: It's the right project at the right time for the Eastside, he said.

    And Potter also thinks the time is right for TODs.

    His firm is planning two approximately 25-story towers of market-rate housing on property it owns at the corner of Broadway and Madison Street on Capitol Hill, where Sound Transit will put a station portal descending into the light rail tunnel.

    Kauri Project Manager Scott Nodlund said preliminary plans include a three-level outdoor "people plaza" fronting Madison, a covered neighborhood marketplace in an existing alley. The station entrance, accessed from Broadway and Madison on the lower plaza level, would feature retail shops leading to the station's elevator lift.

    "This is all still very conceptual, and hasn't been approved by the surrounding community yet," he said. "But we're proposing a very good project that will be a gateway to the Capitol Hill, First Hill and Pike/Pine neighborhoods."

    Kauri President David Lightfoot admits he once doubted whether Sound Transit's rail system would ever be built. Now he is more optimistic about light rail, but still cautious. The project won't go forward if its merit as a stand-alone development is questionable, he added.

    "Light rail certainly looks more likely to happen than it did six months ago," Lightfoot said, "but the site is terrific already. The transit system just makes it better."

    "As in-city developers, we're interested in transit-oriented developments -- not transit-dependent developments."

    Kauri hired Peter Ker Walker, an internationally renown landscape architect, to design the plaza. Walker boasts an impressive portfolio including the Tokyo Aquarium, several U.S. embassies, and one of Paul Allen's estates. Runberg Architecture of Seattle is the project designer.

    While a good site plus a good project generally equals success, Kauri Chairman Jim Potter says there are still a lot of unknowns.

    "We drew up some plans and submitted them to the city, but haven't heard anything yet," Potter said. "We don't know who will own the property or if we will be leasing it or what. It's all very unclear right now, and we're basically on-hold seeing how it works out."

    "I'm not necessarily fearful of anything. We'll see what Sound Transit is really going to deliver. After all, the system won't be running until 2006," he said. "There's a lot of variables and a lot of players involved here -- we're just waiting for people to stop talking about dreams and be real. Then we'll move forward."

    Nodlund says Kauri's take on building transit-oriented projects isn't unusual. Other developers also seem to be banking on the quality of the project and existing demand rather than the future rail.

    For instance, the Overlake project, co-developed by King County and Langly Properties of Bellevue, fills a critical need for housing on the Eastside, he said. Because it meets a current demand, the project should fly with or without transit.

    Quoting a consultant from California, Nodlund said "Transit is frosting on the cake. We know that the project has to be successful without it, to be successful with it."



    
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