February 28, 2002

Regulation reform can help jump-start the region

Kauri Investments Ltd.

The Puget Sound region experienced negative job growth, to the tune of over 36,000 positions, for the first time in over 18 years in 2001.


For business leaders, government leaders, and public and private employees, that news should have rung like a warning bell. It is employment opportunity that drives our economy.

During prosperous years, when our region was booming as a place to seek employment or to do business, regional and local governments loaded regulations and costs of infrastructure onto the backs of new developments.

The Growth Management Act, GMA, restricted the boundaries where development could occur, effectively raising the costs of properties inside the boundaries.

With a growing economy, and increased demands on a limited housing stock, new developments were able to shoulder those burdens and pass them along to the end consumer via increased housing prices.

But now we have entered a new era, and it is time for the business community to convince our regional and local governments to change their policies. Our leaders need to recognize the damage that can be done, especially during times of recession, by treating our businesses as anything less than customers. Let Boeing’s decision to move its headquarters to Chicago be a wake up call to our regional governments and leaders.

Northgate Mall’s case

On a quieter note, consider the Northgate neighborhood in Seattle. The owner of Northgate Mall has been trying to redevelop its property over 10 years. It was to be a three-stage process, with the property south of the mall developed during the first phase. This phase was to include a new multi-screen movie complex, along with restaurants and an outdoor pedestrian courtyard, all of which would have revitalized the environment for their existing retailers.

Unfortunately, after nearly a decade of process (required reviews by the neighborhood, the community and the city), and its frustration and expense, the owner of the mall has abandoned the plans for redevelopment.

Part of the property to the south of the mall has been sold to King County, and the remainder of the parcel remains undecided after several unsuccessful attempts at selling it. The former medical building at the north end of the mall is vacant and closed, the existing single-screen movie theater is tired and outdated, while the number of vacant storefronts and struggling retailers in the mall have increased.

What is our government’s responsibility to those businesses and their employees?

Northgate was designated as one of only five urban centers in the city, under the GMA. It should have seen a significant increase in development during the last eight years (it was named an urban center by the city in 1994). However, since 1994, this area has not even reached 6 percent of the housing goal targeted under GMA.

Meanwhile, at the city of Seattle, the Northgate Plan is the only neighborhood plan, out of 38 in the city’s comprehensive plan (that was created after GMA), which has not been modified. Even without an update under GMA, the creation of a Northgate plan has not increased the speed or the predictability of the permitting. In fact, the city has continued to make it even more difficult, by requiring any developments over 6 acres to go through an additional special process of costly neighborhood, community and city review.

We, as a community must create more certainty for our businesses if we are to have any hope of retaining them. City and county plans should be something that can be depended upon. Process and permitting times must be reasonable for those trying to conduct businesses.

The price tag of allowing one individual or group to stop and/or slow down the process will be the continued downfall of our employment market, if we do not change. When asked who would choose to do business in our current environment, the answer today is fewer and fewer companies.

Before we lose another Boeing, or tie the hands of another business owner, let us convince our leaders to change how they view businesses.

The city and regional governments must review their role in how they handle their customers. Current regulations and processes should be reevaluated, and those that are unrealistic or offer few real benefits must be eliminated.

The current market conditions demand it if we are to succeed as a region.

James B. Potter is chairman of Kauri Investments Ltd. He also is chair of the Land Use Committee of the Greater Seattle Chamber of Commerce, and co-chair of the Central Business District Oversite Committee of Lynnwood.

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