September 26, 2002

SoDo rezone pits industry against developers

Should it be protected for industry or redeveloped into mixed-use?

By ARI KRAMER
Special to the Journal

Dave Gering believes some of the rhetoric about rezoning Seattle’s “South of Downtown” district north of Spokane Street. He agrees with real estate brokers who said the city will gain little by limiting the streets that straddle Safeco Field and the Seahawks Stadium to manufacturing and light-industrial sites.

But as director of Seattle’s Manufacturing Industrial Council, Gering worries a wholesale SoDo rezoning will spark pressure to open the greater Duwamish to residences and retail stores.

"As we continue to grow, the harder it will be to have (industrial) zoning."

-- Henry Liebman,
American Life

By opening all of SoDo to mixed-use development, Gering believes the city could alienate industries that have generated profits there for decades.

“The moment people come in, they’ll start complaining about industry,” he said. “Many of our members are really schizophrenic about it. They have as much of a right to be here as the people who want to see the area rezoned.”

Heated talks have been brewing lately between MIC members who want to preserve Seattle’s industrial core and commercial realtors who see SoDo and the Duwamish as an emerging possibility for new development and redevelopment near downtown.

Much of the discussion revolves around Seattle’s SoDo district, initially an acronym for “South of the Kingdome” but now a reference to downtown. SoDo runs from South Jackson Street south to Spokane Street and from Marginal Way east to 14th Avenue.

Commercial broker Rick Osterhout is leading the push to rezone SoDo. He envisions a Seattle stadium district anchored by residential, service-sector and retail development — and, if voters approve initiatives — served eventually by monorail and light rail lines.

“We’re going through structural changes in our economy,” said Osterhout, senior vice-president of Insignia Kidder Mathews. “We need to have more people here spending money.”

Likewise, while SoDo’s most fruitful manufacturing areas “could be carved out” of a zoning change, real estate investor and developer Henry Liebman said it makes little sense to arbitrarily protect industrial properties if retail promises more jobs and a bigger boost to Seattle’s tax base.

“If Seattle grows, people will want to be near the center,” said Liebman, whose company, American Life, owns 14 properties on both sides of Spokane Street.

“No matter how you slice it, as we continue to grow, the harder it will be to have (industrial) zoning. The marketplace will determine what the right uses are.”

Seattle City Council President Peter Steinbrueck said the city, in keeping with its comprehensive land-use plan, has an obligation to protect the city’s industrial core — even if rising land values create pressure to rezone SoDo and the Duwamish.

“I think the pressure is always going to be there,” he said. “People will always want higher and better use. But that’s what zoning is for.”

MacMillan-Piper, a SoDo container-freight company and MIC member, thrives on its proximity to the Port of Seattle. Also, as MacMillan employees stuff and un-stuff ocean containers, they stand between truck and rail routes, a great help for sending cargo across the United States.

MacMillan Vice-President John Odland worries mixed-use zoning in SoDo would increase congestion north and south of Spokane Street. “The more pedestrians and passenger vehicles you have here takes away from the area’s advantage as a fast-freight corridor,” he said.

Many MIC members arrived in Seattle during the Alaska gold rush and are now third- or fourth-generation and own their buildings outright. Despite the exodus of some former Duwamish industrial businesses to Kent in recent years, Gering said, only one MIC member has folded since he took over in 1997. “Good economic development policy is building on what you’ve got,” he said. “What we’ve got are successful industrial businesses that continue to want to call Seattle home.”

Osterhout said he’d support further rezoning south of Spokane Street if a comprehensive study showed such a change would boost Seattle’s tax base and create more, better-paying jobs than the Duwamish will otherwise produce in years to come.

The problem is, he has yet to see such a study.

“We need more data on the employers, the space, average pay, the amount of growth,” he said. “The number-one problem is ignorance. It results in fear, and fear results in bad policy. We need to be realistic about what’s going to expand and what isn’t.”

Initially formed as a municipal advisory body on industrial matters, the MIC became a not-for-profit business association five years ago and now stays afloat largely through annual membership dues and advertising revenue raised by its quarterly magazine.

The MIC recently held a welding class to help ex-prison inmates and ex-substance abusers find manufacturing jobs. And Gering and a two-member staff use the pages of “Seattle Industry” to highlight the economic, transportation, zoning and other policy concerns of businesses in the Duwamish, which runs from South Jackson Street, through South Park and past city limits along Airport Way.

The need to bolster the valley’s transportation infrastructure also prompted the MIC and King County’s Commute Trip Reduction Services to organize the Duwamish Transportation Management Association this summer. DTMA members include Starbucks Coffee, Vulcan Northwest, Charlie’s Produce and Nelson Trucking.

“We can’t all be selling lattes. At some point, you have to be marketing exportable products that can be bought by someone else’s wealth,” he said. “We need to constantly remind people we’re here.”

Steinbrueck support’s the MIC’s agenda. If anything, he believes the organization should work more aggressively to give its members a voice: He’s open to rezoning north of SoDo’s stadium district but wary of any such changes farther south.

“Having a viable industrial base in this city is essential,” he said. “If we don’t support the sector, we’ll drive them out. Expansion is limitless in other sectors. It’s not in manufacturing and industry. With each loss, we’re less likely to be able to maintain that base.”

Ari Kramer is a Seattle-based freelance writer.

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