December 11, 2003
Yakima Valley real estate heats up
By DAVID MCFADDEN
Yakima County Development Association
Real estate is on a healthy rebound in the Yakima Valley, helped along by a proactive business community and favorable market indicators.
Commercial space is growing and residential transactions are closing at a brisk pace. Real estate industry observers attribute the increased activity to several factors — attractive interest rates, Yakima Valley's central regional location, abundant workforce resources, pro-business attitude and quality of life — crediting each with helping to deliver high-yield growth in this community of 220,000.
“We're busy here,” said Bill Almon Sr. of Prudential Almon Realty. “It's not just fielding calls. We're putting deals together, too.”
Yakima County reached several real estate sales records to close the summer, boosted by solid commercial transactions and a new residential volume high. That trend continued into the fall, with year-to-date sales figures up 25 percent through October, according to Kristi Wilbert, who tracks real estate in Yakima County.
Several large commercial transactions, including the sale of Providence Yakima Hospital in August and many recent expansion and new construction projects, infused a welcome shot of adrenaline into the market. The activity spans commercial, industrial and retail sectors, suggesting well-rounded momentum.
Wal-Mart's new regional distribution center being built in Grandview is among the largest of the construction projects. Others include a significant expansion of Yakima's convention center, construction of a wine country visitor's center and renovation of a large shopping mall.
Incentives proving beneficial
Programs that streamline the permitting process and offer businesses incentives to relocate and expand in the Yakima Valley are making a sizeable impact. Those programs are winning positive reviews from businesses, resulting in millions of dollars in real estate projects.
One of those programs is a recently-instituted customer service permitting guarantee that establishes predictability in the commercial and residential permitting process in both the city of Yakima and Yakima County. The streamlined process moves projects through the permitting stage efficiently and provides businesses their money back if permits are not issued on time.
“We're willing to take a good hard look at our processes to identify ways to improve,” said Yakima Mayor Mary Place.
Another key tool is Yakima County's Supporting Investment in Economic Diversification program, which takes advantage of a state law allowing 0.08 percent of locally-generated sales tax money to remain in rural counties. Yakima County's $10 million-plus investment over the past four years in public works projects that support private business growth has turned into more than $100 million in capital investments by expanding and relocating businesses.
Securing the commitment from Wal-Mart to build its $40 million distribution center is one of the biggest wins for the SIED program. Construction on the facility began last spring. When finished, the 880,000-square-foot facility will support the company's Pacific Northwest grocery outlets and create up to 600 jobs.
Making use of Yakima County's designation as a “renewal community” has also yielded new construction and expansion projects. Yakima is one of 40 cities nationally, and one of only two in the Northwest, with the designation, which brings $12 million in tax incentives a year for 10 years.
The Yakima Herald-Republic, the community's daily newspaper, took advantage of the program when it built a new press building, as did the developers of a new Marriott-Fairfield Hotel. Washington Fruit Co. also used the tax incentives to expand its produce warehouse.
“That's just like money in your pocket,” said Dave Schuler of Coldwell Banker. “And then you get more investment tax credits from hiring people in targeted areas.”
The opening of the Barrel House restaurant and wine bar may best capture the program's potential and most-fittingly exemplify the new opportunities and direction unfolding in the Yakima Valley. The Barrel House owners rehabbed a rundown tavern in the heart of downtown Yakima to give it an upscale look, and in the process uncorked one of many economic opportunities the region's emerging wine industry has produced.
The industry has fermented for several years, and with real estate projects like the Barrel House and opening of a 1,700-square-foot wine country visitors' center last spring, may be ready to serve up an economic boost to the region. Already nearly three dozen Yakima Valley wineries line a 55-mile stretch of Interstate 82, and the quality of wines is winning regional and national acclaim.
Investors from out of the area, increasingly aware of the region's growing reputation, are inquiring about winery and vineyard business opportunities, Almon said.
“It's good that the word is getting out,” he said.
Favorable business variables
New construction and renovation work have produced a steady stream of real estate projects throughout the Yakima Valley. Companies are taking advantage of the valley's low cost of doing business, abundant land and reasonable leasing rates.
Up Interstate 82 from the new Wal-Mart distribution facility, the Yakima Valley Visitors and Convention Bureau has undergone a $6.7 million expansion that nearly doubled the size of the facility. The existing portion of the convention center, built in 1976, was remodeled to match a new modern exterior that is heavy on glass and steel accents.
Major retail projects, like the remodeled Valley Mall in Union Gap, a suburb south of Yakima, and a proposed 37-acre retail center to the north in Selah, also are gaining notice. The Valley Mall renovation, completed a year ago, has attracted new anchor tenants and an adjacent 11-acre Valley Mall Plaza.
Even the manufacturing sector, where the news of late has not always been good, provided a boost to Yakima County's industrial real estate market. TubeArt, a commercial, retail and sports venue sign maker, recently leased the Health Signs building adjacent to Perry Technical Institute to meet its expansion needs. Meanwhile, fiberglass and vacuum-formed products manufacturer Amtech continues to shift its production operation to the Yakama Nation industrial park site in nearby White Swan from its Yelm, Thurston County, headquarters.
“We still get inquiries from businesses outside the Yakima area interested in moving over here,” Almon said.
Growth in the residential market has followed the expanding commercial, industrial and retail activity. Homes are selling more often and for more money this year, as residential activity has seen increases in both number of sales and value, according to Wilbert.
Despite the growth in countywide sales revenue, the average home price remains an affordable $123,285.
Movement in the existing home supply has also generated interest in larger residential projects. Apple Tree Resort Community, a neighborhood built in a 100-year-old apple orchard around a championship-caliber golf course, offers high-end homes and condominiums. Plans for a 73-acre development that would add 320 single-family homes have been announced in Moxee, a community southeast of Yakima along Highway 24.
Affordability, an attractive selection of houses and a strong resale market are among the selling points proponents of Yakima Valley are trying to impress upon workers at the Hanford Nuclear Reservation in an attempt to grow real estate sales even more. Community leaders believe that group represents a slice of highly-qualified home buyers that has gone largely untapped.
“It's not showing any signs of letting up,” Schuler said. “It's just not doing that. It's not even peaking out.”
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