May 24, 2004

Kent Station fires up other developers

Rendering courtesy of Valley Bank Valley Bank is developing a $3 million office-retail building in downtown Kent.

After years of languishing, it appears downtown Kent's time has come.

A $100 million mixed-use project, Kent Station, is prompting a handful of other developers to invest in the South End city's downtown.

"I think Kent is one of those places that is right on the cusp of developing," says one investor, Jack Alhadeff, who recently bought a 68-year-old building that's being refurbished.

Valley Bank is planning a $3 million office and retail project, and Don Shaffer wants to turn his family's landmark grain elevator into a retail and residential project.

Last week, scores of brokers and other business people jammed a restaurant to hear the developers outline their plans. At times, it seemed more like a pep rally than a luncheon.

"I've been around here 24 years, and this is the most energy I've ever seen," said Sally Goodgion, president of Catalyst Travel.

City Council President Julie Peterson said that over the next 18 months the neighborhood expects to see $80 million worth of public and private investments.

The overall economy of Kent, population 84,200, has remained healthy. It is one of the largest warehouse and distribution hubs in North America, with more than 45 million square feet of industrial space, and is a major manufacturing center.

But Kent's downtown flagged as shoppers were drawn to malls in neighboring Tukwila and Auburn.

It's not as though there has been no development in the neighborhood. In the mid-1990s, King County built the $108 million Regional Justice Center. Several years later, Sound Transit spent $18.3 million to construct a commuter rail station and transit hub.

But it wasn't enough to spur much private investment, until now.

Kent Station

To help turn things around, city officials bought 18 acres between the rail station and justice center, and struck a deal with Seattle-based Tarragon Development Co. to build Kent Station. Kent paid about $16 a square foot between 1999 and 2001, when the economy was booming.

In January, Tarragon officials, citing a weakened economy, said they could pay only about $5 a foot for 10 acres. After several months of debate, the City Council agreed to Tarragon's terms, and gave the developer an option to buy the other 8 acres.

The first phase of Kent Station will total 150,000 square feet and cost $39 million. A Tarragon spokesperson said Lease Crutcher Lewis has been hired as the general contractor. Work is scheduled to begin June 30.

The anchor tenants are Green River Community College, which is leasing more than 20,000 square feet, and a 14-screen AMC Theater Cineplex. Blatteis Realty's Maria Royer, who's in charge of leasing Kent Station, says AMC officials project their cinema will attract 940,000 people a year.

Almost 78,200 people, with average household incomes of $79,500, live within three miles of downtown. The demographics are strong, Royer said, "no matter how you slice and dice it."

Kent Station one day will total 470,000 square feet of retail, office, residential, entertainment and educational facilities.

Others get onboard

Seeing these numbers, Alhadeff and others were motivated to act.

"This is my first move into Kent," says Alhadeff, who last month bought the 18,000-square-foot Bouldron Building at 214 W. Meeker St. He declined to say how much he paid, but King County records indicate the purchase price was $825,000. The Bouldron has 11 apartments above first-floor retail.

As Alhadeff addressed last week's luncheon, a construction crew was working on his building several blocks away.

"We are just trying to bring it back to the way it was in its glory days," he said. Sounder commuter rail service also played into his decision to invest in Kent.

"I think everything up and down the Sounder (line) will see growth," Alhadeff said.

Eighteen months ago, Valley Bank opened a Kent branch. Senior Vice President Mike Miller said it has grown to $11 million in assets. Now the bank plans to build a 22,000-square-foot, office-and-retail building. Miller estimates the cost at $3 million.

The bank, which will occupy 3,000 square feet, has hired Steve Harris of Northwest Corporate Properties to market the rest of the space.

North Pacific Design designed the building, and Rush Commercial Construction Co. is the contractor. Both are divisions of The Rush Companies of Gig Harbor.

The building will be constructed on the site of the Edline-Yahn Funeral Chapel, 424 W. Meeker St. Work will start in June and completion is set for April of 2005. The bank paid $525,000 for the 26,000-square-foot property.

Shaffer said eventually he plans to turn his family's 20,000-square-foot grain elevator, which abuts the Sounder platform, into a restaurant, retail and housing. He has not hired an architect for the project, which he calls Shaffer's Mill.

"Once Kent Station is up and once there's more residential downtown, (the neighborhood) will reach a critical mass," said Shaffer.