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Brian Miller
Real Estate Editor

September 13, 2018

On the Block: Big changes are in store for old Sears site: MGP plans housing, retail at Shoreline Place

Long before the Sears finally died, the city of Shoreline had big dreams of revitalizing the moribund Aurora Square shopping center.

That roughly 70-acre trapezoid had been anchored since 1967 by the Sears at 15711 Aurora Ave. N. But the recession, rise of Amazon and retail apocalypse all led the city toward an optimistic mixed-use redevelopment vision: a new urban village, also to be called Aurora Square.

The plan survives, but the name is now dead.

That's because Merlone Geier Partners bought the almost 17-acre Sears property last summer for almost $15 million. Sears closed this spring. In January, MGP began the community meetings and groundwork for the project it announced last month: Shoreline Place. The permit process has not yet started.

Rendering by GGLO [enlarge]
GGLO is designing the four-phase project, with about 1,300 housing units, 90,000 square feet of commercial space and a new public park, Town Green.

Shoreline's economic development manager, Nathan Daum, says the city will follow MGP's lead in the change of branding. “It's Shoreline Place,” he says. “It's significant. They're a major player in the industry.”

In a release, MGP's Jamas Gwilliam said, “We conducted a survey of over 6,000 area residents, and the main things they wanted to see at Shoreline Place were more dining and housing options. We're excited to bring those options to the community first.”

MGP is based in San Francisco, with an office in Seattle. It is working with GGLO to create a four-phase plan for Shoreline Place. About 1,300 residential units are planned; some could be condominiums. Affordable apartments, incentivized by the city's 12-year property tax exemption program, are apparently not being contemplated.

The housing and about 90,000 square feet of retail, commercial and restaurant space will be arranged around a new public park, dubbed Town Green.

Phase I could start next year, subject to permits and approvals. It would be purely commercial, with about 17,000 square feet of shops and restaurants in two low-rise buildings. Tenants could include a brew pub and ice cream shop. The new structures would be built on parking lots, with no demolition required, so this would be straightforward and easy to permit, according to the city.

Phase II would be purely residential, on the west side of the site, with two or three mid-rise buildings and about 500 units. (The city caps building heights to 70 feet in the commercial zone.)

Phase III would demolish the Sears and use that space for mid-rise residential and mixed-use.

Phase IV would be more housing and mixed-use space extending eastward to Westminster Way North.

MGP estimates the whole process would take a decade.

MGP is one of a half-dozen property owners at Shoreline Place, where few other redevelopment plans have been floated. “Other folks are probably in a wait-and-see approach,” says Daum. “We're in frequent communication with the other property owners.”

For now, the mall's tenants include Central Market, two banks and miscellaneous retail. It's also home to the popular Shoreline Farmers Market on Saturdays, which MGP says will relocate to its Town Green.

The Sears outlet store is still open; and MGP is marketing the vacant-big box Sears to short-term tenants.

The state of Washington has an old office building on the west side of Shoreline Place that is used mainly by WSDOT. There are no plans to swap or sell it. In fact, WSDOT recently expanded the building.

But before any of MGP's project breaks ground, the first major new project in years will be built just east across the street: Trammell Crow Residential's 330-unit six-story Alexan Shoreline at 15500 Westminster. It will be on the site where the now-jailed developer Lobsang Dargey once proposed to build Potala Shoreline, also designed by Caron Architecture. TCR inherited that master use permit and plans to buy the property out of receivership.

The city issued a construction permit for the project last week. Environmental clean-up is required for the area where a dry cleaner once operated on the two-acre property. (Prior tenants also included Pizza Hut and a Denny's.)

City officials expect construction to begin next spring. No general contractor has been announced, and TCR declined to share any project details.

Rendering by Caron Architecture [enlarge]
Just across the street from MGP’s site, Trammell Crow Residential is planning the 330-unit, six-story Alexan Shoreline. The city issued a construction permit last week.

Alexan Shoreline will also have 302 parking stalls (structured and below-grade) and 198 bike stalls. About 66 of the 330 units will be affordable, under the city's 12-year tax exemption program. The two-acre property is also bounded by the Interurban Trail and Aurora to the east, and by North 155th Street to the south.

Around the same time that project opens, and while MGP's is presumably underway, the city will be finishing $140 million in street, pedestrian and bike improvements to the area around 155th and Westminster. That work should begin next spring and be completed about a year later.

Privately held MGP is better known as a retail developer and manager, but it has experience redeveloping old malls — and Sears stores. One example is Capitola Mall, east of Santa Cruz, where the Sears will close and the mall will be renovated with new retail — and possibly a hotel and housing.

And at the Village at San Antonio Center, in Silicon Valley, another Sears-anchored mall gained 330 housing units, offices, a hotel, new retail and a multiplex. (The Sears spinoff REIT Seritage Growth Properties sold all or a majority interest in those two properties to MGP.)

“They've done this a few times,” says Daum. “It's a significant vote of confidence from the private sector. We're thrilled about it. It's the urban village that we've always had in mind.”

Shoreline Place may not be quite so grand in scale as Simon Property Group's planned makeover of Northgate Mall — which has its own light rail station. But Shoreline Place has the RapidRide E Line on Aurora, which stops at 155th.

And MGP is not new to this area. Of its 15 million square feet on the West Coast, it has 4.2 million in the Pacific Northwest. Local properties also include Lynnwood Square, Town Center at Lake Forest Park, Shoreline Marketplace, Ballinger Village Shopping Center and Alderwood Plaza.

Got a tip? Contact DJC real estate editor Brian Miller at brian.miller@djc.com or call him at (206) 219-6517.

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