[Commercial Marketplace]
March 12, 1998

Developers set their sights on Denny Triangle

Journal Staff Reporter

Mention the Denny Triangle and a lot of people say, "What's that?"

But the almost-forgotten Seattle neighborhood just north of downtown may soon become better known as development marches its way.

Bounded on the east by I-5, on the west by Sixth Avenue, on the southeast by Pike Street and on the north by Denny Way, the Denny Triangle can be considered either a northern extension of downtown or a southern extension of the South Lake Union neighborhood.

In either case, its future very likely will be determined by forces now at work in both neighboring areas.

Those forces are, first of all, the city's booming economy and its strong demand for new office, housing, research and retail space. Second, the city has determined that the underdeveloped Denny Triangle -- if developed properly -- has the potential for 25,000 new jobs and 3,500 new housing units. And it has no less than 60 percent of the developable land downtown, mostly in the form of surface parking lots.

Denny regrade

Land costs in the area are lower than downtown and full-block sites still can be found.
Photo by Jon Savelle

But the days when market forces alone determined the shape of urban development have long gone. Now the city has a Comprehensive Plan, mandated by the state Growth Management Act, and under it neighborhoods must determine how they are to meet the city's goals for creation of affordable housing, employment and open space.

The Denny Triangle is no exception. As one of the Comp Plan's "urban villages" within the downtown "urban center," its future is being charted by a neighborhood planning group made up of residents, business owners, land owners and developers.

John Mills, a property manager with Wright Runstad & Co., and Liz Krizanich, a property manager with Clise Properties, Inc., jointly serve as the chairs of the Denny Triangle Neighborhood Planning Committee. A year ago the group finished the first phase of its work, which was to bring stakeholders together and identify the needs of the neighborhood.

Now the group is well into Phase Two, in which it will try to determine just how the neighborhood should develop, and how it can meet the city's goals for housing and jobs.

"The question is, what kind of jobs, and what kind of housing units," Mills said. "One of the things we're really struggling with is the goals the city has set."

The goals are somewhat contradictory. Housing, for example, is envisioned as being affordable. That means not subsidized units, and not the high-end condos found in the Denny Regrade. But how to create such housing, while at the same time creating the commercial development that brings jobs, is a puzzle without an obvious solution.

At the moment the neighborhood has about 1,000 residents in mostly subsidized housing.

Dan Miller, a resident of the Denny Triangle who serves on the Housing Committee of the neighborhood planning group, said residents and developers are working together to solve the problem.

"It does seem to be a pretty serious challenge," Miller said. "The perception is that the lower end (of the housing market) is taken care of ... by various programs and agencies, and the upper end is taken care of by the market. It's a real challenge to create housing that would be affordable to people who make $7 to $10 per hour."

Among the options under discussion is a change in zoning to allow developers to build higher structures. Another idea is to give them height bonuses for affordable housing, much the way bonuses are awarded for creating low-income units or amenities.

But housing isn't the only challenge. Pat Strosahl, a community-planning facilitator with Community Connections who is working with the Denny Triangle group, said they are also looking at "green streets" with trees, art, benches and less voracious traffic.

Strosahl noted that the neighborhood is crisscrossed with major arterials -- used primarily by persons going to and from downtown -- and they are a barrier to creation of appealing residential areas. But the Denny Triangle has the advantage of proximity to I-5, plus the Convention Place bus station in its midst. That station's bus tarmac, which will be surplus when the RTA's light rail trains start rolling, is seen as a prime site for redevelopment.

That isn't coming for a few years, however. Nor is there any great rush on the part of landowners to convert their parking lots to higher uses. Land banking is the order of the day.

Once the planning groups develop a final blueprint for the neighborhood, which they are expected to accomplish by April, and once market forces make new projects start to pencil, change could be rapid.

One reason is that many of the Denny Triangle's major landowners are also developers. Their names will sound familiar: the Vance family and Vance Corp.; the Benaroyas; Clise Properties; U S West; Paul Allen and the R.C. Hedreen Co.

Jon Runstad, a principal in Wright Rundstad & Co., said the economics of develoment in the Denny Triangle are slightly more favorable than they are downtown. Land costs are somewhat lower, and full-block sites can be found. On the other hand, Denny Triangle sites lack the proximity to other businesses that downtown locations can offer.

"The advantage of (proximity) is, it facilitates interaction between businesses," Runstad said. "We are finding that there are good sites close to downtown. We're very excited about our site across from Bell Harbor, which is close to the market.

"The same is true north of Denny, through South Lake Union. We do property management services for Paul Allen and we've been looking at that area. It has considerable appeal for the businesses that will be driving demand going forward, (which are) anchored by technology and life sciences, or information/software or the merging of the two, such as computational biology."

Runstad believes the same kinds of businesses will drive demand south of Denny -- in the Denny Triangle. He noted that, unlike Silicon Valley or North Carolina's Research Triangle, Seattle doesn't have 7,000 acres in which to incubate such enterprises. Here, we will have to integrate research parks into the urban environment.

It's an idea that seems to be working.

"The stereotype is, they want to be in suburban office parks," Runstad said. "We are finding that the businesses who are recruiting -- which is an intensely competitive activity -- are finding that being more where the action is is an advantage."

The question is, what kind of catalyst will spark changes in the Denny Triangle. Strosahl said a big problem is that there is little cohesiveness in the neighborhood, thanks to a small population and large areas in parking. But that is also a kind of asset.

"One thing that's different about this community is, the plan is really going to be a plan in the sense that there's no real pattern of development," he said. "You're not stepping on a lot of people's toes. And the people who want to be involved are involved.

"It's been a really interesting group to work with. The area is the last accessible underdeveloped area downtown, and there's a lot of potential there. We hope to leverage that and make a new kind of downtown neighborhood."

Copyright © 1998 Seattle Daily Journal of Commerce.