Updated development rules could boost chances for highlands retail

August 24, 2010

By Warren Kagarise

Long after slick sales brochures and pitches from real estate agents promised the chance to live, work and play in the Issaquah Highlands, the neighborhood may become more appealing to businesses.

Or maybe not.

Milestone development measures passed by the City Council last week loosened the rules for parking and signage in the highlands — sore spots for potential tenants.The measures also allow up to 550 additional residences in the hillside community. Highlands residents at the packed council meeting protested the decision to green-light more density.

“I’m just afraid that 10 or 15 years from now, it will all be high-density living and very little of the green spaces and the stuff that we love up there,” resident Peter Masten said.

Now, the ironic part: Residents grumbled for years about the dearth of retail options in the highlands. The developer, Port Blakely Communities, and retail consultants said more homes mean more customers for businesses.

Seattle consultant J’Amy Owens — the self-styled “diva of retail” — said the community needs more residents to appeal to retailers.

“The population has to be there to sustain it,” she said. “Whole Foods and Central Market would be there in a heartbeat if there was enough critical mass.”

Both grocers considered the highlands, but in the end decided against opening stores in the community. Plans to open a still-unidentified grocery store remain in limbo.

During a community meeting six months ago, Port Blakely executives lowered expectations for highlands retail and attributed the slowdown to the recession.

Executive Judd Kirk said he hopes the updated parking and signage rules help make the highlands more appealing to potential tenants.

“It’s hard to visualize when it’s all vacant land,” he said.

Rule rollback

Under the updated rules, developers can create “interim” parking lots in the neighborhood until 2018. The lots require less landscaping and offer builders a cheap alternative to structured parking. The city has limited the number of “interim” spaces to 725.

“That number came about based on our understanding of what was needed to get the theater to move forward,” city Major Development Review Team Program Manager Keith Niven said at the council meeting.

The “interim” spaces must be gone or transformed to meet stricter standards by 2020.

“We’re going to have a tremendous incentive to develop these lots, because one of the provisions says we can’t charge for parking,” Kirk said a week before the council decision.

Parking has been a stumbling block to building a Regal Cinema since Port Blakely and the chain announced the plan last August. In the meantime, the theater space and other parcels zoned for retail sit undeveloped.

The rule change also loosened some sign restrictions for highlands businesses. The updated agreement allows for larger letters, sign kiosks and additional signs for businesses facing multiple streets, plazas or other public spaces.

Consultant Dick Outcalt at Outcalt & Johnson: Retail Strategists in Seattle said the anemic economy remains a top problem for highlands retail development.

“Now, if the economy hadn’t gotten so soft almost two years ago, there might be a critical mass of retailers there,” he said.

Port Blakely envisioned the retail core, or town center, as a retail destination similar to University Village in Seattle or Redmond Town Center — a concept so far missing from Issaquah. But the recession forced the developer to focus on bringing in essentials, like a grocer and a gas station.

“Destination retailing by definition has to draw people from elsewhere,” Outcalt said. “There’s not much of that on that plateau.”

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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