Developer requests city funding to complete Issaquah Highlands retail center

November 17, 2011

By Warren Kagarise

NEW — 9 p.m. Nov. 17, 2011

In order to build more stores in the Issaquah Highlands — and transform 14 acres into a cinema, shops, restaurants and more than 1,700 parking stalls — the developer behind the project said about $3 million in city funds is needed.

The developer, Regency Centers, said the highlands project needs the dollars to complete roadwork and other infrastructure.

Florida-based Regency Centers and highlands developer Port Blakely Communities announced a deal in July to sell the land for a retail center, but before Regency Centers completes the deal, company planners asked city leaders to commit public dollars to the project.

Port Blakely is also expected to contribute about $1 million to the project after shifting dollars from other commitments, such as a planned bus route expansion to the highlands.

Craig Ramey, senior vice president and senior market officer for Regency Centers, called on City Council members Wednesday to consider city funds for the project. If approved, construction could start in the spring.

The council listened to the request amid deliberations for a lean 2012 municipal budget. The budget’s general fund — dollars for police and fire services, community development and planning, parks and recreation, and municipal government — amounts to $32 million.

Regency Centers intends to use the public dollars to reconfigure streets and traffic signals, and create a public plaza near a proposed cinema. The initial plan calls for changing Northeast Park Drive and Northeast Federal Drive from one-way streets to handle traffic in both directions.

Regency Centers also proposed realigning curved Northeast Federal Drive into the street grid.

The request for public funding is a departure from other recent efforts to bolster commercial development in the highlands. In the last 18 months, council members loosened rules for parking and signage, and set aside groundwater contamination concerns to allow a gas station in the neighborhood.

Meanwhile, interest is low from prospective tenants for the proposed retail complex, as retailers remain reluctant to expand amid a difficult economy.

“We don’t have tenants for all of this space right now. We have some,” Ramey said. “We have some demand, but it’s a challenge. It’s a very, very tough economic environment right now.”

The uncertainties led council members to ask for more details before public funding can be considered for the project.

“We need to begin to nail down the specifics of what we’re talking about,” Councilman Fred Butler said. “If I’m going to be in a position to take a position on what’s being proposed, then I need to understand that and we need to have a public conversation about that.”

Jim Reinhardsen, managing director at Heartland, a Seattle consultant hired by Port Blakely to jumpstart commercial construction in the highlands, urged the council to act.

“It is a time to complete this community in a way that is the highest-possible quality with the best-possible talent,” he said. “If you don’t move forward and do something like that, then there’s an opportunity lost and it’s a cycle before something happens there.”

Council questions parking plan

The council budget meeting also included a public debut for the proposal — a retail center dubbed Grand Ridge Plaza in early promotional materials.

Regency Centers proposed a 280,000-square-foot complex spread across 14 acres between Ninth Avenue Northeast and 10th Avenue Northeast.

The announced tenants include Safeway and a Regal Cinemas multiplex. Ramey said Regency Centers reached out to other possible tenants for the highlands complex.

The proposal to include almost 1,600 parking stalls for shoppers prompted questions from council members. Overall, the proposal includes 1,706 parking stalls. The total includes 109 parking stalls at the existing retail-and-office building along Northeast Park Drive.

“I look at the map and it kind of reminds me of the Target shopping center, Pickering Place and places that we’re trying to redevelop as part of our 30-year vision,” Councilman Joshua Schaer said.

(The long-term plan for the business district along Interstate 90 recommends redeveloping strip malls into mixed-use structures in the decades ahead.)

“Are you really telling us that people are going to park at Unknown Retailer 1 and 2, and walk to the movies or vice versa, and that this is going to become like a U-Village, walkable place?” Schaer continued. “I mean, is that really the vision that you’re suggesting? Or is it, we just want to get these retailers in, you can drive right up to them, buy your stuff and go?”

Ramey said the complex is designed to accommodate the needs of different consumers.

“You have to create a pedestrian-friendly environment where you’re inviting people to come and stay and walk. So, you’re saying, ‘Look, here’s a plaza. Come, stay, go to a movie, eat at the restaurant, walk across the street, shop someplace else,’” he said. “On the other hand, if you’re coming home from work, and you want to pull in to the restaurant to get some food for your family, you want to be able to pull in, get it and go.”

The site plan — from Seattle-based Fuller Sears Architects — includes a public plaza near the multiplex. Plans call for the plaza to encompass about 10,000 square feet and act as a centerpiece for shoppers.

“Rather than a plaza that’s out kind of by itself, that has to draw people in, this will have people walking through that at all times,” architect Steve Johnson said.

The firm also designed the open-air Lakeland Town Center in Auburn and a retail complex in downtown Woodinville.

The latest plan differs from the residences and shops once proposed for the highlands site. The High Streets, a proposed retail complex billed as a “lifestyle center,” sputtered amid the recession.

“I think what we’re being told is that the market in the current recession is leading to maybe a different build out of this area today than what was initially envisioned in the development agreement,” Keith Niven, city Major Development Review Team program manager, said a day after the meeting.

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4 Responses to “Developer requests city funding to complete Issaquah Highlands retail center”

  1. Anonymous on November 18th, 2011 10:41 am

    We caved to Port Blakely and did not hold them to what they initially committed to do and now we are asked to help Regency Centers pay for their development project. Just another exampe of threatening the city with no development of this space or a delay in developing this space in order to extract addition taxpayer suport for their profit making enterprise. I say if Port Blakely wants to close the deal they pitch in the extra 3 million.

    I also don’t know why we would want to pay $3 million to reconfigure roads and traffic signals that are perfectly fine and part of the original master plan of the Highlands. If Regency can’t develop the site within the originally configured infrastructure then I suggest they look into a new design or we admit that the original road design for the commercial area was flawed just as it was for the residential area.

  2. Anonymous on November 18th, 2011 1:14 pm

    I am figuring this is what we get when the City counsel gets too involved in development. My guess is the counsel has its fingerprints all over the present configuration and plans for the Highlands. Unfortunately the counsel knows nothing about the market, or what is possible, so it is not surprising that we find ourselves in this hole with the developer asking for funds.

    Still, I come to the same conclusion as the last comment. Just say no. Let the market figure out what it can do without City money…. The City should figure out how to get out of the way, and let the market work.

  3. Connie Marsh on November 19th, 2011 8:34 am

    Totally agree with the prior two comments. It freaks me out that this conversation with the Council was had during a budget session with no public meeting minutes! We got some people to the meeting to cast some eyeballs on it, when it appeared on the agenda the day before the meeting. I did take notes and put it on our website forum so that the public read see the discussion from my point of view. Here is the link to those:

  4. Shelly Hawkins on November 20th, 2011 6:44 pm

    According to The Issaquah Press (“City wants your comments on Federal Drive plan,” April 22, 2009), “The existing configuration of Federal and Park Drives was designed to accommodate a Microsoft campus in an area south of Park Drive and a retail area to the north.” If Microsoft hadn’t been part of the equation when the streets were originally configured, the streets would have been arranged in a traditional grid, which would have been preferable.

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