Developer requests $3 million from city for Issaquah Highlands retail center

November 22, 2011

By Warren Kagarise

In order to complete a long-planned business district 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, Florida-based Regency Centers, said the highlands project needs the dollars to complete roadwork and other infrastructure.

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

City officials said the retail complex could generate about $1 million in sales tax revenue each year.

Craig Ramey, senior vice president and senior market officer for Regency, called on City Council members Nov. 16 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 — for police and fire services, community development and planning, parks and recreation, and municipal government — amounts to $32 million.

Officials did not set a timeline for discussing Regency’s request further, although the next budget must be approved by the end of December.

Regency intends to use the public money 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 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 past 18 months, council members loosened rules for parking and signage, and set aside groundwater contamination concerns to allow a gas station.

How much Port Blakely could contribute to the project remains undefined, although the company could shift dollars from other commitments to the city, such as a planned bus route expansion to the highlands.

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 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 reached out to other possible tenants for the highlands complex.

The proposal to add 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.

Councilman Tola Marts compared the proposal to add almost 1,600 parking stalls to the available parking stalls at Kent Station and The Landing in Renton. Both complexes include a smaller ratio of parking stalls to commercial space than the highlands proposal.

“It’s about twice what our community has said we want to do in the valley to incent commercial development, just so you know where the city is at right now,” he 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 asked. “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 after the meeting.

Warren Kagarise: 392-6434, ext. 234, or Comment at

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