Monday, May 22, 2006

Balancing payoff of monorail land sell-off
As developers move ahead, neighbors lament lost chances

On a busy Crown Hill corner once envisioned as a monorail stop, some neighbors would love to see cute shops, street trees and apartments or condos.

The stretch of 15th Avenue Northwest dotted with driveways, anemic trees and dead tulips could use an influx of residents to help humanize this automobile corridor, some believe.

But developers spending $1.7 million to buy two parcels from the doomed monorail project have another vision. They're considering a renovated retail development with additional parking and possibly a drive-through, according to a sale agreement.

Those disconnects have caused some to bemoan missed opportunities in one of the broadest sell-offs of public land in recent Seattle history, including prominent properties in the urban heart of several neighborhoods.

The nearly defunct Seattle Monorail Project is wrapping up sales of 33 properties, since voters decided in November to kill the expensive, 13.6-mile project.

Though the speedy sale is great for car-tab taxpayers, some frustration lingers that more properties won't be used for public purposes, such as open space, affordable housing or community parking lots.

Instead of monorail stations, some neighborhoods will get apartment or condo developments. Other buyers plan to maintain the status quo. In only one case will a surplus monorail property become a park.

Those sales are allowing the monorail project to stop collecting taxes after June. By law, the agency had to get the best return on its surplus land by selling to the highest bidder.

"We were really disappointed because the high bid doesn't necessarily translate into public interest," said Suzanne Swadener, who belongs to a coalition of residents and businesses aiming to invigorate 15th Avenue Northwest.

"It really was a one-time opportunity to take a big look at what's happening in the neighborhood, and we lost that opportunity by virtue of their desire to be expedient."

Jonathan Buchter, chief operating officer for the monorail project, said the agency offered its properties to public agencies before putting them on the open market.

The city of Seattle wasn't interested, he said, though the parks department later reached a deal to split the Morgan Junction site in West Seattle with investors looking to create a home for the popular Beveridge Place Pub.

"These are properties that governments said they didn't want," Buchter said.

The monorail agency received bids from 351 applicants -- proof that the fast turnaround time didn't deter would-be buyers or curtail competition, he said.

Successful bidders range from deep-pocketed developers to immigrant small-business owners. Of the four original property owners who tried to reclaim land taken by eminent domain, three were able to win their parcels back, albeit at higher prices.

With all but one parcel sold or under contract, the monorail project now stands to receive $68 million, $11 million more than it paid for the parcels two years ago.

Sharon Lee, executive director of the Low Income Housing Institute, said she would have loved to build affordable housing on a monorail site. The short time frame and superheated bidding environment made that impossible, she said.

The city is considering creating a land acquisition fund allowing non-profits to more effectively compete with private developers on city land prices. But housing officials reluctant to shift money from other priorities still are working on the concept.

"It's unfortunate that there was so little planning and foresight given to this when we have such an incredible housing crisis," Lee said. "Those were important sites."

But Rick Osterhout, the senior vice president for GVA Kidder Matthews who brokered the monorail sales, said the agency and its board bent over backward to balance requirements for a fair process with the best community outcomes.

"When the dust settles on this thing, I know I'm going to feel very pleased because we did way better than we thought," he said. "The people who really wanted their properties back got them, and we were able to cut a deal in Morgan Junction with the pub-parks deal. So there's a lot of good things out of this."

Here's a look at what may be coming to different parts of the city instead of a monorail line:

Ballard and Crown Hill

The developer buying most of the monorail properties in Ballard and Crown Hill said he's interested in hearing the community's thoughts about what they'd like to see there.

"You want this thing to be a home run for everyone," said Mike McKernan of Real Property Investors, who is buying the two Crown Hill sites and four parcels in Ballard, including the distinctive Denny's restaurant.

"But when you step up to pay such an inflated price as we did, you've got to get a retailer who can afford to pay the rent, and a retailer that's going to fit in the community."

His company, along with partner Benaroya Co., is talking to condominium and apartment developers about a major mixed-use project at the Denny's corner of 15th Avenue Northwest and Northwest Market Street, where eight-story buildings are allowed.

Many in Ballard have a soft spot for the 24-hour Denny's diner, with its blue-collar breakfasts and swoopy architecture resembling a Dutch lace cap. It was already destined for the wrecking ball under the monorail plan.

"If it gets torn down and converted to a large condo building, it would be a shame," said Andy MacDonald, who lives in Crown Hill. "I think of it as such a Ballard landmark, even though it's probably only 30 years old."

Elsewhere along the defunct line, he thinks neighbors will be happy to see empty monorail properties -- papered over with theater playbills and art posters -- put to productive use again.

But it would be unfortunate if development in Crown Hill doesn't make the corridor more pedestrian-friendly, and simply becomes a magnet for more cars in an already congested area, he said.

Interbay, downtown and Sodo

Buyers in Interbay and Sodo are holding onto their properties for now, waiting to see how those industrial areas evolve.

Ariel Development, which renovated the Rainier Brewery into artist lofts and is jointly developing the hotel next to Safeco Field, is buying properties in both neighborhoods with different partners.

They submitted a winning bid for the biggest monorail site -- the 7.6-acre former National Guard Armory between Queen Anne and Magnolia.

Such an enormous parcel between two of the nicest neighborhoods in Seattle invites a lot of dreaming, Ariel general partner Herzel Hazan said. But they plan to spend the next few years leasing existing buildings and deciding what the best use should be, he said.

Larger downtown sites attracted big players such as New York real estate investment banking firm Multi Capital Group LLC, which is still weighing options for parcels near the corner of Fifth Avenue and Stewart Street.

Investors working with Seattle-based Triad Development are contemplating condo, retail and possibly hotel development on two Broad Street sites.

That group did not submit a bid for the adjacent Caffe Appassionato site, said representative Brett Allen. They didn't want to compete with the coffee shop's original owners, who successfully bid on the tiny property condemned against their will.

"We have been the victim of eminent domain in the past and we weren't about to wade into the middle of that," Allen said. "We realized we could put together a really nice project without weighing in."

West Seattle's Alaska Junction

The company that catalyzed high-rise downtown living with Harbor Steps apartments has shifted its sights to close-in neighborhoods, snapping up a parking lot in the heart of West Seattle's Alaska Junction.

It fits Harbor Properties' criteria perfectly: good public transportation, a walkable business district and a neighborhood "with a soul," said chief development officer Denny Onslow.

Though specifics for the roughly 100-unit development the company plans to build there are up on the air, it's clear the building will supplant the parking lot behind Petco, which will be forced to move once those 40 spaces are gone, store officials say.

It's also functioned as a free community lot where anyone dropping in for dance lessons, beers or kids' art classes could usually poach a spot.

"In my opinion it's going to be devastating to lose that as parking," said Michael Hoffman, owner of Liberty Bell Printing. "We were trying to get it back for our merchants association ... but there was no way we could compete."

Harbor Properties, which bid $4.5 million, has already begun talking to the community and is well aware of the parking concerns, said development director Steve Orser.

The company is willing to work on those, he said. Junction businesses, though, should also benefit from an influx of new residents looking to walk to restaurants, shopping or yoga classes.

"Sometimes our parking is lower than what you might expect because we offer alternative transportation and we encourage that as part of our sustainable and green development," he said. "But we're going to do our best to be in touch with the community and see if there aren't solutions."

West Seattle's Morgan Junction

Just down the road in Morgan Junction, the city, community and monorail project found a solution that nearly everyone loves.

But it didn't happen effortlessly.

Gary Sink, owner of the Beveridge Place Pub, learned in January that his building's owners plan to develop their property in the next few years.

That would leave the community watering hole -- with its long beer list, maple bar, comfy couches, fresh flowers and a wall full of dog pictures -- without a home.

A small group of bar regulars and friends who go razor clamming each year decided to pool their resources and bid on a 17,000-square-foot monorail property next door.

"It wasn't quite an open save-the-pub campaign but the people who did invest did so with the knowledge that if we didn't get the property we'd be scrambling," Sink said.

At the same time, the city's parks department eventually decided the parcels would work for a Morgan Junction neighborhood park, which already had funding committed.

But because of time-consuming requirements for buying property, it wasn't able to make the most attractive offer, said Donald Harris, Seattle Parks and Recreation's acquisition manager. "We had no authority to waive our normal processes because it's not my checkbook," he said.

Through the connections that exist in a neighborhood where people are born and never leave -- and extra effort on the monorail's behalf -- a $1.3 million deal was struck to split the California Avenue property for both the pub and a city park.

"That's West Seattle," said Jim Leptich, one of the investors who lives in the Admiral area. "This was for a good cause -- keeping the pub in the neighborhood -- and there's an opportunity to profit from it down the road."

More headlines and info from Ballard/Broadview/Blue Ridge, Belltown, Downtown, Magnolia, Queen Anne, Sodo.

P-I reporter Jennifer Langston can be reached at 206-448-8130 or jenniferlangston@seattlepi.com.