Wright Runstad to break ground on $2.3 billion Bellevue project

Update

Just got off the phone with developer Greg Johnson for an update on Wright Runstads plans for the Spring District, a proposed new 36-acre neighborhood a half-mile east of downtown Bellevue.

In drawing up plans for the $2.3 billion office and residential project, the firm spent time talking to Google about the kind of offices tech companies need to attract top talent. Employers such as Google and Microsoft can spend tens of thousands of dollars recruiting each worker. Theyve found environmentally friendly, dog friendly offices with bike racks and showers can help give them a competitive edge.

Additionally, tech employers like wide-open spaces so their creative workers can share ideas spontaneously.

One Google executive even joked that his dream office would be a million square feet of space on a single floor, Johnson said.

While thats not feasible, Spring District office buildings will be able to offer large 30,000-square-foot floors with extra-large windows. And that may give Spring District office buildings an edge over narrower downtown high-rise buildings in attracting tech companies, Johnson said.

Another advantage the new neighborhood will have is a shorter commute on 520 compared to the more congested connections in downtown Bellevue, Johnson said. When the light rail station is completed, the commute time to downtown Bellevue will be 4 minutes and it will take seven minutes to get to Microsofts Redmond campus from the Spring District, he said.

It will absolutely be faster and more reliable to get on the train at 5 p.m. than to get in your car, Johnson said.

Getting people to move into a neighborhood that is in the throes of being created will take some finesse. Wright Runstad has rolled out a new website with a virtual model of the proposed development that visitors can fly through on their computers. He also hopes to get some early destination retailers such as local restaurants and brewpubs to attract residents and workers. The game plan, with the Spring District is to create the feel of a walkable, vibrant urban neighborhood such as the Pearl District or Capital Hill, Johnson said. The project will host market days, bike rodeos and movies in the linear park that will run through the property. Taking a cue from development in South Lake Union, Johnson also will avoid having long stretches of blank walls on the Spring District office buildings.

We will be very intentional to ensure that at every point along the sidewalk, the building next to you has something going on, Johnson said. The initial office building will have an outdoor fireplace outside the lobby with a coffee shop whose patrons can settle in couches in the lobby to sip their coffee.

Seattle developer Wright Runstad & Co. and San Francisco-based partner Shorenstein Properties are set to break ground next Monday in Bellevue on the nations largest transit-oriented development. See more details here.

Seattle Business magazine will be listening in to this afternoons conference call to discuss their plans for the Spring District. Well keep you posted on whats said.

The $2.3 billion project will transform 36 acres along the north side of the Bel-Red Corridor that runs just east of downtown Bellevue to the Overlake neighborhood near Microsofts headquarters.

Wright Runstad and partner Shorenstein acquired the site in 2007, paying Safeway $68 million for its warehouse facilities.

Plans call for 5.3 million square feet of office, retail and residential development and parks. The first residents could be moving in just two years from now in 2015. Next year, Seattle-based Security Properties will start construction on a 316-unit residential complex.

When completed, the Spring District, comprising 16 city blocks, will include 3.7 million square feet of office space, 1.2 million square feet of residential space a 200,000-square-foot hotel and 158,000 square feet of retail space.

This is the beginning of a new kind of neighborhood in Bellevue, says Greg Johnson, President of Wright Runstad & Company. A neighborhood designed with walkable, pedestrian-friendly streets, urban parks, cool apartments and unique local retailers and restaurants is a big switch from the typical Eastside pattern of superblocks, national chains and car-based urban designs. Earlier this year one of the regions most successful residential developers, Security Properties, committed to develop the first 316 unit multifamily apartment project in The Spring District.

What makes Wright Runstad willing to take the plunge strong job growth in Bellevue. The city is growing at 6 percent a year and promises to absorb its share of the 135,000 new residents expected to move into the Puget Sound area within the next two years.

In the war for talent, the built environment is a competitive advantage for companies looking to grow, says Johnson. It turns out that software developers want walkable neighborhoods, transit, easy commutes, interesting amenities and sustainable designs.

Kicking the Spring District off with an apartment project is a smart way to go, according to land use expert Matthew Gardner of Gardner Economics in Seattle.

Apartment vacancies are low just 2.7 percent in the East Bellevue submarket where the Spring District is located, according to the real estate firm CBRE. Apartment vacancies are nearly that low in downtown Bellevue at approximately 3 percent in downtown Bellevue. And there are few new units coming on the market to ease that demand until 682 units are delivered starting in 2015, Gardner said.

Still, it will be years before the surrounding office and retail development in the Spring District is completed.

Youve got to set the vision, like Portland did with the Pearl District, Gardner said. Youve got to sell people on the vision.

Once the project is well underway, it will get easier to fill empty apartments, offices and shopfronts. Says Gardner, Anything that large tends to create its own vortex of demand.

Still he cautions, These things arent successful overnight. It will take time. South Lake Union was similarly transformed from a gritty industrial area into Seattle’s fastest growing neighborhood and home to one of the world’s biggest tech companies, Amazon. But that effort has taken over a decade to mature.

The Spring District will benefit from strong demand for space among tech companies. Earlier today Geekwire reported that F5 Networks will be opening a new office in Bellevue. Meanwhile, Google plans a major expansion in nearby Kirkland.

The Spring District will also benefit substantially from regional plans for a $2.8 billion light rail project that will connect Bellevue with downtown Seattle and the $4.65 billion upgrade to the 520 Bridge that runs between the two cities.

For its part, Wright Runstad plans to spend the remainder of this year demolishing the old Safeway warehouse at Northeast 12th Street and 120^th Avenue Northeast and putting in roads and utilities. Next year, Wright Runstad expects to complete a park for the project and open its marketing center. In 2015, work will begin on the second phase of the project.