New Rainier Square Tower Could Re-invigorate Downtown

Seattle-based Wright Runstad & Co. has applied for a master use permit to redevelop a key property in the heart of downtown Seattle, seeking city approval for an unusual curved tower that will one day be the second tallest building in the city.

Starting late next year, Wright Runstad plans to demolish the Rainier Square shopping mall and start construction of the 58-story skyscraper and a 12-story hotel.

The project will bring new energy to the downtown core, which has been overshadowed lately by the rapid redevelopment of South Lake Union and the Denny Triangle to the north.

The property is across the street from the historic Fairmont Olympic Hotel on University St. The hotel, Rainier Square and the adjacent Rainier Tower are all part of the Metropolitan Tract, a 10.7-acre swath of land in downtown Seattle owned by the University of Washington.

Plans for the 1.15 million square-foot Rainier Square project include 30,000 square feet of shops and restaurants, a 12-story luxury hotel with approximately 150 rooms and a mixed-use office tower with 790,000 square feet of office space on the lower floors and 180 apartments on the top floors.

Wright Runstad will need a financial partner for the $600 million dollar project. According to Wright Runstad president Greg Johnson, there is already substantial interest among institutional investors in the project even though the University of Washington will continue to own the land on which it sits and collect rents through an 80-year ground lease agreement with the developer.

The project took root in the summer of 2013 when the University of Washington requested proposals from developers to overhaul Rainier Square. Submissions were winnowed to a final four that included two local developers — Wright Runstad and Pine Street Group and two international firms, Houston-based Hines and Tishman Speyer of New York.

Johnson said the companys unusual design gave its proposal the edge over competitors.

We have a very compelling design on the tower, Johnson said. Theres this dramatic curve on the eastern face that sparked the imagination of the University. They felt it really complemented and enhanced Rainier Tower, which will remain on the block and Rainier Square, hopefully, will provide an iconic image commensurate with that location.

Rainier Tower is the building that resembles an immense stubby pencil balanced on its tip atop a retail podium that includes a Louis Vuitton store.

The proposed Rainier Square buildings sharp ski jump curve will help preserve the waterfront views from Rainier Tower.

An added benefit: The office portion of the sloping high-rise tower is attracting interest from a range of prospective tenants, thanks to its ability to offer a variety of floor plans.

Its a fortunate consequence of putting the curve there, Johnson said.

Between the third and tenth stories, the proposed towers floors are very large — 34,000 square feet in size. Big floors are attractive to high tech companies, financial services firms and others that like an efficient, wide-open workspace that fosters collaboration, Johnson said.

Meanwhile, the floors between the tenth and 37th floors are each a different size, squeezing all the way down to 15,000 square feet in size. That flexibility will enable smaller companies to occupy an entire floor or adjacent floors without having to share space with another business, Johnson said.

The retail portion of Rainier Square will include relatively small shops and at least one top-notch restaurant from a local chef, Johnson said. He also plans to have a market hall in the interior of the block, along the lines of the Melrose Market on Seattles Capitol Hill. The Rainier Square market hall will offer fresh local prepared foods that office workers and residents can pick up on their way home.

The project will be delivered in phases with office and retail tenants moving into the lower portion of the office tower in late 2017, with upper floors ready for occupancy in 2018 and the remaining apartments in 2019. The hotel will break ground in early 2016 for completion in 2018.

In preparation for the redevelopment, Wright Runstad took over management of Rainier Square and Rainier Tower on Halloween Eve. Thats when UWs 60-year ground lease of the Metropolitan Tract to Seattle-based Unico Properties expired. Unico will continue to manage the remainder of the tract under its new agreement with UW.

Because Wright Runstads project is subject to a ground lease, its easier to offer the residential units as apartments rather than as condominiums, Johnson said. He believes there is a market for luxury rentals among people who could afford to buy anywhere but who chose to rent instead.

Apartments rents have been rising for the past 18 months and are in the range Wright Runstad needs to achieve to meet the terms of the lease, Johnson said. Net office rents meanwhile need to be in the high $30 per-square-foot range.

Were starting to see those rents be achieved in some frankly less significant buildings that do not offer the same views. So we are pretty encouraged from that standpoint, Johnson said.

He expects a redeveloped Rainer Square will be well able to compete against South Lake Union for office and residential tenants.

Johnson points to the projects proximity to the Westlake Center transit hub, the Seattle Art Museum, performing arts groups and downtown Seattles retail core. Additionally, the Seattle waterfront will be another powerful draw, once it is redeveloped, Johnson said.

Interest in Wright Runstads project among prospective office tenants has been such that the market is saying, Get ready to start construction as quickly as you can, Johnson said.