Next Stop: A Greater Seattle Via Transit-oriented Development

How light rail will create new urban centers that reshape the region.

Like many of greater Seattle’s suburban commercial districts, Lynnwood’s is a tedious landscape of strip malls, parking lots and squat office buildings. As Gertrude Stein famously remarked about Oakland, California, there’s no there there.

Lynnwood may soon get a “there” with the arrival of a Sound Transit light-rail station in 2023. Lynnwood has zoned for high density a 250-acre area called City Center in the vicinity of the station and is taking steps to create a lively downtown. Construction has started on a $280 million project that includes 650 apartments and a 150-room Hilton Garden Inn. The location, which encompasses the Lynnwood Convention Center and the Lynnwood Transit Center, will get new pedestrian-friendly amenities like wider, tree-lined sidewalks, new parks, shorter blocks, bicycle connectivity, and a careful mix of national and local retailers, cultural activities and entertainment. 

City Center is one of more than a dozen downtowns popping up in the vicinity of existing or planned light-rail stations that could dramatically transform the region’s landscape. Planners hope a network of these new urban centers will absorb most of the one million new residents the region is expected to welcome by 2040 — a population increase of 25 percent.

At the heart of the transformation lies Link, the Sound Transit light-rail system, which, after some rough starts, is about to emerge as the backbone of greater Seattle’s transportation system. Today, the system has 15 light-rail stations between Sea-Tac Airport and the University of Washington. Their impact is limited because the original line, linking downtown Seattle with the airport, is relatively short  and traverses sparsely populated areas such as Tukwila and Rainier Valley.

The rollout of Link’s $9.5 billion Phase 2, which began with the opening of new stations last month on Capitol Hill and at the UW, will substantially expand that network — and change everything.

When Phase 2 is completed in 2023, Link will have 50 miles of track and 34 stations. From Seattle, it will run north to Lynnwood, south to Angle

Lake (a mile south of Sea-Tac Airport) and east through Bellevue to Overlake Village at Microsoft’s doorstep in Redmond. If Sound Transit’s $15 billion Phase 3 plan is approved by voters in the fall, Link would eventually grow to 100 miles of track, reaching as far north as Everett, as far south as Tacoma and as far east as downtown Redmond, tying together a network of some 60 stations and offering the first widespread commuting option for the region that doesn’t depend on increasingly clogged roads.

For Link to do its job, a large chunk of that commuting population must live close to Link stations. That’s why urban planners want suburban towns to create within a half-mile radius of a Link station — roughly a 10-minute walk — mini-downtowns that have their own apartments, restaurants, bars and entertainment venues. They hope these city centers, some with projected populations of up to 50,000, will become magnets drawing development that right now has been concentrated in downtown Seattle and Bellevue.

“Our region really struggles to find places to grow,” says Kevin Wallace, president of Wallace Properties in Bellevue and a member of the Bellevue City Council. “When the light-rail stations open up, they provide a place to grow new businesses, jobs and residences.”

One well-respected Seattle developer estimates each station has the potential to attract at least $500 million worth of development. If all 60 proposed stations are eventually built, that means a minimum of $30 billion in new construction. In addition to Lynnwood, major transit-oriented development projects have been launched or are planned for Capitol Hill, University District/Brooklyn, Northgate, Shoreline, Bellevue, Overlake Village and Angle Lake. 

Seattle Mayor Ed Murray predicts the creation of light-rail stations will provide “new energy for business and residential development” in neighborhoods throughout the region.

Last year, 13 cities and three counties signed a compact to use new zoning regulations to promote more employment and residential growth near transit lines. Seattle planners, who are now drafting Seattle 2035, the city’s comprehensive plan for the next 20 years, want to see growth focused at Link stations in areas like Rainier Valley, the University District and Northgate. Such pedestrian-friendly urban cores would have a better chance of attracting cafés, coffee shops and other businesses, as well as young people who want such amenities in their neighborhoods.

Seattle lawyer John Hempelmann, chairman of the Urban Land Institute’s Transit-Oriented Development Council, estimates that 60 percent of the region’s population growth during the next 25 years will occur in areas served by high-capacity transit. 

The prospect of a new station opening up in Redmond’s Overlake Village, right next to the Microsoft campus and just 10 minutes from downtown Bellevue (and 34 minutes from downtown Seattle), was instrumental in the development of a 170-acre master plan that will accommodate up to 40,000 people when completed.

The first stage is Capstone Partners’ $900 million Esterra Park project, which will include 1,400 homes, 1.2 million square feet of office space, plenty of retail and a 250-room hotel and conference center surrounding a new 2.7-acre park. Without the up-zone that accompanied the master plan, the project would have been limited to roughly half the size and likely wouldn’t have happened, says Capstone principal Mike Hubbard.

Bart Phillips, CEO of OneRedmond, a local civic group, is so enthusiastic about the prospect of new rail stations that help reduce automobile traffic that he’s asked Sound Transit to step up the pace so it might extend light rail from Overlake Village into Redmond’s downtown core before the 2030 date currently planned. 

Still, not everyone is excited by the potential for development. Residents in cities like Shoreline, just north of Seattle, have objected to the idea of having larger buildings go up in their neighborhoods, and say they will fight new development. And as much as urban planners would like to see dense populations concentrated around light-rail stations, there are limits to what they can do.

“The market conditions have to be right,” says Josh Brown, executive director of the Puget Sound Regional Council, whose Vision 2040 lays out a plan for where and how the region will absorb population growth. While transit-oriented developments in Bellevue and Overlake Village might be successful, areas farther away, such as Lynnwood and Federal Way, could have a tougher time attracting investment. For example, while construction costs are just as high outside Seattle’s city limits, suburban areas command far lower rents than in the city. 

Another obstacle, says developer Wallace, is Seattle’s new linkage fee, which will soon require office and apartment developers to pay between $5 and $17 per square foot into an affordable-housing fund in exchange for building bigger projects. Whether that fee will cut profits too sharply for some projects to pencil out remains to be seen. “We currently are in the mode of trying to push through projects we have in our pipeline,” says Wallace, “then waiting and seeing how things turn out.” 

Too, high-tech companies, which represent much of the region’s growth, have shown a stubborn preference for locating in the more lively sectors of Bellevue and Seattle’s downtown areas. Wallace argues that as millennials grow older and start having children, they will move farther from downtown cores in search of affordable homes that are close to good schools and light-rail lines.

The cost of living farther from downtown will also decline as the light-rail system improves. Urban centers develop their energy from the ease with which people can meet and exchange ideas. While that currently happens most easily in downtown Seattle, this situation could change. Lori Mason Curran, real estate investment strategy director for Vulcan Inc., believes Link’s ability to connect urban centers will make it easier to foster innovation across broader stretches of greater Seattle. “People and businesses will collaborate more easily because they can get to each other more easily,” says Mason Curran.

Neighborhoods close to stations opening up under Sound Transit’s Phase 2 project are already on the move. The city of Seattle plans to channel growth to neighborhoods around its light-rail stations according to early drafts of its comprehensive plan developed to help the city comply with the region’s restrictive Growth Management Act. Capitol Hill and the Roosevelt neighborhood in the University District are going through “tremendous growth in anticipation of the light rail station as is Columbia City,” says Steven Shain, transit-oriented development manager for Seattle’s Department of Planning and Development. 

The University of Washington is working with the city and local developers to bring new residents and businesses to the U District’s struggling main thoroughfare, University Way, better known as The Ave.

“I think the U District transit station could be transformative,” says Maria Royer, the principal at Seattle-based Real Retail. “There’s a significant amount of undesirable activity in the U District today. More density, more bodies could take care of that and create more desirable activity.”

Such development could upgrade the neighborhood and create a stronger tax base to help pay for safer, better-lit streets with wider sidewalks and more of a police presence, says Don Schulze, owner of Shultzy’s Sausage restaurant and president of the University District Parking Association. The parking association has four lots that are potential development sites and is asking the city for zoning changes to allow taller buildings in the neighborhood.

“We look at building community as more important than immediate financial gratification,” says Schulze, who also would like to see more employers setting up shop in the area. “I would like to see tech industry jobs to complement the U’s brainpower.” Higher-income residents would attract higher-end restaurants and entertainment, he believes.

The pending arrival of light rail in the area has already contributed to higher land prices. A standard 40-by-140-foot lot that sold for about $600,000 roughly five years ago is now selling for about $1.2 million, notes Schulze.

Vulcan Real Estate has begun a 208-unit apartment project near the U District station. Vulcan has owned the property for a long time but decided to break ground last summer because of the area’s growth and the prospect of being close to transit, says Mason Curran. The project is set to open in early 2017, the U District station in 2021.

As automobile traffic worsens, says Mason Curran, more residents will gravitate toward locations close to light-rail stations. Vulcan, which sold more than $1 billion of real estate last year, could become more involved in transit-oriented development near Link stations. 

Says Mason Curran, “As we make our investments in the region, the location of future stations will have an impact on where we look to invest beyond where we currently are investing.” 

Northgate would also like to attract more residents and employers by building a pedestrian-friendly urban neighborhood around Northgate Mall and the site of a coming light-rail station. Wallace Properties built two apartment projects with a total of 428 units near the Northgate bus transit center partly in anticipation of the Link station that will go in in coming years. Wallace says being able to take rail to the U District and downtown in a matter of minutes could make Northgate attractive to small and midsize companies or the satellite office of a larger company. Wallace has another project underway near Green Lake, about a half mile from Link’s Roosevelt station.

One of the major benefits of light rail will be binding together the Bellevue and Seattle city centers that have become more and more isolated from each other as residents refuse to fight traffic to cross Lake Washington on the two bridges. King County Council member Claudia Balducci, the former mayor of Bellevue, calls the Eastside light-rail line a “game changer” for her city.

“Light-rail stations present a tremendous opportunity in terms of driving development and growth,” says Balducci. With nearly two million square feet of development underway in downtown Bellevue and the city’s transportation systems struggling to serve all this activity, “This type of transit is absolutely critical to keep our business growth and prosperity growing,” she asserts. “Businesses have signed leases because they know this type of transit is coming.”

Bellevue got a jump on its transit-oriented development by creating an overlay district in which a single set of zoning guidelines is established for the area around stations.  

With the line going through a single-family residential neighborhood, a part of downtown and a redevelopment zone, the overlay makes it much easier to plan and permit projects, Balducci says. 

The new zoning guidelines opened the door for redevelopment of the Bel-Red Corridor, a 900-acre swath of land between downtown Bellevue and Microsoft’s Redmond campus, where two stations are planned. Seattle-based Wright Runstad & Co. acquired its 36-acre Spring District property in the Bel-Red Corridor in 2007, prior to Sound Transit’s settling on a route for light rail in Bellevue.

The location of the Spring District was strong enough that, even if the light rail didn’t go through, the property was near downtown Bellevue and “clearly in the path of growth,” says Wright Runstad President Greg Johnson. “Bellevue laid the groundwork with its land-use policies and zoning that enables density around the stations,” says Johnson, “and that made it easier for Sound Transit to pick the route it did.”

When the Spring District is completed, at an estimated cost of $2.3 billion, the transit- oriented project will include 5.3 million square feet of commercial and residential space. 

This year, Wright Runstad will break ground on a three-story, 100,000-square-foot building for the Global Innovation Exchange, an academic institute for tech innovation backed by Microsoft, the University of Washington and Tsinghua University of Beijing. Meanwhile, Seattle-based Security Properties has started developing five mixed-use residential buildings in the district. 

Wright Runstad is also planning a development at the Angle Lake station, one stop south of Sea-Tac Airport. The firm has a 7.8-acre site adjacent to the station for a mixed-use office, hotel and retail project that will open in phases, with the potential for residential units as well. The Angle Lake station is due to open later this year.

Johnson is a longtime believer in transit-oriented development. The old WaMu Tower that his firm developed in downtown Seattle in the 1980s connects directly to the transit tunnel that runs under downtown. That connection continues to make the older building competitive with newer office buildings a few blocks away, Johnson says.

While most of the development today is occurring in Seattle, suburban cities are preparing for major change. Lynnwood’s City Center will benefit from its status as the northern terminus of light rail until Link is extended to Everett. Sound Transit expects the Lynnwood station, which begins construction in 2018, will be its busiest station, with nearly 20,000 residents boarding daily. 

Lynnwood is working with Sound Transit on preliminary design for a station near the Lynnwood Convention Center and a stop at the Ash Way Transit Center. With downtown Seattle a 26-minute train ride away, city officials expect businesses will be attracted to Lynnwood because of the improved transit connections.

If Sound Transit Phase 3 passes this fall, Lynnwood’s light-rail station will eventually connect to Alderwood Mall and regional employment centers at Boeing in Everett and at Paine Field, where a new passenger terminal is planned. Zoning, which allows for buildings up to 30 stories high, should allow for plenty of housing to absorb the 50 percent increase in population Lynnwood expects over the next 20 years.

But attracting retail and employment, critical to many of these developments, could require incentives to succeed.

“[Retailers] can’t afford to be out there by themselves waiting for customers to arrive unless they are underwritten by their landlords,” says Pat Johnson of Outcalt & Johnson Retail Strategists in Seattle.

That’s one reason Wright Runstad’s Johnson would like to see tax incentives to spur retail development around transit stations. 

“What you get is a virtuous cycle,” he points out. “The more people living and working near the stations and the fewer driving, the faster things happen with retailers in the area.”

Consequently, the whole community becomes more attractive for additional development.

“Instead of waiting 30 years to see the full effect of the station,” Johnson notes, “you can see it in 20 years or even 15 years.”

And the public ends up getting a higher return on its transit investment through fewer people driving, higher property- and sales-tax revenue, and a higher quality of life for people living around the station. 

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