Heart Surgery

Stitching up downtown

Wednesday, March 26, 2014

“Most living organisms benefit from having a heart”
—Mark Hinshaw, Seattle author and urban design consultant.

Looking toward the bay from Holly Street, the heart of Bellingham looks like nothing much. An empty lot lies downslope from Holly, containing a few cars and the invisible Army Street, non-existent except on the maps. There’s the concrete incline of Chestnut Street, then Mr. Buffet’s coal train and the corpse of Georgia-Pacific.

The emptiness is where the proposed and besieged Army Street project is imagined, pumping new blood into downtown, Old Town and the waterfront.

“If you laid a big hourglass across Bellingham”—Jim Long points to a map on his office wall—“the narrowest part of the stem would be just about here.” Long, the director of the Bellingham Public Development Authority (BPDA), points to the 2.5-acre space where he envisions a parking garage, hotel, conference center, business offices, dwelling units, retail shops and pedestrian plazas uniting downtown with the Port of Bellingham’s redevelopment hopes. The property holds potential to tie together the city’s growing Arts district with Old Town and proposed street improvements and restoration of the Granary Building.

“We’re in the geographic middle, with a great view of the bay,” Long says. “What a location for this kind of project. If we can build this connection, the waterfront becomes part of downtown rather than being separated, on the other side of the tracks.”

The project and vision have enjoyed the support of a narrow majority of Bellingham City Council. Three former mayors and a number of local architects and developers have spoken out in favor of it. Still, there’s reason to doubt whether the BPDA and Executive Director Long will be around long enough to find a master developer with the enthusiasm and money to bring the Army Street project to life.

Created early in the previous administration of Mayor Dan Pike, the BPDA was chartered as a public corporation separate from the City of Bellingham that might allow its director and volunteer board of local business owners and developers sufficient freedom to locate that master developer. Modeled after a similar organization that helped develop the Tacoma waterfront, the development authority was envisioned to be jointly supported by both the city and Port of Bellingham. The port went its own way, stranding the BPDA with a limited mission.

City Council member Gene Knutson—the swing vote on the continued funding of the PDA—says its usefulness has ended. The agency’s done a good job, he says, but the city can take it from here. When the Council takes up next year’s budget, in October, Knutson says he’ll vote to do away with the development authority.

Mayor Kelli Linville has questioned the BPDA’s purpose since her term began. She does not share Knutson’s friendly view of the organization’s accomplishments.

“I can’t see that the city’s had any return for the money we’ve spent on PDA in these five years,” Linville said. “If you’re spending public dollars, you’d better see some return.”

Between 2008 and 2013 the City Council transferred $1.34 million from the General Fund to the public development authority. Linville was exasperated that the Council agreed to fund the BPDA through 2014 by additional transfers from parking services and street funds, funds she says are terribly in demand elsewhere. The BPDA budget for the current year is the largest so far—$550,000. Of that amount, $175,000 goes to the salaries of Long and his executive assistant. Most of the remainder pays a range of consultants in arcane branches of physical and financial research, assigned to determine whether the Army Street project is workable.

Geotechnical sleuthing is a large part of that arcana.

“The project will need to be built on bedrock,” Long says. “We have to find the bedrock under years of fill dirt. And we need to measure the tidal effect on the water table under the site. A host of other technical aspects have to be explored.”

Land titles and survey documents must be searched for obscure, hundred-year-old legal boundaries within the site, he said.

“And we need marketing research and a feasibility report, to see if this will work. The City of Bellingham doesn’t have the resources to do all this.”

Linville believes her administration is well equipped for whatever needs doing.

“We don’t need the PDA to do this,” she says. “We should not be paying for things we can do ourselves. I have not seen that the PDA can do better than the city can in developing these properties.”

City Council is divided on the effectiveness of the PDA, originally supporting the effort to use public and private experts to help jumpstart waterfront redvelopment, but growing disenchanted with the rising costs and sluggish pace of results. The collapse of capital and development interest in the economic downturn of 2007 hasn’t helped that pace. But Council members who have supported Long’s efforts don’t see much sign of the City Hall resources the Mayor and Knutson are counting on.

“How does she propose to do [the Army Street project]?” Council member Terry Bornemann asked rhetorically. “There’s been nothing on her part in the way of technical staff allocations. Could we do it ourselves? Maybe, but we’ve not done it, and we’re not doing it.”

Last year, City Council put the PDA on a short budgetary leash. Long must show the council that he has met established benchmarks every six months. The BPDA director appears unfazed by that demand. Long says it’s nothing more than he expected, a matter of budgetary prudence that should perhaps be standard practice in all areas of city government.

What Long doesn’t understand, he admits, is Mayor Linville’s opposition.

“I don’t know why, I really don’t. I don’t understand the friction, unless you think there’s no further work to do in revitalizing downtown.”

Revitalizing downtown has filled night meetings and produced reams of unrealized proposals, a stream that has flowed apace with the migration of economic development north to Meridian Street and east to Barkley Village. Witnesses to that hollowing-out of the downtown core say it has a lot to do with parking.

Long’s proposal for the Army Street site includes a parking garage that could be as large as 800 spaces, topped by a building pad with offices and retail shops adjacent to a 200-room hotel and a conference center.

The mayor thinks that’s excessive, and she believes the effort there is siphoning away resources needed elsewhere:

“We don’t need a great big 800-space parking garage. Our parking studies show that we have some problems at peak hours, but they could be solved by providing parking in a number of places close to the demand, not centralizing it in one place.”

Linville wants to spruce up the city-owned Parkade, at Commercial and Holly streets.

“We’re doing a Parkade Perk-up to brighten it up and make it more pleasant,” she says. “We’re putting the Visitors and Convention Bureau in the Parkade Building so that there’s something going on there.”

More than 50 years have passed since that most pedestrian of questions—where to park the car—led shoppers away from their downtowns in favor of the outskirts with their miles of asphalt, architectural clones and stores are as big as a county, where the parking is free. It’s an idea whose time has gone, says Mark Hinshaw,  a noted urban design consultant, author and contributing writer for in Seattle.

“As a consultant, I can tell you that many communities are trying desperately to get back to the heart of the city,” Hinshaw said.
“Younger folks reject that outer area and want to live in, work, walk, eat, drink, meet each other, hear music and buy things, in the heart of the city. So do their parents, in growing numbers; the Boomers as they get older are seeking the same things. Both groups are fueling appreciation of the centers,” he said.

Planned or otherwise, Hinshaw says development in city centers will happen. The challenge is to do it well, and to match what urban seekers are seeking (hint: it isn’t bright and shiny. It’s more likely the charm of a hundred-year-old building).

BPDA Director Long made his reputation by helping to develop a 4.5-million-square-foot commercial/retail/business/industrial park in Broomfield, Colo. He says he’s quite aware that downtown Bellingham is not suburban Denver. The Army Street project will fit Bellingam, he promises—in scale and character.

What Long calls the “concept plan” is available on the PDA’s website, but the design process is not spelled out. A nonbinding agreement inked last summer sketches out the potential cost-and-revenue sharing between six property owners and the city, which also owns property—including street rights-of-way—that could be contributed to the plan. That cooperative agreement is key to a coordinated site plan attractive to a master developer, Long said. Details await the consensus of the property owners, the PDA, city government, and a master developer. None of that comes about until a feasibility study is completed.

Long says there’ll be plenty of opportunity for City Council and citizens to voice their opinions on the character of the plan and whether it looks like Bellingham. The agreement was a critical piece that allows Long and the BPDA to speak publicly about properties that belong to private owners, he explained to listeners at a presentation in February.

That coordination between public and private interests is what a public development authority is designed to do. When pitched to City Council in 2008, consultants explained that cities charter PDAs for major projects that require attracting private capital.

Development authorities have become a popular tool for city governments all over the country. In Seattle, PDAs oversee a hospital, a museum, public housing, the International District, and Pike Place Market. Bellevue’s main performing arts venue,  Meydenbauer Center, is owned and managed by that city’s PDA. Tacoma set up two PDAs to develop its highly successful waterfront renewal projects.

Bellingham PDA Executive Director Long reports to an unpaid seven-member board of directors. including developer and former Mayor Ken Hertz. Hertz differs markedly with Mayor Linville concerning the PDA and Long’s performance.

“The PDA’s a good tool,” Hertz says. “If Kelli doesn’t know how to use it or doesn’t want to, that’s a problem she has. It would be a big mistake to do away with it. If we don’t do something on Army Street, we’re left with a big hole in the ground.”

If something like the Army Street project was imagined when Mayor Pike and the City Council created the Bellingham PDA in 2008, it went unpublicized. The PDA’s stated purpose at that time was to recover the city’s investment in four languishing public properties—the Federal Building at Magnolia St. and Cornwall Ave.; the Bellingham Sash and Door site at 600 West Holly; a parking lot at 1100 Cornwall Ave., and a quarter-acre vacancy near the phantom Army Street between Holly and Chestnut streets. The city has since taken back control of the Federal Building (some 40 city employees will be moving into it) and 600 West Holly St.

In 2012, the PDA sold the 1100 Cornwall site to Catholic Community Services for $1.17 million, a loss of more than $300,000 from the city’s original purchase from the downtown parking fund. Although Long originally proposed to use the proceeds of that sale to finance PDA operations, the City Council voted instead to return proceeds to the parking fund.

Owner of numerous properties downtown,  Robert Hall remains angry about the raid of the fund for a money-losing sale of the Cornwall St. property:

“Seven-tenths of an acre, a superb view of the bay, perfectly located for an office tower with a parking garage and the PDA sells it at a loss, to bankroll a pie-in-the-sky project,” Hall says.

A leader in renovating iconic buildings downtown (the Leopold Hotel and the Herald Building, among others), Hall had urged the Council to put a parking garage on the lower reaches of the Cornwall site and contract with a private developer to put an office building on the upper portion.

“The people who’ve moved their offices out to the business parks on the edge, they’d move back here in a flash” if there was abundant and adequate parking, he says. 

Long maintains that the sale of the Cornwall property to Catholic Community Services was a better move than it might appear—it puts that land back in private hands to start producing tax revenue and development fees, and it serves the social purpose of adding to the supply of low-income housing.

Divesting itself of these other properties, the PDA was left to focus on its vacant quarter-acre between Holly and Chestnut. Two other small city-owned holdings are nearby, and the three parcels together make up the largest ownership within the 2.5 acres or so of the proposed redevelopment site.

According to Long’s concept, each of the owners, including the city, will profit from the completion of project according to the percentage of land value each brings to the coalition. The city’s and PDA’s holdings may be as much as 30 to 40 percent of the total. Through these revenues, the PDA can repay city investment and make itself whole.

Last fall, five of the private property owners on Holly Street and Central Avenue agreed to have the PDA explore the feasibility of developing their properties as one. The coalition partners, as Long describes them, include Trillium Corporation, the Donna MacDonald Trust, George Dyson, Wright Angle LLC, and the Thornberg Trust. They have agreed not to sell their properties for the next three years while the PDA does research and looks for a developer.

“That’s what they’ve accomplished in all these years?” Hall demands. “They’ve got a non-binding agreement? Any number of Bellingham people could have done that in an afternoon.”

Long says the agreement represents an extraordinary bargain for the city.

“Normally, you’d have to buy the properties to assemble them for a project of this kind. We’ve been able to freeze the properties for three years, without paying anything. The partners know it’s to their advantage to be in the coalition because it multiplies the value of their land.”

As with all building sites, there are imperfections with the location. BNSF trains roll loudly close to where Long envisions a hotel and conference center. Freight traffic is expected to boom in the coming years. An additional 18 coal trains, daily are predicted if the proposed Cherry Point shipping terminal wins approval.

In a sizzling letter to City Council late last year, Hall was incredulous: “What developer and lender would put down tens of millions of dollars to build high rise structures including a hotel, so close to these tracks, especially with all the hullaballoo going on about the coal trains?”

It’s been done. The 360-room Marriott Waterfront Hotel in Seattle, built in 2003, stands about 30 feet from the train tracks.

Long’s Army Street concept calls for a 30-foot-high, noise-diverting concrete wall to separate the new development from the train tracks. He hopes also to persuade the city to close the Central Ave. crossing, eliminating the need to sound train horns near the proposed hotel. He hopes to negotiate air rights above the railroad and create a plaza connecting the Army street development with the Port’s incipient waterfront renewal project.

The BPDA was hobbled early on, some critics say, by the failure of the port to bless the effort.

“This made no sense and was not in harmony with the joint development effort,” architect Dave Christensen commented. “It has continued a perceived public rift between city and port.

“The BPDA is the one agency that can provide real action and development projects, but it needs to be initially funded by both the port and city.”

A survival crisis for BPDA and all its plans appears likely to arrive seven months from now, when the Council debates next year’s budget. Votes in support of the organization are fading.

“My mind’s made up,” Knutson said earlier this week. “No ill feelings toward anyone at PDA—they’ve done a good job—but it’s time to move on.”

A key vote in the PDA’s survival, Knutson says the Army Street project belongs in a new department, the Office of Financial Development, headed by Tara Sundin and reporting directly to the mayor.

Council members Terry Bornemann and Jack Weiss continue to voice strong support for the BPDA and its continued work on the Army Street projects. Weiss says the PDA has been treated unfairly by the city administration, but “they’ve made the best lemonade they could out of the lemons they were given.”

“Some say we should cut our losses and not take a chance,” Council member Michael Lilliquist commented, “but I don’t want us to decide on that basis. We could be missing a great thing.”

Council President Cathy Lehman, who referred to herself as “the first vote” against continuing to fund the PDA, voiced an aversion to risk and doubts about the public’s role in the Army Street project.

“We have these grand ideas about what we can make happen. But maybe we should just regulate what we have to, and let the market forces take over. The PDA would create a project where none exists; it’s a beautiful idea, it’s exciting, but I’m not convinced. I have to sign my name to the ordinances. I have to sleep at night.”

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