The Gristle

Open Secret Disclosed

Wednesday, September 12, 2018

OPEN SECRET DISCLOSED: The purchase of the long-empty JCPenney department store building and a partnership to redevelop it into rental housing for middle incomes was an open secret in downtown Bellingham; and it was kept a secret for a good reason, that premature disclosure of the negotiation between sellers and partners might topple the most strategic, timely purchase and sale agreement in the city’s history.

Under the proposal officially presented this week to Bellingham City Council, the city will purchase the 60,000 square foot structure for $2.85 million and retain ownership of the land. The city will also enter into a long-term land lease with local private developers Jeff McClure and Jeff Kochman, who will undertake the financial risks of developing the property for affordable housing in the downtown core.

The agreement requires the partners to purchase the building, and provides an option on the land itself under favorable terms for up to 15 years; but the lease also provides for a degree of control by the city on development timetables and streetscape improvements for as many as 90 market-rate apartments above commercial retail and office space. Structural engineers estimate the existing bones of the building can support an additional two floors, bringing the total to four.

The property has been almost entirely vacant since JCPenney left the downtown in 1988 and relocated to Bellis Fair Mall—part of that era’s great reatil exodus from town centers across the country, draining those urban cores of economic vitality. The vacant shell itself—an airless, window-less department store from a bygone era—proved a challenge to adaptive reuse without significant financial outlay. While Bellingham’s downtown has almost completely recovered from the loss of its retail center, this one major vacancy remained.

“It’s located right in the middle of our downtown. But it is also a challenge in building reuse today, because it just doesn’t work as modern retail in downtown,” Tara Sundin, COB’s lead manager for Community and Economic Development, reported to City Council this week.

Council was not surprised by her report; nor is anyone who is paying attention to murmurs downtown.

Early conceptual sketches have papered the walls of architect McClure’s downtown offices for several moons; and a low-threshold buzz hummed among downtown merchants in the City of Subdued Excitement.

Mayor Kelli Linville was candid to the Gristle about the firming proposal in July, and scheduled advanced disclosures with Cascadia Weekly and the Bellingham Herald late last month under the provision that the information would be embargoed until City Council could be formally notified in their first meeting after their summer recess. Both publications agreed to keep a lid on a simmering story.

In her methodical managerial style, the mayor was even more thorough earlier in the summer—carefully floating the concept to major property owners, developers and anchor business owners downtown.

“We had meetings with three of the biggest developers and business owners downtown,” Linville confessed. “The reception from two was extremely positive. They know the building, and would never buy it or invest in it as part of their own portfolio or business plan, but they understood its economic drag on all of their properties and tenants. And they know it could be 20 years or more before private investment stepped forward to take ownership to redevelop that building on this particular site.

“Yes,” she admitted, “it is an advantage to a particular developer for the city to partner on the purchase of the land. But that developer was also ready, in a way others were not, to step up and assume the risks of that development.

“In the end, our plan is to recoup the money that the city invests,” Linville said. “We are not planning on owning the property in the long term, and the terms of the agreement encourages our partners to buy it from us.

“But for our involvement, I don’t think anything would be happening on that property for a long time,” she said. “I am a capitalist. I believe in private investment and allowing the private sector to do things they are good at. But the public sector is also good at doing certain things. We’re good at kickstarting a project that is never going to happen—or not happen soon—without our support and investment.

“I believe we have a strong position based on public benefit—not just because it is going to be housing in a form that is needed in Bellingham, but because it involves the revitalization of downtown,” Linville said. “Our financial position is strong, and whether through lease or purchase the city will recover our outlay.

“It really sets the tone for what people think is happening downtown. When they look at that block, and they believe it is dead, that sets a tone and an expectation for the entire downtown.”

“Those of us who spend time downtown know there’s not a lot of vacancy,” Sundin agreed. “But this very large vacant building creates a negative impression of the overall health of the downtown. This is going to change everything downtown. I think we’ll see more investment, more interest, for all of downtown.”

“In the 25 or 30 years since that building has been vacant, I have been sitting here and I cannot tell you how ecstatic I am that something is happening,” Council member Gene Knutson said. “To the downtown business people who hung in there, didn’t give up, didn’t pick up and walk away, it is going to pay off now. You are going to see a totally renovated downtown. We had a mall recession years ago, and that mall recession is now over.”

“It’s people that make downtowns work,” Linville agreed. “The more workforce housing we create downtown, the more people are going to be going out, eating and shopping, and using our downtown center—throngs of people, people who live there.”

Pick and Go Silver Reef
Past Columns
The Raucous Caucus

April 17, 2019

Dragged

April 10, 2019

Edge City

April 3, 2019

Fixing the Fix

March 27, 2019

Halfway Houses

March 20, 2019

New Directions

March 13, 2019

Fire and Ice

March 6, 2019

The Big Short

February 27, 2019

Marina Lacuna

February 20, 2019

New Bites at the Apple

February 13, 2019

Coal Folds

February 6, 2019

Refocusing the Narrative

January 29, 2019

Old Town, Old Story

January 23, 2019

Ranker Unanchored

January 16, 2019

‘Alternative Methods’

January 9, 2019

Top Stories, 2018

January 2, 2019

Et Tu, #MeToo

December 26, 2018

Turn That Corner

December 19, 2018

Events
Today
Skagit Valley Tulip Festival

10:00am|Skagit Valley

Essence of Bellingham Photo Competition

10:00am|Whatcom County

Unstable by Design

7:30pm|Sylvia Center for the Arts

Silent Sky

7:30pm|Anacortes Community Theatre

Tulip Festival Street Fair

10:00am|Downtown Mount Vernon

Spring Book Sale

10:00am|Fire Station #1

Bellingham Beer Week

12:00pm|Throughout Bellingham

Genre Legends, Hot Dogs

7:30pm|Upfront Theatre

Buffett Beach Bash

7:30pm|Anacortes Port Transit Shed

The Coronation of Poppea

7:30pm|Performing Arts Center Mainstage

Tulip Pedal Bike Ride

7:30am|La Conner Elementary School

Pancake Breakfast

8:00am|Ferndale Senior Center

COB Earth Day Work Party

9:00am|Fairhaven Park

Fun with the Fuzz

9:00am|Bellingham Police Department

Bellingham Bay Bocce Tournament

9:30am|Bellingham Sportsplex

Wild Things

9:30am|Stimpson Family Nature Reserve

Bellingham Farmers Market

10:00am|Depot Market Square

Kiwanis Kids Egg Hunt

10:00am|Maiben Park

Cedar Dust Trail Ride and Party

10:00am|Boundary Bay Brewery

Plant Sale and Easter Events

10:00am|BelleWood Acres

Community Easter Egg Hunt

11:30am|Bellingham at Orchard

Obrigado Wines Tasting

2:00pm|Seifert & Jones Wine Merchants

Jesse Otero Art Talk

4:00pm|i.e. gallery

Splinter Ideas, Halibut on the Moon

4:00pm|Village Books

Artist Workshop

6:00pm|Bellingham Public Library

Skagit Valley College Drag Show

7:00pm|Lincoln Theatre

Problem Child and Ten Miles Wide

8:00pm|Mount Baker Theatre

Blue collar comedy in Edison

8:00pm

Salsa Night

9:00pm|Cafe Rumba

Neil Berg
Tomorrow
Skagit Valley Tulip Festival

10:00am|Skagit Valley

Essence of Bellingham Photo Competition

10:00am|Whatcom County

Tulip Festival Street Fair

10:00am|Downtown Mount Vernon

Bellingham Beer Week

12:00pm|Throughout Bellingham

Plant Sale and Easter Events

10:00am|BelleWood Acres

Sedro-Woolley Community Breakfast

8:00am|American Legion Post #43

Rabbit Ride

8:30am|Fairhaven Bicycle

Wild Things

9:30am|Stimpson Family Nature Reserve

Egg Hunt and Easter Brunch

10:00am|Boundary Bay Brewery

Bellingham Handmade Market

11:00am|Goods Nursery and Produce

Langar in Lynden

11:00am| Guru Nanak Gursikh Gurdwara

Barkley Village Egg Hunts

11:00am|Barkley Village

Easter Brunch

11:00am|Ciao Thyme Commons

Nina Gerber and Chris Webster

2:00pm|Nancy's Farm

Trove Web Village Books
Monday
Skagit Valley Tulip Festival

10:00am|Skagit Valley

Essence of Bellingham Photo Competition

10:00am|Whatcom County

Bellingham Beer Week

12:00pm|Throughout Bellingham

Wild Things

9:30am|Stimpson Family Nature Reserve

Earth Day Sustainable Food Fair

11:00am|Viking Union 565

Plant Diagnostic Clinics

4:30pm|Bellingham Public Library

Before the Flood

5:30pm|Pickford Film Center

Women's Backpacking Round Table Discussion

5:30pm|REI

Swing Dancing Classes

6:00pm|Presence Studio

Healthy Desserts

6:30pm|Community Food Co-op

Student Poetry & Art Showcase

6:30pm|Burlington Public Library

Poetrynight

7:00pm|Alternative Library

Salish Sea Early Music Festival

7:00pm|St. Paul's Episcopal Church

Wild & Scenic Film Festival

7:00pm|Mount Baker Theatre

Guffawingham

9:00pm|Firefly Lounge

see our complete calendar »

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