Earlier this month, Vulcan began the process of community outreach as it moved forward with plans for a 570-unit, mixed-use development on the southeast corner of 23rd and Jackson. Wednesday, it sealed the deal.
The Seattle real estate giant announced it has paid $30,900,000 to acquire the Promenade 23 shopping center and the commercial area surrounding Starbucks across the street.
“We are excited to introduce housing to this very prominent intersection in the Central Area,” said Ada M. Healey, vice president of real estate for Vulcan said in the announcement. “We care greatly about preserving the authentic characteristics of the neighborhood while developing a project that that aligns with the community’s priorities.”
Vulcan is planning for the review process to wrap up by September with construction starting by June of 2017. Construction is expected to last about two years. The June timing would put the project into motion around the planned groundbreaking of the second phase of the 23rd Ave corridor improvements currently causing smaller merchants headaches around 23rd and Cherry. Jackson, meanwhile, has also been envisioned for pedestrian and safety improvements.
The company said it is not currently planning to redevelop the parcel on the north side of Jackson where Starbucks and Walgreens are part of a cluster of big-chain commercial businesses.
In its announcement, Vulcan said it plans to utilize Seattle’s Multi-Family Tax Exemption program, “reserving 20 percent of the project’s units for workforce housing with a range of price points starting at 65 percent of Area Median Income.” Under the program, developers receive an up-to-12-year break on property taxes on their buildings — but not the land. The results mean under-market rents should be maintained for at least 12 years. A developer may leave the program after notifying the city but assumes “responsibility for any additional taxes, interest, and penalty imposed pursuant to State law.”
The deal represents a nice flip for Weingarten Realty — it acquired the property about five years ago for $18.4 million.
UPDATE: The acquisition also treads atop a history of failed ambitions at the corner:
Aspirations for the Promenade 23 shopping center at 23rd and Jackson once included a two-block development complete with sky bridge. This vision was lead by a young Jimmy Sumler, who owned the property along with his father in the 50s and 60s, according to George Staggers of the Central Area Development Association (CADA). Today, the shopping center may not have a sky bridge, but it is an economic hub of the Central District. It is also on the verge of being sold to Weingarten Realty Investors, a large real estate investment trust based out of Houston, Texas.
Neighborhood development watchers, meanwhile, also have their eyes on Midtown Center at 23rd and Union where a deal is expected to be announced soon.
The full announcement is below.
Vulcan Real Estate Purchases 23rd & Jackson Land Parcels
Community-oriented mixed-use development will reinvigorate Seattle’s Central Area neighborhood
SEATTLE — February 17, 2016 — Vulcan Real Estate today announced it has purchased two retail properties at 23rd & Jackson from Weingarten Realty. The property includes approximately six acres on the north and south sides of South Jackson Street, on the east side of 23rd Avenue South. The purchase price is $30.9 million.
Vulcan is in the early planning stage for the 3.6 acre south parcel known as Promenade 23 where the company intends to develop a mixed-use project that will include approximately 570 units of rental housing in two five- to seven-story buildings. The plans include three to four levels of subterranean parking and a publicly-accessible plaza. Ground-floor retail will also be incorporated in the project.
“We are excited to introduce housing to this very prominent intersection in the Central Area,” said Ada M. Healey, vice president of real estate for Vulcan Inc. “We care greatly about preserving the authentic characteristics of the neighborhood while developing a project that that aligns with the community’s priorities.”
Vulcan has proactively begun hosting meetings with various community organizations including the Central Area Land Use Review Committee to solicit input regarding the needs of nearby residents, and to help advance the priorities set forth in the 23rd Avenue Action Plan which aims to make the neighborhood healthy, equitable, economically viable and livable.
“Having worked closely on Promenade 23 on behalf of the community since 1994, I am pleased the site will be purchased by a local company,” said George Staggers, CEO of the Central Area Development Association (CADA), “Vulcan Inc. has a demonstrated track record of partnering with communities where they build so I am very optimistic about the site’s future.”
Vulcan plans to participate in Seattle’s Multi-Family Tax Exemption program, reserving 20 percent of the project’s units for workforce housing with a range of price points starting at 65 percent of Area Median Income for the Seattle-Bellevue MSA (Metropolitan Statistical Area) per the U.S. Housing and Urban Development (HUD) Income Tables. The project is targeting LEED Gold certification.
The new development is being designed by Runberg Architecture Group, which designed the Low Income Housing Institute’s nearby award-winning Ernestine Anderson Place. As part of its commitment to social equity goals, Vulcan will require its general contractor to work with its subcontractors to make good-faith efforts to increase apprenticeship participation and build relationships with local apprenticeship programs. A date has not yet been set for the project’s initial Early Design Guidance hearing.
Vulcan intends to break ground on the first phase of its project at the southeast corner of South Jackson Street in mid- to late-2017. The company estimates construction will last approximately 24 months.
Vulcan has no current development plan for the north parcel which includes approximately 36,000 square feet of existing retail including a Walgreens and Starbucks.