Updated Tuesday, January 22, 2013 at 10:31 PM
Vulcan was tapped to be the Seattle Housing Authority’s partner on the bold $300 million redevelopment of Yesler Terrace, the city’s first public-housing project.
After interviewing and evaluating competing proposals from Vulcan and Forest City of Los Angeles, the Housing Authority board unanimously voted Tuesday to start negotiating with Vulcan.
If negotiations with Vulcan break down, the board would try to strike a deal with Forest City, as board members said they were impressed by proposals from both firms.
Vulcan, Paul Allen’s real-estate firm, stressed its experience in developing more than 5 million square feet of office, lab, retail and residential space in South Lake Union, transforming the sleepy neighborhood into a vertical community anchored by Amazon.com. The company said it would approach Yesler Terrace in a similar way.
“They have a great track record locally,” said John Littel, chair of the Housing Authority’s board. “One thing that impressed me was their commitment to economic opportunity for local residents and local contractors.”
Ada Healey, vice president of Vulcan Real Estate, said the company was thrilled about being selected. A nonprofit developer, Capitol Hill Housing, is advising Vulcan on affordable housing.
“One thing we tested,” said Seattle Housing Authority board member Kollin Min, “was that they understood certain principles, such as residents’ rights to relocation, were not negotiable.”
The Housing Authority solicited qualifications last year for a master-development partner, and three firms responded: Vulcan, Forest City and Hunt Companies of El Paso, Texas. Hunt was eliminated from consideration after the authority reviewed its expertise in mixed-income, mixed-use projects.
Forest City, a 90-year-old publicly traded company, would partner with the Jonathan Rose Companies, which describes itself as a green real-estate firm based in New York.
Yesler Terrace opened in 1941 as Seattle’s first public-housing project. Just south of Harborview Medical Center on First Hill, it is within walking distance of downtown and offers spectacular views of Elliott Bay and Mount Rainier.
Yesler’s 70-year-old apartments and aging infrastructure need replacing, according to the Housing Authority. It plans to sell some of the 30 acres to a private developer to finance new public housing.
The developer would build about 3,000 high-rise, market-rate apartments and condos on the property, as well as office towers up to 300 feet tall.
The Housing Authority hopes to use $145 million from property sales to rebuild Yesler’s 561 well-worn apartments, along with streets and water and sewer lines. Residents would be relocated during phased construction. The project could take up to 20 years.
In all, Yesler Terrace is zoned for up to 5,000 housing units, 900,000 square feet of office space, and up to 153,000 square feet of retail and community space.
The authority’s vision for a dense, vertical, mixed-income neighborhood is “untested anywhere in the United States,” according to Matthew Gardner, a land-use consultant hired by the city.
Andrew Lofton, Housing Authority executive director, said he expected negotiations with Vulcan to start next week and hopes they’re finished by June. Determining what Vulcan’s compensation package is, and how it’s derived, is one part of the upcoming negotiations, Lofton said.
Bob Young: 206-464-2174 or email@example.com