A $40 million face-lift for Bellevue Square

Bellevue Square is in a gem of a location for a shopping center: next to a tall building where 1,100 Microsoft employees work and surrounded by 19 ZIP codes with average annual household incomes above $90,000.

The shopping center is in the midst of a $40 million renovation, its first overhaul in 23 years. When the mall closes at night, workers tear up the floors, install new balcony railings and paint ceiling sections a warmer hue.

The nationwide slumping retail economy is having little effect in Bellevue, developer Kemper Freeman Jr. told the Seattle P-I. Thus, his renovations and other plans for his Bellevue properties are continuing as planned.

The Bellevue Square renovation -- another step in the Eastside city's march toward solidifying its status as a retail shopping hub -- is scheduled to be complete by the start of the 2008 holiday shopping season, about a year later than originally planned.

"Everything we do is market-driven," Freeman said, acknowledging that he has seen some slowdown in condo sales. "This economy has been phenomenal."

Kemper Development Co. owns about 10 percent of downtown Bellevue. Shopping centers, as a rule of thumb, need to be remodeled every 10 years, Freeman said. By that standard, Bellevue Square is long overdue. The last major renovation was its transformation in the early 1980s into an indoor mall.

When justifying his confidence in the local economy last week, Freeman rattled off Boeing Co. sales numbers for its 787 and 737 aircraft lines, which have order backlogs that will keep workers employed for several years.

		Andy Rogers / P-I
	The signs tell the story at Bellevue Square, as the mall undergoes its first big renovation since the early 1980s.

"It's why I can sleep at night," Freeman said of Boeing's regional business. "Six years will get us through this frumpy time."

Freeman's company isn't the only developer that has discovered Bellevue as a hot retail market: Starting next year, Freeman's retail properties will have major competition from The Bravern, which is under construction a few blocks east and will be anchored by the Pacific Northwest's only Neiman Marcus store.

The Bravern, which will boast its own group of Microsoft employees, is scheduled to open in fall 2009.

Neiman Marcus will start work on its interior in August, according to Schnitzer West, the developer of The Bravern.

Within a 10-minute drive, the Bellevue shopping centers have 102 percent of the population of famed Rodeo Drive in Beverly Hills, Calif., and 98 percent of the household income, said Tom Woodworth, a senior investment director at Schnitzer West.

Although Woodworth is aware of what retailers are facing nationwide, he cited a list of local companies, such as Expedia, T-Mobile and Overlake Hospital, that are boosting the microeconomy.

"It's rare to have that kind of concentration and entrepreneurial acumen," Woodworth said.

Filling up The Bravern is proving feasible. "I literally have signed two leases in the last two weeks. We are working on the announcements," Woodworth said.

Kemper Development embraces the added competition, marketing vice president Jennifer Leavitt said. "It's a big compliment to the Bellevue market that Neiman Marcus chose Bellevue."

Freeman's adjacent properties are boosted by a shiny retail center, he said. Dubbed the "Bellevue Collection," they are a mix of retail, office, hotel and condominiums at Bellevue Square, Bellevue Place and Lincoln Square.

"Good retail is the best catalyst for other forms of commercial property," he said.

Among the changes at Bellevue Square:

The coffee-colored quarry tiles are being replaced with creamy limestone, in keeping with an "urban garden" theme.

The tugboat play area for children will move to a 10,000-square-foot child-focused shopping and play space on the third floor, with two giant elevators to help the stroller contingent get up there.

New retailers, including high-end stores Burberry and Lacoste, are moving in.

The clock tower, which was in the center court, will be moved to the corner of Northeast Sixth Street and Bellevue Way Northeast.

Such investment in retail growth gives back to the economy, said Bob Derrick, the city of Bellevue's director of economic development.

Besides the sales tax that it generates, retail development has a magnet effect, drawing in other retailers. In three to four years, downtown Bellevue should rival the Union Square shopping district in San Francisco, he said.

"There's just this huge amount of disposable wealth on the Eastside," Derrick said, predicting that when the dust settles, "Bellevue will be the key retail center in the Northwest."