Property owners predict a profit if viaduct goes away

From Roger MacPherson's lushly landscaped deck, the Alaskan Way Viaduct is so intimately close he can read license plates or see the fast food that drivers are eating.


		Dan DeLong /P-I
	Liz Fairbanks, 31, a longshoreman, looks at the Alaskan Way Viaduct just outside her apartment in the OK Hotel. Tearing down the viaduct would give her a waterfront view.

The Kirkland architect bought a two-story Pioneer Square loft a year ago, despite the fact that his wife sometimes needs earplugs to sleep. He knew that if the aging viaduct ever were to come down, his concrete view would be transformed into one of the city's most stunning.

MacPherson is one of many property owners who could profit handsomely from the city's desire to open up Seattle's waterfront by burying the viaduct in a tunnel.

A review of about 100 adjacent properties shows a diverse mix of owners who would benefit after years of massive disruption. The group includes smaller real estate investors, architects, a family who got its entrepreneurial start selling sundries at the Pike Place Market, a hygiene center for the homeless and rent-controlled low-income housing.

That list also includes more prominent names: Starbucks Corp., Ivar's and several downtown builders such as Nitze-Stagen, Triad Development and Greg Smith, whose family is far and away the largest private property holder.

But the most sought-after waterfront development site -- a huge parking lot between Seneca and Spring streets -- is owned by a 96-year-old Spokane heiress who so far has demonstrated zero interest in selling it to anyone.

Last week, the city projected that downtown property values would increase by $400 million to $600 million if the viaduct comes down. The big increase -- as much as 25 percent for some properties -- reflects the fact that land next to a roaring highway hasn't historically been the city's most desirable.

Hoping to close a roughly $1 billion gap between the cost of building another elevated highway and a more expensive tunnel, Mayor Greg Nickels is considering a special assessment on property owners who would benefit from better views, more parks and less noise, vibration and pollution. That could yield up to $250 million for the tunnel project, city officials have estimated.

The city did not analyze replacing the viaduct with a regular street and increased transit, which some tout as a cheaper option with similar waterfront benefits. It is not among the official options the state is considering, even though it has generated interest.

An expert review panel will report to the state Sept. 1 on whether it believes there's adequate financing to replace the viaduct. The Seattle City Council is still weighing whether to allow residents to have an advisory vote on the options. A final decision will be made after that input.

"I'm OK for paying my fair share for sure, maybe a little more," said condo owner MacPherson, adding that either way he's happy to have an in-city retreat. "The more something gets closer to reality, the more fun it gets."

But a radical transformation of the corridor, with unbroken walls of shiny Miami Beach-style condo buildings along the waterfront, isn't likely to happen even if the noisy highway is removed, experts say.

The city expects that new land created by the tunnel would remain in public ownership -- as a street, utility corridor or linear waterfront promenade with ice cream stands, rollerblading paths, gardens, art and beaches.

On the waterside, the most dramatic redevelopment is likely to be spearheaded by Washington State Ferries, which plans to overhaul its Colman Dock with a new terminal, shoreline restoration, open space and transit-oriented businesses.

A handful of parking lots on the viaduct's eastern edge would clearly become more attractive for new residential or office buildings.

With many parcels already built out -- and protections afforded by the Pioneer Square Historic District -- fewer than two dozen sites adjacent to the route appear likely candidates for redevelopment today, according to the city's rough guess of what property owners might do.


		Mike Urban / P-I
	Roger MacPherson purchased a loft that's so close to the Alaskan Way Viaduct he can read the license plates of passing vehicles. His logic? It would be a good investment if the viaduct is torn down.

"The idea that somehow there's going to be a lot of rich developers making out like bandits is one of the myths of this whole issue," said David Spiker, an architect who heads the Seattle Design Commission.

"The biggest challenge on the waterfront is that there isn't a lot of land down there."

City planners have envisioned a "land bridge" connecting Pike Place Market to the waterfront with open space and possibly small shops. It would cover a six-block stretch of exposed highway as it climbs into the Battery Street Tunnel.

But with a $100 million price tag, that could be scaled back to a series of pedestrian walkways.

Others have proposed placing a lid over a gulch that would be created west of the sports stadiums as the roadway dips into the tunnel. So far, that idea has gained little traction.

Smith, the largest property holder, owns a massive 8-acre site across from Qwest Field. He is hoping the city will approve zoning changes allowing him to build a complex there of condo towers, office buildings, a baseball-themed park, family-oriented shops and open space.

While a tunnel would boost property values and be enormously positive in the long term, he said, it's unclear how the construction schedule and staging needs for viaduct replacement might affect those plans.

Other owners have put development plans on hold because of the major disruption the corridor faces.

Regardless of what happens on his site, Smith argues that creating a great waterfront is one of the most egalitarian and forward-thinking moves that Seattle could make.

"It will create a true free public space for people to go and experience our waterfront," he said. "You don't have to buy a ticket, you don't have to be able to buy on the waterfront."

Low-income benefit, too

For the custodians, musicians, artists, dishwashers and bartenders who live in the OK Hotel, within spitting distance of the viaduct, opening up the waterfront would greatly enhance their quality of life.

Refurbished after the Nisqually Quake with state tax credits, the studio and one-bedroom apartments there must remain affordable to low-income residents for the next three decades.

Liz Fairbanks, a 31-year-old longshoreman who unloads cargo on Seattle's industrial docks, routinely has to clean from her windowsills the soot that creeps in from car exhaust.

Fairbanks has gotten used to the noise, but admits she's idly fantasized about blowing up the viaduct.

Even though it would improve her view of the Olympic Mountains, she's not in love with the mayor's tunnel. She fears that development pressure from residential projects could eventually wipe out all the jobs at the Port of Seattle's industrial Terminal 46.

"I worry that we'll lose a huge part of what Seattle has been for a view," Fairbanks said.

"I'm for something that creates jobs, is cost effective and is friendly to the environment and I don't think they've come up with a plan for all that."

At the Compass Center, which just refurbished and built transitional housing, a hygiene center and human services headquarters next to the viaduct, Executive Director Rick Friedhoff thinks the viaduct presents a huge Y in the road for the city.

Removing the concrete behemoth, he said, would certainly benefit the formerly homeless residents living there, who would suddenly have a view rivaling that of some of the city's wealthiest residents.

But he worries that gentrification eventually might make the waterfront inhospitable to the Compass Center's clients, though he doesn't see that as an immediate concern.

"I think it would be kind of a mixed blessing," Friedhoff said. "There would be some terrific open spaces that our people could enjoy, and the flip side is there'll probably be some issues around race and class that will probably be challenges. ... But I think it's a great chance for the city."

Developments on hold

Neiso Moscatel, whose father started acquiring properties near the Pike Place Market in the 1940s after opening Continental Furniture, has a hard time seeing how businesses would survive the construction.

Also, most of his tenants -- lawyers, coffee shops, dentists, designers, beauty salons and delis -- are on long-term rental leases, so he couldn't capitalize on increased property values for years.

His company, Allegra Development, has tabled plans to build an apartment building on a prime Western Avenue development site north of the market, which has great views whether the viaduct is replaced or not.

"There would be a very nice project and we're looking forward to doing it," he said. "But if I'm renting units to people and we have all this disruption down there, it'll be at bargain prices. It just doesn't pencil out."

Alex Landes, a documentary filmmaker and interior designer, owns a two-story building that backs up to the viaduct. She'd be willing to help pay for a tunnel as soon as the city offers her money for the time she'd have to sit on her property, which is zoned for an eight-story building.

She does think those residents and property owners who manage to hold on for the next seven to 10 years would benefit if the viaduct goes.

"I think it sounds like it'll be beautiful and quiet with a lot more room for roaming and enjoying the views," she said. "I'll continue to rent this out happily, and when the viaduct project is done, see what the neighborhood is doing."

Given the whims of individual property owners, city officials caution that it's impossible to predict how much the private edges of the waterfront may change -- with or without an elevated highway blocking the way.

The largest parking lot on the waterfront is owned by Myrtle Woldson, a Spokane resident whose father amassed a fortune in railroading, mining and real estate in the early half of the 1900s.

On her full-block parcel at the corner of Alaskan Way South and Seneca Street, people have imagined everything from a leafy city park to a 15-story condo building.

Her real estate consultant, Don Spencer, said he spends a lot of time fielding offers from developers. But the 96-year-old Woldson likes parking lots, and doesn't have any plans to do anything different for now, he said.

"It's very interesting that people have these visions for what they don't own," he said. "It's not in her mind to sell. She's enjoyed owning it and she still does."