Real Estate Notebook
Developer adding office space at Starbucks HQ
Puget Sound Business Journal (Seattle) - by Todd Bishop
The February earthquake didn't rattle plans to create a large amount of additional office space within the Starbucks Coffee Co. building south of downtown Seattle.
As quake-related repairs to Starbucks Center continue, developer and property owner Nitze-Stagen & Co. is proceeding with plans to convert about 400,000 square feet of warehouse space in the structure into office space, most likely for Starbucks, the building's primary tenant.
The Seattle Department of Design, Construction and Land Use issued a preliminary, conditional approval of the company's master use permit application on May 24, barring any appeal. Although the proposed conversion initially raised concerns about creating more office space in the Sodo industrial district, the DCLU said in its decision that it received no response from the public during a comment period.
As outlined in Nitze-Stagen's application, the project would also include construction of a 533-space, eight-story parking garage on an undeveloped lot just north of the Starbucks Center building.
Starbucks has yet to formally commit to the additional office space, but it will most likely be the ultimate occupant, considering its continued growth and its already substantial presence in the building, said Nitze-Stagen president Kevin Daniels. The timing of the project will depend on Starbucks' need for expansion, Daniels said.
"There's no obligation, but obviously we wouldn't have gone through this whole process if it wasn't for our major tenant," he said. Were Starbucks to occupy the extra space, its presence in the 1.5 million-square-foot building would nearly double, to about 1 million square feet, he said.
Starbucks spokeswoman Cheri Libby said the company has not yet determined when it might need the additional space.
The warehouse space that will be converted is primarily on the building's lower floors and currently used by Olympic West Sportswear, a company that also manufactures clothing in a portion of the building, according to documents on file with the city. The building is at 2401 Utah Ave. S.
The Feb. 28 earthquake damaged the building but didn't slow the conversion plans, Daniels said. If anything, he said, the incident illustrated the need for the project by rendering some of the space in the building temporarily unusable.
Tacoma extension for Opus
Opus Northwest LLC has again been given more time to decide whether to buy the development site for the proposed Pacific Steps project in downtown Tacoma.
Pierce County executive John Ladenburg consented to a 90-day extension of Opus Northwest's option to acquire the property, said Dan Cagle, the county's director of facilities management. The county owns the 1.15-acre site, which is on the west side of Pacific Avenue, between South 13th and South 15th streets.
Opus Northwest's previous extension lasted six months, expiring in late May. The extra time gives the developer until late August to fully commit to the Pacific Steps project by acquiring the site. Bart Brynestad, senior real estate director for Opus Northwest, could not be reached.
The latest extension comes at a time of flux for the project. After encountering lighter-than-expected demand for office space, Opus and its real estate brokers have shifted their focus to the hotel portion of the mixed-use development.
Office tenant Oxbow Capital Partners, a venture capital firm, has significantly reduced the amount of space it plans to lease in the project. The project, which had been renamed the Oxbow Financial & Technology Center, has reverted to the Pacific Steps name as a result of the change.
Opus Northwest is now "exploring the possibility of a hotel," Cagle said. "We're giving them some time to see if they can put something together on that." At the same time, he added, "We're getting a little bit wary of the extensions."
The county's agreement with the developer includes a provision through which Opus could be required pay $10,000 per month for extending its option. The county has yet to require payment, but Cagle said it might do so for further extensions.
2000 good, but no 1998
Some crunching of the numbers supplied to the Business Journal for its latest ranking of the region's architectural firms shows that the profession continued to grow steadily during the economic boom that lasted through much of last year.
The largest 25 firms in the region reported average billings of $14.4 million in their Puget Sound area offices during 2000, according to the data supplied for the list, which was published last week. The average was $13.3 million in 1999.
Still, the increase in 2000 was considerably less than the one witnessed between 1997 and 1998, when reported billings among the top 25 firms rose from an average of $10.5 million to $13.1 million - a one-year jump of nearly 25 percent.
Allen, Milliken move ahead
A recent filing with the city of Seattle by urban grocery developer Don Milliken outlines the project planned by his Milliken Development Corp. and Paul Allen's City Investors Inc. on the Quinton Instruments block in the Denny Triangle area.
As proposed, the development, at 2200 Westlake Ave., would include a 10-story office tower and two 14-story residential towers over a two-story retail base. The project would include 237 residential units, a 48,000-square-foot supermarket, and structured parking for 1,100 vehicles.
That configuration is essentially the same as when Milliken unveiled plans for the development late last year. The filing with the city's Department of Design, Construction and Land Use was made in preparation for an early design-guidance meeting with the Design Review Board. The meeting is scheduled for 5:30 p.m. June 12 in Room 221 of the Municipal Building, 600 Fourth Ave. in Seattle.
Reach Todd Bishop at 206-447-8505 ext. 112 or tbishop@bizjournals.com.
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