Reprinted with the permission of Phil Brown, Publisher,from the October 30 edition of the Daily Journal of Commerce and djc.com.
 
 
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October 30, 2000

Madison Street heats up

Gritty stretch of Madison Street will soon shine

By JOE NABBEFELD
Journal Real Estate Editor

Andrew Taylor has watched this soiled stretch of Madison Street languish for 16 years. 

Boutiques and pricey restaurants flooded into Madison Valley a few blocks to the east. Downtown and Capitol Hill boomed to the west. 
 
Taylor
Photo by Joe Nabbefeld 
A major redevelopment of the former Planned Parenthood site is just one of many projects neighborhood activist Andrew Taylor is following. 

But in between, the eight blocks of Madison from 16th to 24th avenues, near which Taylor has lived for those 16 years, remained a gritty gap left to loiterers, a few tiny businesses and daily streams of fancy cars pouring in and out of downtown with their windows rolled up and doors locked. 

Now the stretch is set to take off on a gentrification binge that may be unmatched elsewhere in region, driven by the convergent forces of growth management, traffic congestion, downtown's resurgence, Madison's closeness to downtown and the prolonged economic boom. 

Developers have flocked in like boom-time gold miners to buy up just about every parcel of land. They've drawn plans for condos, grocery stores, office buildings, hundreds of apartments and -- the most incongruous of all -- perhaps even a Trader Joe's specialty market. 

"It's coming," said Taylor, a biochemist who has closely monitored, and influenced, each project as a neighborhood activist. For the past five years he has been chairman of the Miller Park Neighborhood Association. 

Five years from now the eight blocks "will replicate some other stretches like Madison Valley, with the restaurants, bakeries and pastry shops, but with some unique differences that designers will come up with," said Richard Krochalis, director of the city's Department of Design, Construction and Land Use. "You'll know you're driving down Madison just like when you drive down 45th in Wallingford and know you're in Wallingford." 

The rush for Madison sites has sent land prices soaring from a mere $15 per square foot fewer than five years ago to a recent purchase at about $85 per square foot. 

The buy-up precedes visible change, which is expected to hit full force next year. 

Planned Parenthood spawns other projects

The mother of all the Madison projects, the one that will ignite others into action, is redevelopment of the former Planned Parenthood site at 23rd and Madison, now a large old grocery store fronted by a nearly oceanic, broken glass-strewn parking lot. 
 
Views at Madison
At the request of the neighborhood association, the new Hearing, Speech and Deafness Center project, Views at Madison, was changed from all low-income to a mix of low-income and affordable units. 

Developer Tom Lee's plan for a large apartments-above-retail project on this site is rumbling to life, with Lee now auditioning the proposal before Taylor, other neighborhood residents and a city design review board. 

Lee and partners Mike McKernan and Jim Gallaugher want to build some 220 apartments atop nearly 60,000 square feet of retail, including a major grocery store. 

Taylor describes the project as "donut-shaped." The donut's hole would be a courtyard with a few surface parking spaces, pedestrian walkways, storefronts and a ramp into a large underground parking garage. The project, built out to the sidewalk in the contemporary urban style, would rise five stories on the uphill west side and four on the east. 

Taylor and other neighborhood leaders can be a tough sell, yet after meeting recently with Lee, Taylor said they find the design by Seattle-based Mithun Partners quite pleasing. 

Lee told them he's talking to all the well-known grocery operators about which one would go in the project. At the earliest, construction would get underway next summer. 

"This big block is the key," said Taylor. "It will make or break the neighborhood." 

Other developers said that as Lee's project looks more like a reality, they'll grow more willing to start spending on the stretch of Madison, too. 

"It's a snowball effect," said David Zarett, an office and housing developer who has watched the Madison Street derby but not bought in. 

Lee's site became available because last year Planned Parenthood moved one block west on Madison, into a brand-new, four-story building also designed by Mithun. This new Planned Parenthood building replaced a junk yard and some decrepit one-story structures. Planned Parenthood more recently razed an unsightly former pest control building at the intersection of Madison, 20th and Olive Way and is creating a rock sculpture park there. 

At the same intersection, Rhodes, Ragen & Smith, a company that collects and sells historic building materials from China and Europe, recently transformed a brick building in which towed cars were previously stored. The three-story structure is now stylish offices adorned with historic artifacts. 

Now let's take a little tour, starting uphill from the new Planned Parenthood building: 

At 17th on the south side of Madison, the non-profit Hearing Speech and Deafness Center has another major housing project at roughly the same stage of planning as Lee's. 

The center has teamed with Len Brannon's affordable housing development company, Shelter Resources Inc., to create 96 apartments atop 30,000 square feet of new clinical offices for the center, said Ed Freedman, the center's executive director. 

Mithun designed this project too -- prompting Taylor to joke that the neighborhood may have to be renamed the Madison Mithun Miller Neighborhood. Mithun's Roger Miller, part of the team working on Lee's project, also designed the acclaimed Madison Miller Community Center. 

The Hearing Speech and Deafness project is called Views at Madison. Two structures will stand seven stories over underground parking. A canyon-like open area between the structures will be made to resemble a canyon by roughening, and possibly coloring, the concrete walls and placing rocks along the ground to evoke a dry stream bed, said architect Ben Dorris. 

Northwest Architectural Co. designed the interior of the center's space. 

Across Madison from the hearing center, a proposal jumps out as possibly the most dramatic upscaling along this stretch of Madison. A Trader Joe's may go in atop yet more housing on a vacant, polluted former gas station site that car detailing company owner Chester Dorsey bought during the land rush. 

Trader Joe's spokeswoman Pat St. John confirmed that the East Pasadena, Calif., specialty grocery chain is negotiating to be part of a project on the site that would include housing above the store. No deal has been reached, she said. 

Dorsey, who operates a car-detailing outlet at Madison and 23rd, confirmed he recently bought the 17th and Madison site but he wasn't available to provide more details about his proposal, which has entered design review. 

At the crest of the hill on Madison's north side at 16th, the area's first new apartments-atop-retail already is up and, according to its developer, "doing well." 

Developer Val Thomas last year completed the seven-story structure that houses about 26 apartments atop the Central Co-op, operating as Madison Market. 

Thomas, whose previous projects include creating the Broadway Market in Capitol Hill and Pike Lofts in First Hill, has jumped in on this stretch of Madison with both feet. 

Heading back downhill, on Madison's north side at 19th Avenue, investors associated with Thomas recently paid top-dollar for the former Fratelli's ice cream storage building, recognizable by a mural of cows on the building. 

Thomas said he's not among the new owners but is likely to be their developer. The owners haven't decided on the configuration of the project they will propose there, but Thomas said it is almost certain to include a substantial amount of housing over ground-floor retail. 

Taylor said the housing may exceed 200 units. 

"They may decide on something by the end of the year," said Thomas, who, in the meantime, is concentrating on a new condo project a couple of doors away. 

Thomas recently bought two vacant former commercial buildings just north of Madison on 19th Avenue that he plans to replace with more than 40 condominiums. Construction may begin next spring. 

Back on Madison between 19th and 20th, developers bought a run-down house that they propose to replace with a small project of 10 condos atop retail space. 

On Madison between 20th and , Mount Zion Baptist Church last year finished developing nearly a full block into McKinney Manor, 68 publicly subsidized apartments for seniors. 

A new four-story office building is under construction next to McKinney Manor, to house a law firm. 

Now our tour arrives at the stretch's most troubled spot, the corner of 22nd and Madison, occupied by the small Deano's grocery store. Loiterers mill around the corner day and night, with police almost constantly eyeing them. 

Deano's owner Dean Falls, who owns the entire block, has told city officials he wants to redevelop the block into new housing. Action on that has lagged, though, in part because the neighborhood association opposes Falls' request to rezone the property to allow building heights of 85 feet instead of 65. 

At Madison and 22nd, the church named Madison Temple has applied to the city to build an eight-story apartment building atop ground-floor retail on a large vacant lot. Madison Temple is located across Madison from the site, at the tip of the corner of Madison and 23rd. 

Past 23rd, at 2331 E. Madison, a group has applied to build another condominium-retail project. 
 
 

Is it too much new retail?

If a major grocery and Trader Joe's go in, that would suddenly put a lot of grocery shopping in an area that now has almost none -- and a lot of ground-floor retail in general. 

During the economic slump of the early '90s, developers complained that the city had driven them to build retail under housing in some spots where the retail failed for lack of pedestrian traffic. The city created a committee, led by developer Val Thomas, that recommended some changes to city policy to ease this problem, such as increasing the allowable height of the retail ceilings. None of the changes were dramatic, though, so the issue may reappear in the next slump. 

But on this stretch of Madison, the ground-floor retail is largely voluntary. Most of the sites, including the old Planned Parenthood one, are zoned NC-2 or -3, which means developers can increase the amount of housing, and theoretically their amount of profit, if they provide ground-floor retail. Or they can opt to build smaller with no retail, Krochalis said. 

It's up to the developers and grocery companies to determine how many stores the area will be able to support, he said. 

Krochalis bridled at referring to the stretch's sweeping redevelopment as gentrification, calling it "an emotionally laden term that gets people a little anxious. It's used mostly in the negative. This is economic development, classic urban in-fill." 
 
Quick facts

New developments between 1990 and 1998: None 

New developments since 1998: At least eight built or proposed 

Land prices: $15 per square foot five years ago: about $85/sf today 

City's plan: 400 new housing units by 2015 in the Madison Miller neighborhood 

Developers' plan: 600 units already proposed on this stretch of Madison alone

Gentrification implies displacement as some long-time residents are priced out of a gentrified area. Many of the new condos and apartments will be out of reach for average wage earners, but Krochalis said the city seeks to minimize displacement by motivating developers to include some low- and moderate-income apartments in new projects. The city provides a variety of tax breaks and project density increases for those who provide low-income housing. 

This stretch of Madison is on the northern edge of the city's predominantly African-American Central District, and few doubt that this played a role in the lack of investment in the area until now, when the premium of living near downtown has reached a peak. 

Taylor said the neighborhood association looks for ways to minimize displacement. At the same time, the association persuaded the Hearing, Speech and Deafness Center to change Views at Madison from all low-income apartments to a mix of low-income and affordable. Taylor said association members felt it wasn't good planning to concentrate low-income in one project. 

Race comes up during neighborhood planning. Falls and Madison Temple leaders both claim they face opposition to increasing the zoning of their properties because they're black. 

Gentrification is hitting throughout the Central District, such as at 23rd and Jackson Street. 

"I projected that there would be two places in town that would be best to put money in," said developer Scott Nodland of the non-profit Low Income Housing Institute. "One was this corridor of Madison and the other is the Jackson Street corridor from Dearborn to 23rd. It's happening." 

Taylor said he has quickly switched from worrying about too much wealth, not too little, moving in on this stretch of Madison. 

"Enough upscale condos are coming during the next 10 years that I'm worried about stratification between really high-end and really low-end," he said. 


This new DJC feature takes a closeup look at our booming market. Got an area you think is about to take off? Contact Maude Scott at (206) 622-8272 or maude@djc.com


Get Copyright Clearance Copyright 2000 Seattle Daily Journal of Commerce 
Click for permission to reprint. (PRC# 1.4227.11115426) 


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