In the 130 blocks that comprise Vancouver’s downtown core, cautious optimism vies with cautious realism among commercial property developers as they compete for limited tenants and keep a watchful eye on the economy.
Full speed ahead
Perhaps most noticeably, The Al Angelo Co. has moved forward with developing 400 Mill Plain Center, a $17 million to $18 million, 60,000-square-foot office building located between 15th Street and Mill Plain Boulevard at “D” Street.
The lot, where a former Denny’s restaurant was located, was cleared in early August and “D” Street is barricaded. As part of the project, the company purchased a portion of “D” Street from the city for $240,000.
“We’re not concerned about the economy,” said Stacey Sillivan, commercial property manager at The Al Angelo Co., which will occupy the fifth of the project’s five floors.
An anchor tenant is on board and “we have much interest and letters of intent we are sifting through, said Junior Executive Albert Angelo III. “As far as we know, we are the only building actually in the construction phase at this time.”
The project, which Angelo called the “gateway building to downtown Vancouver,” is due to be completed in the third quarter of 2009.
“Our family is proud to deliver another property that reflects the heritage and legacy of this city and the innovative path the downtown corridor is following,” Angelo said.
While The Al Angelo Co. is perhaps the only developer laying brick, there are several other downtown projects on the books.
Killian Pacific remains in the conceptual design phase with its Riverwest project, which will be located at “C” Street south of East Evergreen Boulevard, where the former Carr Chevrolet building is located, said Director of Development Steve Burdick.
The ultimate concept calls for a regional library, office and retail space, residential units and a hotel.
“We’re still trying to make everything work,” Burdick said.
In a work session, the city of Vancouver Design Review Committee reviewed the preliminary design for the library building at Riverwest on Aug. 14.
And Killian Pacific is about three weeks away from final site approval for the 65,650-square-foot Frontier Building, proposed for the corner of Sixth and Broadway streets. However, construction won’t start until a primary tenant is signed, Burdick said.
If approved, the project will take up a half-block, and feature retail on the ground level with three stories of offices and underground parking.
Market concerns
A few blocks away, construction and engineering drawings are about 75 percent complete for The Luxe, what is planned to be a $17 million, 56,000-square-foot mix of commercial and residential condos at 13th and “D” streets, said Elie Kassab, president of Prestige Development. Plans call for retail on the ground, four floors of office condos, and a top-floor penthouse.
Kassab said Prestige could approach the city for permits in the next three to six months but “market conditions are not the best – we may delay that.”
The company is actively looking for a major tenant or buyer and if one is found, “we would start immediately,” Kassab said.
Prestige ceremonially broke ground on the project in November.
Prestige also plans to demolish the former Vancouver Police Department building at 13th and “C” streets to make way for the $25 million Prestige Plaza, a five-story “market rate” apartment building with 80 to 100 units.
The asbestos and lead paint removal process is complete and demolition is scheduled to start soon. Kassab said he hopes to start construction late next year.
Examples of the project’s target market are college students, teachers and Southwest Washington Medical Center and courthouse employees, he said.
Further downtown at Sixth and Columbia streets, Vancouvercenter developer Vandevco is facing pressure to complete the south tower of its residential and commercial project across from Esther Short Park. If the project is not complete by mid-2009, the developer will pay an $800,000 penalty to the city of Vancouver.
The construction of the tower has been delayed several times by concerns about the availability of tenants, but the original plan called for the south tower to have four floors of residential and five floors of office and retail space.
Byron Roselli, vice president of Eric Fuller & Assoc., said the “market has slowed enough” to likely have caused these plans to change. The project may be downsized or exclude residential space, he said.
Representatives of Vandevco did not respond to requests for information.
Eric Holmes, the city’s economic development director, estimated the vacancy rate of the office and retail portion of the north tower at about 20 percent.
City vision
Another lot attracting attention downtown is Block 10, a city-owned block at Eighth and Columbia streets. The Southwest Washington Center for the Arts requested the city grant it a development hold on the block and Holmes said discussions about the proposition have continued. However, he stressed, the hold is not in place yet.
The city has hoped to see a mixed-use project on the site with retail and residential space combined with the arts center, Holmes said.
The city also has plans to relocate its citizen services back downtown in a new city hall within three to five years. Now, city employees are spread among five facilities, including those in the Westfield Vancouver Mall area.
The best possibility for the location of the new city hall is on Esther Short Park, just south of Esther Short Commons, Homes said. This two-story building is situated on 1.8 acres and the city could remodel or expand the building according to its needs.
Lack of absorption
The availability of prospective tenants will control how fast these planned projects will proceed.
Roselli said several downtown buildings have vacancies, including the Bank of America and Columbian buildings, and for new projects to secure financing, a 50 percent prelease is usually required.
“There’s a huge amount of new office space downtown – no one sees an absorption rate to justify all the construction going on,” Roselli said.
But despite this caution, Holmes said the city envisions a thriving, compact environment – what he called an “18-hour destination for all of Vancouver.”
“It’s a long-term process,” Holmes said. “It doesn’t happen overnight. We’re poised to significantly realize our vision for the downtown core.”
THE VANCOUVER CITY CENTER VISION AND SUBAREA PLAN
In June 2007, the city of Vancouver adopted a plan to foster and guide growth and development downtown. The plan, modeled after the highly successful Esther Short Subarea and Redevelopment Plan, lays out land use, zoning, public transit, transportation and parking policies that promote a “messy vitality” – that is, a “dynamic and rich mix of residential, cultural, civic, retail and entertainment places that will attract growth, jobs and around-the-clock activity in the VCCV area.”
Market and planning capacity evaluations were made to estimate the potential for each subarea to contribute to the realization of the vision. These subareas include Uptown Village, Mill Plain Couplet, Westside Government, Central Downtown, Esther Short and Columbia West Renaissance.
City Economic Development Director Eric Holmes enumerated several projects that dovetail with the plan, including Killian Pacific’s Riverwest and Frontier Building, Prestige Development’s The Luxe and Prestige Plaza and Vandevco’s Vancouvercenter.
“All of these offer employment, residential and retail spaces and are consistent with the city’s vision,” Holmes said.
