By Meghan Hall
In the fall of 2019, Pasadena, Calif.-based Alexandria Real Estate agreed to purchase a critical block from the City of Seattle as part of a joint initiative to bring housing and jobs to an underutilized part of South Lake Union. The collection of properties, known as the Mercer Mega Block, total nearly 3-acres, and now Alexandria is moving forward with its plans for the first portion of the project. Alexandria intends to build two, thirteen-story office towers on the Eastern portion of the project site totaling around 800,000 square feet, according to a phased permit request form submitted to the City in July.
The offices will be designed by local architecture firm NBBJ. Plans indicate that the two towers will be connected by ground floor retail and commercial space, as well as amenities. A pedestrian corridor and public plaza will provide a through block connection to Eighth Ave. N., four levels of below grade parking—totaling some 600 parking spaces—are also included in the plans. Floor plates will range in size from 24,000 square feet to about 35,800 square feet. The West tower has been named “The Hub,” and the East tower will be called “The Exchange.”
As part of its agreement with the City, Alexandria also will work to include a 30,000 square foot community center for the City into the West tower. Once complete, the City will not be required to pay rent for 40 years.
Project documents express that Alexandria is pursuing phased occupancy, and so the project would be built in multiple stages. The current proposal indicates that the West tower with the below grade garage and loading dock would be constructed first, followed by the East tower. The project team’s intent is to finish constructing the West tower, allowing a tenant to move in, while the second tower is constructed. No tenant has yet been named for the property. Shoring and excavation of the site could begin as early as December 2020.
“Our plan for the Mercer Mega Block campus equally focuses on fostering innovation to advance human health and improve the quality of people’s lives and addressing some of the Seattle community’s most critical issues by bringing an outstanding mix of public benefits and retail amenities to the Lake Union area,” said John Cox, senior vice president and regional market director of Alexandria Real Estate Equities, Inc.
Since 2014, the City has been working to come up with a plan on how to best utilize the properties, and in July of 2018, the City issued a formal request for proposals to find a developer who would fulfill officials’ vision for the site and provide public benefits to the community.
“This is a generational opportunity for Seattle,” said Mayor Jenny Durkan in a statement issued at the time of the City’s selection. “Cities our size rarely get the chance to take an underused property we own and make bold investments to create jobs, create more affordable and mixed income housing throughout the city, and build more safe transportation connections. I believe that years from now, people will look back at this chance and say we seized an incredible opportunity to make our City better by reinvesting the proceeds directly in housing across Seattle. I look forward to working with the City Council in the coming weeks to deliver these investments in housing, jobs, great public spaces, and transportation projects across Seattle.”
Alexandria will acquire the properties for $143.5 million. The development of the Mercer Mega Block is expected to bring nearly $300 million in public benefits, including a $5 million contribution that will help Seattle address homelessness, 175 units on on-site affordable housing and transportation improvements. $78 million of the property’s purchase price tag will be allocated to address displacement and further opportunities for transit-oriented development around Seattle, while another $16.7 million will be invested in new and planned transportation projects.
“The South Lake Union neighborhood has been an incubator for inventors, artists, educators, engineers, writers, scientists and countless others (think: Paul Allen, PATH, Fred Hutch, Pearl Jam, Seattle Times, Amazon, Cornish, Seattle Children’s),” said Councilmember Sally Bagshaw in a statement. “Through this transaction we will add hundreds of affordable housing units to this neighborhood– plus public amenities like a long-desired community center. The addition of more homes to this neighborhood, as well as improved connections to Seattle Center and Downtown, will make space for our kids and grandkids to live near where they work. This is urban livability at its finest.”
Alexandria has numerous projects in the works in South Lake Union, including 701 Dexter, a 10-story research building, and 1165 Eastlake Ave. East, a 100,000 square foot office asset. Its Seattle asset base now consists of more than 1.5 million rentable square feet of office and laboratory uses, leased to a diverse array of tenants.