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Developing in SODO? That Depends on Whom You Ask

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Seattle, Urban Visions, American Life, Manufacturing Industrial Council, Siemens, CREW Seattle & Sound, SODO, South Lake Union
Image courtesy of Wikipedia

By Jack Stubbs

“I look at SODO as this massive canvas where we can have it all: a housing-friendly district with housing, offices, industrial use, places for the homeless and for the arts. In a city that is super creative, we constantly are transforming industries. We as a city and a region should be able to do something that is an example for the rest of the world,” said Greg Smith, CEO of Urban Visions, at a recent event held about the future of SODO.

SODO, a traditionally industrial neighborhood anchored by the Port of Seattle and just south of Pioneer Square, is an area that according to some holds the key to relieving pressure as issues facing Seattle as a whole—namely homelessness, transportation infrastructure and affordable housing—continue to mount.

These changes mean that SODO is now very much on the radar. With all of the growth, job creation, residential and commercial redevelopment and densification occurring throughout Seattle, community members, developers and neighborhoods alike are looking at the potential redevelopment opportunities in the area.

At an event held on Thursday, April 12th and hosted by CREW Seattle & Sound, “Is SODO the Next South Lake Union? Is There Major Opportunity Sitting to The South?” four panel members—Greg Smith, CEO of Urban Visions; Henry Liebman, CEO of American Life; Dave Gering, executive director of Manufacturing Industrial Council; and Robb Andrade, Seattle branch manager at Siemens—discussed potential redevelopment opportunities in SODO, how the current industrial zoning regulations in place are impacting the neighborhood, and what lies ahead for the neighborhood and Seattle at large.

Kicking off the event, the panelists discussed the current state of SODO, and how the extensive growth occurring in downtown Seattle means that changes are afoot for this neighborhood, as well. According to Smith, the fact that the Seattle’s downtown core is, in development terms, fully maxed out means that growth will inevitably begin to occur further south. “The city is a zoning island, from South Lake Union to Safeco Field. That zoning island is basically full; developable land is almost gone. Our growth has to go somewhere: it’s not going to go north into Fremont or east into Capitol Hill. The only place that I can see growth going is south,” he said, also emphasizing that he thinks SODO has the capacity to accommodate future development. “SODO is 600 acres: you could fit most of downtown and a chunk of SLU in SODO,” he said.

According to Smith, the three major issues facing Seattle—homelessness, housing affordability and transportation—were exacerbated by the fact that major growth occurred in South Lake Union, but the public transportation infrastructure wasn’t in place to support the expansive growth and development. There is a light rail station in SODO at 4th Ave. S. and Lander St., a factor that serves to connect SODO with Seattle to the north.

However, one of the broader points currently under contention in SODO—which impacts the degree to which the area can be viewed as a viable location for new development—is how much of the land is actually available. While SODO as a whole is comprised of about 600 acres, not all of that inventory is available as developable land, since much of it is currently being utilized for industrial uses and railroad activity, according to Gering. “Of the 600 acres in SODO, about 120 acres are owned by the Burlington Northern Santa Fe [Railway]; it’s not vacant, it’s in use as heavy gauge railroad activity. The Port of Seattle owns around 200 acres in SODO,” he said. “This [property] doesn’t look the way we’re used to seeing real estate look, but it is in healthy, active use, and there’s nowhere else for the rail system to go. The vacancy rate in SODO is almost nonexistent.”

One school of thought is that industrial-oriented companies in SODO are there to stay, and that redevelopment opportunities are few and far between due to the actively-occurring uses there. The other viewpoint is that, as things stand, the remaining 300 acres in SODO are severely underutilized, and need to be adaptively reused to catch up with the times, according to Liebman of American Life, one of the largest landowners in SODO. “We’re really talking about roughly 300-odd acres, which are horribly under-utilized, because they were built in the 20s for traditional industries that have [since] moved out, like Pacific Salmon Foundation…there are lots of interesting uses, like industrial, beer, wine and distillery manufacturers. But there’s a greater future for the area than that,” Liebman said.

Because of the extensive growth that continues to occur in Seattle—and the desirability of the city in the eyes of many large-scale companies—it is even more imperative to look at whether the existing uses in SODO can be repurposed. SODO need not be viewed merely as a hub for industrial uses, according to Liebman. “Seattle is still attractive to many companies. Any company doing business regionally has to have a presence in Seattle, and SODO is the last place where you can build…it has the best infrastructure the city still has to offer, with freeway on either side and a light rail down the middle,” he said. “It’s ripe for a variety of uses including research and development, software development, and companies like Oculus. We have the largest developable area in the city that today is on hold. That doesn’t do the region or city any good.”

More broadly, one of the factors impacting whether areas like SODO can be developed at all, in the future, is an initiative that was based by Washington State nearly three decades ago. In 1990, the Washington Legislature enacted the Growth Management Act (GMA) to guide planning for growth and development in Washington State: GMA requires local governments in fast-growing and densely-populated counties—like King County—to develop and adopt comprehensive growth management plans. The state legislature enacted the GMA in order to redirect and control future growth in already-developed areas and to get cities and counties to think more proactively about how to handle this growth. According to the city of Seattle’s web site, the goals of the GMA are to reduce urban sprawl, encourage future development to occur in areas where public facilities and services already exist, maintain transportation and protect property rights and the natural environment.

According to Gering, one of the major successes of the GMA was the survival of in-town urban, heavy industrial real estate in SODO—but the area does not currently have the infrastructure to support new development opportunities there. “Right now, the city doesn’t have the infrastructure in SODO to support the existing work that’s taking place there; enormous clean-up would have to take place before you could consider having [residential properties] down there,” he said, also highlighting the significant crime rates and homelessness issues still currently facing SODO.

However, even though SODO has traditionally been thought of as a hub for industrial uses, the area still might be able to support a wider variety of tenants. Given the increasingly pressing issue of housing affordability in Seattle and the greater region, the consideration of neighborhoods like SODO as redevelopment areas is paramount—and expansion into areas like SODO is a logical and inevitable progression of where things currently stand, according to Smith. “More than ever, industrial is becoming more of a grey area. I don’t buy the idea that SODO can’t be developed or inclusive. SODO has car dealerships, marijuana shops, tech companies, residents down there already, office space, Starbucks, and a light rail station at 4th and Lander,” he said. “If you care about the housing crisis in the area and affordable housing, we [can’t have] sprawl. If we could turn this area off from growth, then we wouldn’t have any problems. But the reality is, the world and intellectual capital is coming here in a major way.”

Looking forward at the future of SODO in particular and the region in general, future development opportunities will be significantly impacted by the ability of industrial property owners and commercial and residential developers to reach a compromise—both geographically and on principle, according to Andrade. “SODO isn’t an island. For the first time, we have an area that is relatively geographically advantaged compared to the rest of the city, and there’s enough space down there [for development],” he said. “The industrial job growth base is growing and healthy, but we have to figure out a way to cohabitate. Industry will have to live side by side with real development.”

From a zoning perspective, as an industrial hub, SODO is restricted in terms of the commercial and residential development that can be placed there. And this fact might have significant impacts on the subsequent affordability of housing throughout the city in five to ten years time. According to Liebman, there are certain structural issues with the city’s planning and permitting process that make residential development—in SODO and elsewhere throughout the city—a challenge. “The only way to have affordable housing is to build more of it, but there are impediments to building more in Seattle; permitting takes more than two years, which could be streamlined. Housing Affordability and Livability Act (HALA) was well-intentioned, but the jury is out,” he said. HALA, a policy launched by the city in mid-2017 to address the housing affordability crisis, requires new developments to either include affordable homes or contribute to a city fund for affordable housing.

However, one of the long-standing characteristics of SODO is that it has been long-recognized as an industrial area of the city, with much of the infrastructure heavily ingrained there. SODO is home to Pier 46, the Port of Seattle and the Burlington Northern Santa Fe [Railway], something that Gering doesn’t see changing in the near future. “If you talk to the Port and industrial community, we’re some of the biggest believers in the GMA. You can’t displace these industries; they are vital public services, and there’s nowhere else for these to go,” he said.

Lindsay Wolpa, regional government affairs manager with the Port of Seattle, echoed the sentiment during the question and answer session that the Port is too important of a regional institution to be displaced by new development. “The Port is a public institution, and we’ve existed since 1911. A couple years ago, we started a joint venture with the Port of Tacoma where we managed the cargo facilities here in Seattle and in Tacoma,” she said. “We have one of the deepest-water ports in the country and the fourth largest port in the U.S,. and there’s important cargo activity happening that serves residents and local businesses throughout Seattle.”

However, in the longer term, the major issues facing Seattle as a city might become so acute that looking at new redevelopment opportunities—even in traditionally industrial areas like SODO—becomes a necessity, according to Smith. “I think what’s going to happen—whether it’s this administration and City Council or the next—is that people are going to get fed up with the cost of housing, traffic, homelessness, and the pendulum is going to swing to the centrist point of view,” he said. “They’re going to look at SODO as a relief valve for smart green development that can use public transit.”

At the end of the day, zoning restrictions that discourage residential development in SODO will do nothing to mitigate the issue of housing affordability in the city, according to Liebman—challenges around transportation and traffic, also, will continue to play a role. “If the zoning doesn’t change, pretty much what you see is what you get. Yes, there are other places to put housing. But the advantage SODO has is that it’s successfully located and already has the transportation infrastructure, which will help limit traffic,” he said. “As far as other uses, with residential even though politically it’s off the table, if you ask me what should be, there should be housing.”