By Jack Stubbs
“Our feeling is that it’s been a bit quiet on Mercer Island, especially given that cranes are everywhere [else]…we’ve seen a bit of a slowing period… but we think that this project could signal to the development community that this island is ready for further investments in the community,” Mercer Island city manager Julie Underwood said.
On Thursday, August 30th, the city of Mercer Island issued a Request for Qualifications (RFQ) to the development community and is hoping to partner with a private developer to design and build a mixed-use project that will consist of a city-owned condominium project and a commuter parking facility across from the future East Link Light Rail Station scheduled to open in 2023.
The project, which will look to further Mercer Island’s Town Center goals and enhance the city’s existing Town Center, could ultimately comprise a 5-story structure including 100 or more city-owned commuter parking spaces; ground-floor commercial space devoted to restaurant, retail or personal services. The project is targeting LEED Gold certification and could also include pedestrian-oriented pedestrian and plaza space.
The hope is that the project, located at the intersection of Sunset Highway Southeast and 80th Avenue Southeast, will serve as a gateway for the local community, according to Underwood. “We’re very excited to hopefully partner with a really experienced developer that can bring the expertise needed to create a well-integrated, beautifully-designed project that, especially considering its location, can be the gateway to our Town Center and the Light Rail station,” she said.
The city expects that the RFQ will result in it entering an Exclusive Negotiation Agreement (ENA) with the selected development team, at which point the city will work with the developer to implement a feasible development proposal that leverages the existing land. Submissions for the RFQ are due by October 5th, and Underwood thinks that recent signs have been positive.“We’re hoping we have a lot of interest; we’ve had some early interest so far and this is a prime location literally within 90 steps of the future light rail station,” she said.
The East Link Light Rail Station, scheduled to open for service in 2023, is a 14-mile, 10-station undertaking that will further connect the Eastside to the wider Puget Sound region. The $3.7 billion project will allow riders to get from Mercer Island to the University of Washington in 20 minutes; from South Bellevue to Sea-Tac Airport in under one hour; and from the Overlake Transit Center to Bellevue Transit Center in roughly 10 minutes, according to Sound Transit’s web site.
By utilizing public-private partnerships, the city hopes that it will be able to leverage its current land on Sunset Highway with its potential future acquisition of the Tully’s property located at 7810 SE 27th St. that is under contract with the city. In terms of funding for the project, the city will be contributing approximately $2 million towards parking costs through an agreement with Sound Transit, according to the RFQ. The city of Mercer Island is contemplating owning the commuter parking spaces while the developer would own and operate the mixed-use development.
More broadly, the objective is that the transit-oriented project will serve as a focal point for the city of Mercer Island and further connect the city to the wider region, according to Underwood. “I think it’s a pretty unique opportunity, and we definitely believe a partnership with the private sector is the way that we can deliver on our community’s vision for a vibrant Town Center that includes all modes of public transportation,” she said.
The city wants to create a more vibrant Town Center and respond to residents’ desire to see more shopping and dining options in the city’s downtown core. In terms of the recently-issued RFQ, the city hopes that respondents will give particular consideration to community benefit elements including public open spaces; arts and cultural events spaces; and creating a project that will have a positive impact on surrounding residential properties and the city’s downtown core.
The Town Center is the 77-acre business core of Mercer Island, which has a total land area of just over 4,000 acres, according to the RFQ. And the recent development proposal marks the latest chapter for the city: Mercer Island was incorporated in 1960 and Town Center revitalization efforts were initiated in 1993 to create a new urban design vision for city residents, businesses and visitors.
There has been a relative lack of investment and transaction activity on Mercer Island in recent months, although the sales that did occur in third quarter 2017 were relatively sizable. In mid-October 2017, California-based SyRES Properties acquired the 209-unit Hadley Apartments located at 2601 76th Ave SE for $95.75 million, or roughly $458,000 per unit, from Legacy Partners. And in late October, South Carolina-based multifamily developer and owner Greystar acquired the 645-Unit Shorewood Heights Apartments for $209.7 million, or roughly $325,116 per unit, from Olympic-Ida Shorewood Heights LLC. Both the Hadley Apartments and Shorewood Heights are within two miles of the city’s Town Center.
The Town Center mixed-use development project will continue to take shape in the coming months: on November 5th, City Council will consider entering into an exclusive negotiation with a preferred developer and will finalize the agreement in first quarter 2019.
In the meantime, the city envisions that the proposed development will both respect the existing character of Mercer Island and create a new community-oriented focal point, according to Underwood. “I think there’s a natural tendency to feel like these changes are happening way to rapidly, and I think we have seen a bit of a slowing period. But that being said, I also have residents wondering what is happening in the Town Center and whether they’re going to see other projects that complement what’s already there.”
Looking ahead, the officially underway mixed-use will need to strive a balance at a pivotal point in time for the evolving island. “If we’re going to experience changes on our island, [we should] concentrate it in the Town Center core and really respect the other single-family neighborhoods,” Underwood added.