Seattle's Zombie Building Phenomenon

With developers on the ropes, stalled construction projects lurk like zombies all around town. What
This stalled construction project on Queen Anne Hill is one of Seattle’s many “zombies”

With its mix of pristine Victorian homes, quaint cafes, and independent shops and restaurants, the small West Galer Street commercial strip on Queen Anne Hill is as pleasant a neighborhood hub as you’re likely to find. At least, it used to be. For months, Galer8, a partially constructed residential development sandwiched between a brick apartment building and a charming pizzeria, has drawn stares and grimaces. The three-story dead zone—eight residences wrapped in a neon orange weather barrier (hiding bright red graffiti) and fronted by a cyclone fence, with a Honey Bucket at the entrance—serves as a sign of tough times and as a magnet for vandals and taggers.

Like scores of local developments, Galer8 is just one of many development ventures in and around Seattle that are either on hold or stand empty awaiting a dicey fate amid a stringent lending climate and the downturn in the housing market. Other buildings have it even worse. Some builders have simply walked away. As a result, from Capitol Hill to Greenwood and everywhere in between, neighborhoods are inheriting ubiquitous eyesores in the form of quarry-like pits and half-finished zombie buildings.

The situation is dire enough that last spring the Seattle Department of Planning and Development—for the first time—conducted an informal survey, identifying nearly two dozen stalled construction projects, mostly mixed-use buildings and townhouses. City inspectors initiated the effort to make sure they were being properly maintained. “Some have postponed work after completion of the shoring and excavation of the site,” says Bryan Stevens, customer service manager, industrial permit liaison and spokesperson for the Department of Planning and Development, “while a select few have stalled during building construction.”

Stevens estimates that the overall construction value of the 22 projects listed in the study is close to $65.8 million. They include the massive 1 Hotel & Residences project in downtown Seattle—which has morphed into a blocklong hole next to the Macy’s parking garage—the site of the historic Denny’s diner in Ballard, the site of the old Leilani Lanes bowling alley on Greenwood Avenue North and Whole Foods in West Seattle. And while eyesores are one thing, the growing uncertainty is putting additional strain on communities everywhere. “Stalled construction proposals mean vacant buildings and excavated sites may remain a little longer,” Stevens says. “It’s not easy for neighborhoods to deal with during this economy, but we can’t make property owners finish their construction proposals.”

Despite the pessimistic outlook, there has been a temporary reprieve. Last summer, the City Council passed an amendment to extend the life of master-use permits for 12 months beyond the initial five-year period. Stevens acknowledges that a lot of time, money and public input go into the permit process. “Extending the permit life was done to give applicants flexibility as they wait for the market to turn, rather than having them start the entire process all over again,” he says. Meanwhile, Stevens points out, some 1,800 projects in and around Seattle were still on track at the time of the survey.

This is hardly comforting to the neighbors, including merchants near Galer8. Caffè Fiorè general manager Katrine Callahan describes the project as a complete eyesore. “We are very happy to have the graffiti covered up,” she says, about the aesthetic benefit of wrapping the entire building in a winterizing wrap. “It would certainly improve the neighborhood to have the project finished.”

Nicole Ryan—who owns Mes Amis, a boutique for pets, a few doors down from Galer8—registers worries of her own. Ryan, who is also a Queen Anne resident and seattlepi.com blogger, voiced concerns that the unattended portable toilet on the site could attract vagrants, so she took it upon herself to call Kelly Byrne of DB2 Seattle LLC, the developer on the Galer8 project, and had him secure it.

Byrne says activity on Galer8 was halted because of financing issues; getting a loan extension is complicated in the current market. “The loan-to-appraisal value is out of whack,” he says. Nonetheless, Byrne is optimistic that activity will soon resume, citing the fact that Frontier Bank, the project’s lender, shelled out about $150,000 to winterize and protect the development. If prospects for Galer8 were dim, DB2 would most likely not have gotten additional funding for winterization work. “This is a good sign of progress,” agrees Windermere Realtor Kimberly Hobbs, the agent on the project.

This zombie-building phenomenon isn’t limited to the urban core. A half-hour ferry ride from downtown Seattle, rustic Bainbridge Island boasts bucolic charm and a lively arts scene. But the southwest side of the island has been rattled by Blossom Hill. The sprawling mixed-use development—which aimed to transform the area near Lynwood Center, an eclectic cluster of shops in a Tudor-styled exterior, into a hip pedestrian village—shut down last summer as a result of the economic crash and real estate banking crisis.

When the project was unveiled in 2006, Blossom Hill developer Bill Nelson planned to build four multifamily and retail structures on Lynwood Center Road, followed by as many as 88 multifamily and single-family homes on a hillside across the street from Lynwood Center. Construction, however, stopped in May 2009, when the bank halted funding. With no money flowing to subcontractors, nearly a dozen liens were filed with the Kitsap County Auditor’s Office against the project within 90 days.

“No one seems to be crying over the fact that some 80 homes may never get built,” Kitsap Sun reporter Rachel Pritchett says, “but the reality is that life on Bainbridge has been disrupted.” Pritchett—who has written extensively on the 16-acre development—notes that the landscape near historic Lynwood Center has morphed into a construction zone with unsightly cyclone fences. “Persons who’ve traditionally gone there for a movie at the old theater or for dinner now must navigate through this zone, and they fear it may stay torn up forever,” she says. “They fear what was once a funky, historic pocket off the beaten path has been ruined.”

Lynwood Center merchants, according to Pritchett, are making the best of a trying situation. “They’re aggressively trying to paint a happy picture. They’ve even banded together to hold some sort of ‘Come to Lynwood Center Festival’ this year,” she notes.

Bainbridge Island resident Liane Ellis, who lives in Pleasant Beach, about three blocks from Blossom Hill, says from the beginning she’s had “mixed feelings” about the development. On one hand, she was excited that new shops and bistros were coming to the neighborhood—which meant she wouldn’t have to schlep four miles to neighboring Winslow. On the other hand, she’s not a proponent of having an overload of housing units compromise the rural aesthetic. “Now it’s kind of an eyesore,” she says, “sitting, rotting in front of our eyes.”

Arnie Sturham—a longtime resident of Bainbridge—owns the Treehouse Café, a popular hub for locals, just a stone’s throw from Blossom Hill. He feels fortunate that thus far his business has not suffered as a result of the problems nearby. “Four or five years ago, the idea [of Blossom Hill] looked brilliant when the market was booming,” he says. And from a business standpoint, Sturham was thrilled at the possibility of expanding his customer base. But now, with several acres cleared and four vacant buildings, there is growing uncertainty as to what will become of the “big albatross across the street,” he says.

In the meantime, Sturham is well acquainted with Nelson, the developer. “Nelson made a lot of effort and put a lot of thought into enhancing the island,” Sturham says, and he’s hopeful the project will be completed, adding, “Now that it’s there, I would like to see it move forward.”

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