‘The Deal’

Port Blakely, King County, big banks, and the City of Issaquah keep their nerve with crucial land swap laid out on the bargaining table.

The history of the Issaquah Highlands is one of amendments, compromises, deal-making and evolution. There is a lot of history in the Highlands, a complex backstory involving not only private interests but also a collage of government agencies – each looking to further their own interests in a parcel of land connected to a web of goals in the region. Now, the wheeling and dealing over land and privileges in the Highlands has the potential to pay off in a big way for the City of Issaquah, as they pursue their long stated goal of preserving the 101 acre parcel bordering Tiger Mountain State Forest known as Park Pointe. How this opportunity arose dates back more than a decade. Part one of this two part series explores the origins of what has become known as the Park Pointe TDR.

In the late 1990s, the Washington State Department of Transportation (WSDOT) built a stormwater infiltration pond beneath the new interchange connecting Interstate 90 with the new development just beginning to find its feet in the Issaquah Highlands. WSDOT needed to mitigate some of the expected impact of more paved surface in the Highlands, and the new interchange. The problem was, WSDOT didn’t do a very good job of digging a hole, and by 2004 it was obvious their retention pond was leaky.

So began the deal-making. Searching for a solution to the stormwater mitigation problem, WSDOT asked Port Blakely if they could build a new retention pond during construction in the Highlands. Port Blakely said they could, but the question was asked, “what would they get in return?”

The answer was a big chunk of land, 78 acres, which WSDOT had no use for. Situated to the south of Port Blakely’s domain, the land was in unincorporated King County, and had a rural zoning that was not much good to a developer seeking to maximize density and profits. They took the land, but it would be number of years before a profitable plan for it would be realized.

It is that plan which is now being revealed to the people of Issaquah and residents of the Highlands. If it plays out as Port Blakely and the city hope, it could be a win/win — for the developer hoping to bring more people and businesses to the Highlands and give the local economy a kick start, and for a city pursuing its goal of securing open space as park land.

The deal, a Transfer of Development Rights agreement (TDR) boils down like this. King County has offered to move the 78 acre parcel into the Urban Growth Area (UGA), and rezone 35 of the 78 acres from rural to urban. This makes that section of the land actually worth something to a developer seeking to build a mixed use community. The remaining 43 acres will be dedicated open space or park.

As a gift of thanks from WSDOT, Port Blakely is free to sell the land or develop it themselves. But they have their sights on other goals.

In the TDR plan, Port Blakely would give the 35 acres to the City of Issaquah, who would then sell it. The approximately $9 million they would earn from the parcel would enable the city to buy 101 acres at Park Pointe on the northwestern slopes of Tiger Mountain, a parcel of land with a troubled history, the preservation of which has been a goal of the city for years.

According to Keith Niven, the point man for the City of Issaquah’s Major Development Review Team, Park Pointe is on the table for $6 million. Just one year ago, owner Wellington Park Pointe LLC told the city it would need $18 million to wrap up Park Pointe.

“We have a verbal agreement with the bank that $6 million is a reasonable price,” Niven told The Reporter. “But they want it done by March. I am assuming they have pressures of their own, from the FDIC (Federal Deposit Insurance Corporation), from investors.”

The remaining $3 million would enable the City of Issaquah to mitigate some of the impacts of the development of the 35 acres — provide stormwater retention facilities, provide infrastructure, encourage low impact development.

In exchange for their $9 million worth of generosity, Port Blakely would be granted permission to build an additional 500 units in the Highlands.

While these are key points of the deal, there are a number of associated give and take items on the table, most notably changes to current signage and parking codes to encourage business activity, the return of Port Blakely’s $1 million contribution to the SE bypass that was never built, a $500,000 investment from the developer to local transit and transportation initiatives, and a mountain bike skills course along the eastern boundary of Central Park.

It is a deal with many moving pieces, making it a fragile arrangement until the very moment it is signed. But confidence is high at the city they can pull off what would be a coup for open space conservation in the region.

“Nobody is expecting we won’t be able to make this happen,” Niven said of the deal which would see the city leverage 78 acres into 144 of preserved open space. “Park Pointe has been a goal of the city for some time now. The option is either to do it with public money or a developer’s money.”

There are, in fact, other large tracts of land the city could buy with its $6 million in order to fulfill its goal of securing environmentally significant lands as park space. The “back ups” should Park Pointe fall through include a property on Cougar Mountain known as The Precipice, which the Issaquah Alps Trails Club has been advocating to have preserved since 2001. But Park Pointe is the jewel of the city’s eye right now.

One of the most volatile moving parts is whether the city can indeed sell its gift of 35 acres, which has been divided into three parcels with a total allowance of 410 residential units, and make the $9 million needs. It is a time when land and development deals are notoriously hard to bank on — Park Pointe itself is evidence of that. But according to Niven, the interest is there.

At a TDR deal open house meeting at Blakely Hall last Thursday, Niven said the city was currently negotiating with “an educational or religious institution,” which is close to buying the largest of the three parcels, about 20 acres. He would not elaborate, adding “if I were to be any more specific it wouldn’t take a rocket scientist to figure out who it was.”

The TDR deal is being supported by a range of groups, from the Mountains to Sound Greenway to the county itself, which hopes to see TDRs used to encourage density in already developed areas and prevent suburban and commercial sprawl.

But not everyone is so pleased. A number of Highlands residents are objecting to what the city’s desire to preserve Park Pointe will do to their community.

Continued next week…