A decade ago, Schnitzer West mostly built and ran office spaces in Bothell and Bellevue. The development company had never focused on the trendy mixed-use/residential market, having only the seafood restaurant Seastar and Starbucks as tenants in one of its downtown Bellevue office buildings.
Kevin Casey
The middling Bravern has thus far proven that Eastsiders are uncomfortable with flaunting wealth.
Kevin Casey
A familiar sight: would-be customers walking by, rather than into, Jimmy Choo.
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As the real-estate boom heated up in the late '90s, high-rise condos sitting atop trendy restaurants were springing up all around Puget Sound. And in 2000, Schnitzer started buying property in Capitol Hill and Belltown to build condominiums.
But Schnitzer didn't make its biggest purchase in Seattle. Rather, it ventured across Lake Washington, snapping up an entire city block across the street from Bellevue City Hall.
On that parcel, the company started to develop a massive office/condo/retail project called The Bravern. Four towers were planned for the site: two smaller structures devoted to office space and two skyscrapers featuring luxurious condos. At the bottom would be a three-story, open-air luxury shopping center.
Everyone on the Eastside was making money at the time. In 2000 the median household income in Bellevue was $62,000, according to the U.S. Census Bureau. (In Seattle it was $45,000.) Schnitzer CEO Dan Ivanoff says his company started conducting focus groups and discovered that nouveau-riche Eastsiders were burnt out on casual clothing retailers. No more sport sandals and khakis—they wanted stores where one could purchase the wardrobe of a Sex and the City star without having to hop a plane for Manhattan.
"It wasn't because we were hell-bent on luxury retail," Ivanoff says. That's just what the Eastside wanted, according to Schnitzer's research. Turns out it wasn't the only developer with big plans for the Eastside: The Bravern is just one of three massive mixed-use developments in downtown Bellevue to open since 2007. Bellevue-based Wasatch Development built two condo towers over 180,000 square feet of retail space a half-mile from The Bravern, which opened in September 2009. And two blocks away, Portland-based developer Gerding Edlen erected two condo buildings, the Bellevue Towers, topping 40 stories each. Altogether the three structures brought 1,366 new condominiums to downtown Bellevue, each towering over pedestrian-friendly plazas peppered with new restaurants and stores.
All three hit the market as the recession took hold. But rather than assume the developments were a mistake, local media hailed the openings as a sign that Bellevue was more capable of resisting the global economic downturn than most any other locality. In February 2009, while Seattle was choked by vacant condos and retail spaces, Seattle Metropolitan ran a cover story titled "The Rise of the Eastside: Look out, Seattle. Bellevue is gaining on you."
It turns out Bellevue didn't really possess that sort of economic Teflon. The recession simply landed there later, and this year the Eastside's economy has shown signs of cracking, with restaurants shuttering and many of those beautiful new condos sitting empty. After watching Seattle's city government fight to stay afloat across the water, Bellevue must now find ways to trim its own budget; tax revenue from real-estate sales has decreased by half since 2006.
That leaves Schnitzer and the future of ultra-luxury living in Bellevue on a precipice. In April, Ivanoff announced that one entire tower of condominiums would be leased as apartments. Meanwhile, the 215-unit condo tower (cheapest home: $320,000) remains literally empty as potential buyers look for loans from nervous banks. The Bravern has also lost high-profile commercial tenants, namely New York celebrity chef Terrance Brennan and his two restaurants.
Poor sales have already killed the investment of Gerding Edlen; the developer is in negotiations to turn the 558-unit Bellevue Towers over to its lenders, according to The Oregonian.
In order for The Bravern to avoid such a fate, all Schnitzer needs to do is sell its first $4.8-million penthouse and convince devoutly casual Northwesterners to start buying thousand-dollar sandals.
Take Exit 13 off I-405 North and you land among an idealized vision of the real-estate boom that commenced a decade ago. The streets are spotless, the sidewalks devoid of panhandlers, and the windows of half a dozen new skyscrapers shine in the sun.
City of Bellevue Office of Economic Development Director Robert Derrick says the seeds for this kind of downtown were sown 30 years ago. In the early 1980s, Bellevue's City Council decided it no longer wanted to be merely a bedroom community for Seattle. They set about creating a downtown economic center, developing parks and encouraging builders to come in.
Walking among the skyscrapers now, it seems that Bellevue has been extremely successful in realizing its mission. Between buildings wafts aromas from dozens of downtown restaurants, not the stench of urine one finds along First Avenue across from Pike Place Market in Seattle.
As a workday closes, an astonishingly diverse group of men and women from all over the world stream out of their offices and make for nearby happy hours. More than 30 percent of Bellevue's population is foreign-born and 32 percent is non-Caucasian, according to the U.S. Census Bureau. In comparison, fewer than 18 percent of Seattleites are immigrants, and about 29 percent of the population is a race other than white. Add Bellevue's nationally recognized public schools, a gorgeous city park covering an entire block in the middle of downtown, and views of the surrounding mountains, and it's easy to see why Money Magazine named Bellevue the fourth best city in the entire United States to call home.
