Paul Allen Moves to Yesler

Vulcan's deal to develop Yesler Terrace echoes South Lake Union's messy makeover.

Hang on to your hats—there's a new Allentown on the way. The Seattle Housing Authority last week voted to enter a partnership with Vulcan Real Estate to redevelop Yesler Terrace. Yep, Vulcan is the Paul Allen company that's turned once-sleepy South Lake Union into a bastion of high-rises and sprawling corporate campuses, igniting neighborhood ire along the way.

Now Vulcan may be poised to do something similar to Yesler Terrace. It's a redevelopment project on a whole different scale than previous SHA transformations at NewHolly, Rainier Vista, and High Point.

"SHA and Vulcan are going to be under tremendous local and federal pressure to make it work," says Ron Sims, the onetime King County executive and former deputy secretary of the federal Department of Housing and Urban Development. "If it does, it will drastically change existing federal housing policy." Sims, e-mailing Seattle Weekly from abroad, did not elaborate. But presumably he's indicating that the feds may follow the Yesler Terrace model.

At previous SHA projects, which turned public housing complexes into mixed-income developments, SHA used private builders to create housing targeted for the middle class. But at Yesler Terrace, SHA isn't just building the kind of "new urbanist cottages," as architect and mayoral candidate Peter Steinbrueck calls them, that went up at places like NewHolly. It's erecting high-rises and office towers.

Or rather, SHA is inviting private developers to do so. The plan approved by the city council in September calls for the organization to sell pieces of its 30-acre campus to developers, who will create apartments and condo buildings as tall as 240 feet and office towers as tall as 300 feet, according to SHA project manager Anne Fiske Zuniga. The density and commercial development seemed fitting for this spot because of its proximity to downtown, she explains.

Zuniga adds that a First Hill streetcar now under construction will help get people to jobs—a streetcar, incidentally, that quite possibly will eventually link up with the S.L.U.T., the unfortunately named South Lake Union streetcar. So the city may helpfully link Allentown I with Allentown II.

Will Yesler Terrace eventually look like South Lake Union? Talks with Vulcan are in very early stages, SHA officials stress. Indeed, Zuniga says she doesn't even know exactly what Vulcan's role will be, or whether the real-estate company will itself be building the private-market units. Officially, Vulcan—along with a nonprofit adviser called Capitol Hill Housing—has won the title of "master development partner," and the details of the partnership are still being worked out.

Vulcan, in many ways, is a natural fit for the project, considering the transformation it's been able to pull off in South Lake Union. But Allen's company, given its powerful owner and influence with the powers that be, also tends to draw suspicion. "Inside track? . . . Friends at City Hall?" Steinbrueck mused last week after hearing the news about Yesler Terrace.

"Our office had no contact with SHA or Vulcan on this issue," responds Aaron Pickus, spokesman for Mayor Mike McGinn.

Steinbrueck, who has represented neighbors fighting Vulcan's plans in South Lake Union, says he was just speculating. Still, he raises other concerns. Will low-income residents blend harmoniously with the upper-echelon occupants of "luxury" high-rises? Who will be looking out for the public interest? Given the experimental nature of this project and Vulcan's dominance in Allentown I, these are good questions.

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