University Place Town Center showing a stronger heartbeat

After a decade of struggles, the city’s vision moves closer to fruition

Staff writerApril 13, 2014 

Six months ago Helen and Don McDaniel had a view of the north Oregon countryside. They’ve since traded their lush Astoria landscape and single-family home for an apartment about 150 miles to the north.

Today the couple have a view of the long-awaited development of the 18-acre property known as University Place Town Center.

The city of UP bet its reputation, its future and millions of dollars on what officials hoped would bring a downtown vibe to the sprawling suburb of 31,000 people. Then came a decade’s worth of false starts, setbacks, name changes and a revolving door of developers.

Now residents new and old might be witnessing the tipping point between a promise made and a dream realized.

The McDaniels, both in their 70s, were happy to leave behind the responsibility of homeownership. For Helen McDaniel, the move to a walkable urban core means regaining the independence she lost when she stopped driving.

There’s not much to walk to yet, but a Whole Foods Market is being built, with plans for retail shops, restaurants and maybe even a movie theater.

The best part so far of living at the mixed-use city center on Bridgeport Way?

“I make my friends jealous,” Helen McDaniel teased. “I say I can walk to the library in my house slippers.”

The city assumed more than $40 million in debt to launch the Town Center project, buying land and building streets, sidewalks, a public parking garage, a civic building and a local branch of the Pierce County Library.

The McDaniels live in a first-floor unit at the Clearview 100 Apartments, the project’s first private development. The 100-unit complex opened in September and is approximately 45 percent full.

Construction is underway on a second apartment complex, Latitude 47, which will add 157 units to the top of a three-story underground parking garage.

At the end of March, construction began on Whole Foods — the site’s first anchor tenant.

City officials believe securing the first Whole Foods in Pierce County will give the larger project momentum after more than a decade on the drawing board.

The city also has put its faith in Seattle-based developer Verus Partners, which contracted with the city to build out the majority of the site in the next three years.

And then there’s the rebranding. What was once envisioned as Town Center is now called the Village at Chambers Bay. It’s a nod to the local body of water and the renowned golf course that will host the 2015 U.S. Open.

Although the vision is only just materializing, the McDaniels had no problem moving in before the project was finished. They’ve heard about the struggles from their daughter, City Councilwoman Caroline Belleci, and they know UP residents have questioned whether the site will ever fulfill its promise.

They say they’re excited. They watch the Whole Foods work from their apartment and regularly visit the Pierce County Library and Frog n Kiwi Café next door. The barista knows to pour their coffee in mugs, not to-go cups, Helen McDaniel said.

And while they wait for additional private development — a bistro or brew pub would be nice, they say — they’re taking advantage of having much of what they need within walking distance.

“The frosting on the cake is you can walk to the Franciscan Medical Center, and it’s kitty corner to a new dentist,” Helen McDaniel said. “Who else can walk to the doctor or dentist?”

THE ‘WHOLE FOODS EFFECT’

The clichés and promises about what’s coming to Town Center have been made countless times in the decade since the City Council announced its vision to create an urban shopping center.

Considering the history, it’s no surprise city leaders were met with heavy public skepticism when it was announced at the end of 2013 that Whole Foods would be an anchor tenant on the center’s northernmost lot.

City leaders and developer representatives from Verus say they’re not wasting time on skeptics.

“To anchor this thing with a destination-based retailer and create really a city center, it validates University Place as a great place for other retail,” City Manager Steve Sugg said.

Retailers are looking at the city in a new light, he said.

City staff and council members have talked about the “Whole Foods effect” — the idea that once a Whole Foods is built, the surrounding market will be flooded with retailers looking to locate nearby.

Nick Clark, director of real estate for Cushman and Wakefield Commerce Real Estate Solutions in Salt Lake City, said there’s some truth to the theory.

“I don’t know if (Whole Foods) can be classified as an impetus to start bringing tenants to an area,” said Clark, whose company also has a Seattle office. “I think what they do is shine a light on the area.”

He has not worked with Whole Foods but has watched a handful go into the Salt Lake City area. While he’s heard of businesses following Whole Foods — including boutiques that draw from the same income bracket — he said it doesn’t guarantee development. A Whole Foods was built in a historic shopping center in Salt Lake City, and tenants never followed, he said.

University Place leaders hope the Whole Foods effect happens in UP. And they say they’re confident Verus, a real estate development and investment firm based in Seattle and Arizona, will finally deliver on the Town Center vision.

The city’s relationship with Verus is different from previous failed deals in which the city relinquished control of the site and was subject to the whim of the developer. Verus has agreed to identify and negotiate with retailers and present potential tenants to the city. The City Council must vote to sell any land parcels.

The city also created deadlines and financial incentives to encourage Verus to finish developing the site in three years.

City attorney Steve Victor said the goal is to make sure property doesn’t “hang along for years with no activity.”

Another part of the project that’s different from similar urban shopping centers, including nearby Uptown Gig Harbor, is the residential component.

“You have a captive audience,” said apartment developer Kevin Berg. “It creates a neat environment to live and work.”

Berg and his brother Steve were the first private developers to invest in the site. Their company, SEB Inc., committed to building a pair of mixed-use apartment complexes as book ends to the library branch.

The Bergs don’t usually mix retail with residential, but the city wanted a place where people could live, work and shop, and the Bergs liked the idea of creating an urban community within a suburban city.

So far only one tenant — Jersey Mike’s Subs — has moved into the space in the Clearview building. The Bergs say they aren’t in a rush to fill the rest of the 33,000 total square feet in retail space under their apartments.

“If we do this right and take our time, we’ll create something that’s going to be viable and be there for a long time,” Kevin Berg said.

The only other private business on site is the Frog n Kiwi Cafe next to the library. Owners Marc and Kelly Grau visited the site in 2010 and opened two years later. They knew it was a risk, but they saw promise.

It was slow going at first, with customers mostly generated by word of mouth. Recently, foot traffic from the library and the apartments has brought in more business.

“We’re starting to turn heads on Bridgeport,” Marc Grau said.

THE VILLAGE AT CHAMBERS BAY

When Verus joined the Town Center project, one of the first things it did was change the name to the Village at Chambers Bay.

The city still refers to it as Town Center on the site plan, but signs directing people to the center will use the new name.

Verus is under contract with the city to develop 150,000 square feet of retail on 9.5 acres. It can also add 150 residential units, but it expects that to be one of the last components of the project.

Robert Andrews, managing partner at Verus, said he isn’t ready to name names, but he believes at least one or two other retailers will be in place by the time Whole Foods opens in March 2015. He hopes to break ground in the next six to eight months on at least one more building.

“Our view of the village is it needs to have an entertainment component, it needs to have restaurants, it needs to have boutiques — local, regional and national,” Andrews said. “We want to develop a product that is not currently represented in the market.”

Verus has a running list of tenants interested in the site. Most wouldn’t have come without Whole Foods, Andrews said.

He said he’s talking to “a number” of theaters about building a multiplex movie theater on site, and is in talks with regional hospitals and health care providers about a branch clinic or urgent-care facility.

He estimated that the site, fully developed, could bring an additional 500 jobs to the area.

In recent weeks at least three businesses have contacted UP with interest in the 1.3-acre site the city controls on the western side of Bridgeport Way West, directly across the street from the site’s central gathering place, according to Victor, the city attorney.

SKEPTICISM GIVES WAY TO HOPE

News like this is a welcome change for those who have watched minimal activity at the 18-acre site for the better part of a decade.

Original plans called for the sale of land to a developer and subsequent sales tax revenues to repay the debt, but that all changed when the recession hit. At the end of 2012, the city had to refinance its debt to avoid paying a $12.4 million balloon payment it couldn’t afford.

Leading up to 2012, the project had become a black eye for the City Council. It prompted contested races during the 2009 election, landing four new members on the council for the first time in the city’s then-15-year history. Complaints about Town Center carried into the 2013 election.

Rose Ehart was one of the more outspoken critics during the recession. She ran for City Council in 2007, losing to then-Mayor Gerald Gehring by a handful of votes. She ran again in 2009 against now-Mayor Denise McCluskey.

Ehart credits the recent progress in part to new faces on council and a change in city administration.

“I see things coming together which were part of the original vision they had,” she said. “They weren’t wrong about having the vision; they just weren’t able to make it happen.”

Linda Bird, who helped lead UP’s cityhood campaign and served on the City Council for 15 years, was one of the last council members to sign on to the Town Center concept.

“I just kept saying ‘what’s the difference between this and a strip mall?’” Bird recalled. “It took a little convincing, but we had to find a way to grow the sales tax base.”

Bird still has “angst” about the debt incurred on the project, but she said the city’s perseverance to get the site ready for development is finally paying off.

It’s a nice position to be in, but UP officials aren’t wasting time celebrating.

“We’ve been in the trenches for so long, and we’re still at it; this is not a completed project,” said Sugg, the city manager. “We like to say here we’re not satisfied until the doors open and the public is able to shop in the shops and dine in the restaurants.”

Brynn Grimley: 253-597-8467
brynn.grimley@thenewstribune.com

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