It’s the big economic-development wins — and losses — that generate the headlines and set the conversational pot to boiling. Russell Investments goes to Seattle. So does Weyerhaeuser. Boeing goes to Chicago. Amazon goes … somewhere.
Those high-profile moves, whether it’s a headquarters or a huge manufacturing plant (Tesla in Nevada, Airbus in Alabama), earn those headlines because of the number of jobs and the millions, if not billions, of dollars involved. The impacts are readily observable and understandable.
But a lot of what drives economic development occurs without the headlines and fanfare. The smaller deals and announcements (sometimes there’s no announcement at all) don’t generate a lot of attention because the numbers individually are small. But in the aggregate, especially if the net effect is tilted decidedly toward victories or losses, they determine a community’s long-term economic performance.
To see how this plays out, let’s consider some recent developments in one town that has long wrestled with how to push the economic-development momentum toward the victory side of the ledger — Federal Way.
▪ The Sears store at The Commons in Federal Way is closing. Nothing about that is stunning. Sears has long been a troubled retailer; the Federal Way store is one of four in Washington closing in this round and one of 39 nationally. Last year, according to press accounts, it announced 250 locations would shut.
Locally, the question is what happens to the space in a mall that has also long struggled with not just the problems of chain retailing generally but its role in the local retailing landscape, being something more than a strip mall but not quite a super-regional mall like Southcenter.
The mall’s management isn’t commenting on what might be done with the Sears space, or with the mall generally, but some interesting ideas come up when perusing the website of Merlone Geier Partners, which owns The Commons and other properties in Washington.
“We have typically invested in neighborhood and community shopping centers in need of lease-up and/or repositioning or redevelopment,” the company says. “In some cases we have acquired non-dominant, functionally obsolete regional malls in need of redevelopment as well as surplus real estate being disposed of by retailers. We have added value in a variety of ways, including lease-up of vacant space, renegotiation and extension of existing tenant leases, re-merchandising, upgrading design and layout and/or physical redevelopment. In some cases we have increased density and maximized long-term value through the addition of residential and other land uses.”
This is going on all across the country. The United States is over-malled, and if there’s not enough room for all those properties, the options are to let them wither away or do something else with them. That could be as basic as pulling in a different retail-tenant mix. The Commons already has tenants like Target and Dick’s that, until recently, weren’t thought of as the sort of stores that would go into an enclosed mall. It could mean different types of tenants. Instead of just retailers, malls are adding entertainment venues, more elaborate food options, even health-care facilities.
Mall owners are also looking at extensively remodeling their properties into something much different than the conventional design of a long corridor lined by smaller shops, with anchor department stores at either end. That could mean something as basic as opening it up or raising the ceiling, or something as radical as adding offices, residential space or a hotel on top or on the same property.
Whatever the approach, a successful re-invigoration of the mall would mean more jobs and more tax revenue to the city. While people might not think of remaking a mall as an economic development project, those benefits certainly look like economic victories.
▪ In his State of the City address, Federal Way Mayor Jim Ferrell cited several wins the town has had of late — DaVita’s plan to move offices from Tacoma to a new 400,000-square-foot building, bringing with it hundreds of jobs; Diagnos-Techs, a saliva-testing health-care company, opening a facility expected to bring with it 100 scientists, possibly expanding to 165; London Aviation Underwriters, moving from Seattle; and Cogent Communications’ new data center.
Those gains will help partially offset the losses the city has endured from the downsizing, and then the move out of town, by Weyerhaeuser. In several cases, the new tenants are directly backfilling the vacuum left by Weyerhaeuser, since DaVita has already set up shop on the north end of the property east of I-5 while Diagnos-Tech is going into a former Weyerhaeuser building in the West Campus area.
Of course there’s still the matter of the huge and architecturally stunning but unwieldy headquarters building that continues to sit vacant. And Federal Way, like every other town in the metro area, will suffer departures and setbacks, some of note, others that spark little notice beyond those immediately affected.
For all the excitement over the megaprojects, there are some intriguing if unheralded experiments going on with whether you can generate economic-development activity by remaking not just a building but an entire commercial area. We’ll be able to see the results of those experiments, because Federal Way is a prime laboratory for them.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.