A Multiuse Project Rises East of Seattle

By: Harriet King, New York Times

ISSAQUAH, Wash. - A multiuse project that includes homes for 6,500 people and 3.5 million square feet of office space is rising on a plateau above this former coal mining and farming community in the Cascade Mountain foothills 17 miles east of Seattle. When completed in seven years, the 2,223 acre development is also to have 500,000 square feet of retail space. A planned $600 million Microsoft campus is to anchor the office and retail complex.

Workmen are applying brick veneer on exteriors of the latest of the 700 residences that will be developed by next summer in a project called Issaquah Highlands. The development is a project of Port Blakely Communities, a subsidiary of Port Blakely Tree Farms, a 137-year-old land and timber company.

The Highlands will eventually contain 2,400 homes and condominiums in diverse architectural styles, priced mostly from $180,000 to $450,000. Forty homes described as "estate style" are to cost about $1 million each. There will also be 850 apartments.

The development will densely cover 30 percent of the land to minimize sprawl and preserve the natural environment. Some 1,400 forested acres, long a playground of hikers and mountain bikers, will remain open space and connect to the Issaquah Alps Trails Club paths on Cougar and Tiger Mountains.

Issaquah is easily reached along Interstate 90 and is the last major city to the east of Seattle before flatlands disappear into mountains. Highlands residents can ski at Snoqualmie Pass, a 30 minute drive up the interstate.

A construction frenzy is engulfing Issaquah as growth creeps outward from Seattle into areas once considered the boondocks. Traffic is heavy around such stores as Office Depot, Tully's Coffee, Trader Joe's and Lowe's hardware, which occupy the site of a former parachute and glider center near Lake Sammamish. A shopping center, anchored by Home Depot and a Fred Meyer department store, has sprung up this year to replace a former sand and gravel company.

In the first week after a 4,000-square-foot Krispy Kreme doughnut shop opened on Oct. 31, it reported sales of $454,125, according to Gerard Centioli, the franchise owner.

Costco is Issaquah's largest employer, with 2,500 workers, headquartered in an office and retail center called Pickering Place, where a barn erected in 1887 and now used as a community center remains as a reminder of the area's agricultural past. Other new employers include the Boeing Company, Siemens Medical Systems and Western Wireless.

The rapid growth in jobs seems to have created strong demand for housing. "Home sales have been much faster than anticipated" at Issaquah Highlands, said Judd Kirk, president of Port Blakely Communities. "Issaquah is a wonderful place to live with a great quality of life because of the natural environment. We appeal to people who want a sense of community and convenience of an urban neighborhood."

Residences offer small low-maintenance yards with front doors just a few feet from sidewalks and narrow tree-lined streets that encourage residents to socialize with neighbors. Mr. Kirk says this is a return to city social patterns of the early part of the last century, but he conceded, "Some people come in and immediately leave because they want a large lot and privacy and don't want to interact with neighbors."

Port Blakely Communities bought the site, forested land that covers 3.47 square miles, in 1990 from a Burlington Northern subsidiary. The property is on the outer edge of King County's urban growth boundary - the limit of urban development - so mountainous land to the east will remain rural. The developer began site work in 1996 on roads, parks and utilities and sold blocks of land to 10 builders who began constructing homes in 1997 and have built 600 so far.

"We welcomed the Issaquah Highlands urban village concept as a way to handle projected growth and the development does not change established neighborhoods," said Issaquah's mayor, Ava Frisinger, noting the city's population could swell to 25,000 within 10 years from 12,090 now. "Our City Council faced a dilemma on where to place growth. A lot of land within the city has environmental constraints because we have steep hillsides and part of the city is in a flood plain."

But the City Council, mindful of heavy traffic on onetime country roads, said Port Blakely must do the construction in phases until an access road and interchange to Interstate 90 are completed, which was scheduled to happen in January 2003. But road contractors have encountered unexpected boulders and in October said completion could be delayed 10 months.

Alarmed that delays would slow Highlands development and cause the city to lose $2.5 million in tax revenues, city officials are working with King County and state officials to complete one freeway ramp on time to funnel commuters to Seattle during morning rush hours so Highlands construction can remain on schedule.

A major boost for the Highlands is that Microsoft plans to build a $600 million satellite campus for 12,000 employees within a half-hour drive of its main Redmond headquarters. On Oct. 25, Microsoft bought 37.5 acres of the 150 acres on the plateau on which it has purchase options. Microsoft's plans envision a campus that could eventually total 2.95 million square feet. The campus is to be built in phases so that it does not overwhelm city services.

Mayor Frisinger said Microsoft submitted a site development application in August so the company can receive permits by early next year and start initial grading by summer. Stacy Drake, a Microsoft spokeswoman, says the company does not yet have a construction date. "We are not in a hurry," she said. "But we want the property permitted and ready when we need it."

Mr. Kirk says that the economic slowdown and Boeing's expected layoffs of up to 30,000 people in the Seattle metropolitan area because of canceled airplane orders in the wake of the Sept. 11 terrorist attacks have not had an impact on the Highlands.

The economic slump has mostly affected homes priced above $500,000 or $600,000, he said, "but we built only a few at that price." He added: "Our homes are in the middle of the market, and that range is very strong. People are still buying."

Two-thirds of the Highland's 600 units built are multifamily. Town houses, which tend to attract singles and couples without children, are priced at $180,000 to $320,000 for 1,400 to 2,800 square feet. More than 200 apartments have been built, renting for $1,000 to $2,200 a month. "Renters," Mr. Kirk said, "include couples trying to determine where to buy a home and young people who can't afford to buy property."

For the retail component, stores will be clustered to create a town center. A deli and grocery, hair salon and insurance agent's office are now open. Soon to come are more shops, restaurants, a health club, a movie complex and a hotel.

The Highlands faces competition. On the west side of Issaquah, another developer, Intracorp Real Estate, just broke ground on a 627-acre planned community, Talus, which will contain 1,735 residential units, 800,000 square feet of commercial development and 50,000 square feet of retail space. JPI Development, which bought 10 acres from Intracorp, is constructing 247 luxury apartments with monthly rents of $900 to $2,325 in a $36 million project.

Issaquah, a name taken from a Native American word for the sound of birds taking off over water, began when coal outcroppings were discovered along a creek in 1862, and the town incorporated in 1899.

Part of its past has already been preserved. Century-old homes have been moved to form the Gilman Village mall, where 40 boutiques and restaurants are located. In the downtown historic district, an early 1900's train depot is now a museum. The 50-year-old Boehm's Candies, which makes hand-dipped truffles and other confections, attracts thousands of visitors annually.

"People want to live in Issaquah and the Highlands," Mayor Frisinger said. "One of the things people love about this new community is the ability to hike on hillsides, a nice way to get away from an urban atmosphere."