Wally Trace -- Opportunity Knocks Regularly At The Door Of Seattle Developer

-- Name: Walter Trace.;

-- Position: President, Trace & Associates.;

-- Age: 46.;

-- Goal: ``To finish projects I'm working on and see what's next.'';

-- Quote: ``It's totally an accident that I got here.'' ;

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Wally Trace attracts opportunities - many he never dreamed about. As a result, he's become a niche developer of shoreline properties, particularly at south Lake Union.

In the development world, shoreline properties pose sticky problems and risks, primarily because of environmental concerns, possible permit delays and community concerns.

Trace has built his business, and his reputation, on overcoming those shoreline-related problems. He's now one of the main local developers sought out to take on sometimes-difficult waterfront projects.

It started five years ago at south Lake Union, and more recently, involved him in property on Port Townsend's waterfront.

``People believe in me,'' he said. ``It isn't easy. You have to love the projects. I feel fortunate and it's a compliment when people decide to put their confidence in me.''

Taking advantage of unusual opportunities hasn't been easy or particularly profitable, Trace said. But others say he recognized the potential in projects, found his way through regulations and community concerns, and persuaded lenders to back him.

``Trace has nerve, good instincts and creative ideas, and can make things happen,'' said Duke Moscrip, one of Trace's restaurant tenants on south Lake Union as owner of Duke's ChowderHouse and Duke's Yacht Club.

Trace, who started his business career as a salesman for dental products, formed his own development business in 1974 and began with medical office buildings and clinics.

Then, a friend in the industry - Joe Alhadeff, now in the lending business - asked him to become involved in redeveloping the H.C. Henry family pier site on Lake Union at the foot of Fairview Avenue North. Later, Trace acquired the Lone Star Cement Co. site next door and, most recently, negotiated a long-term lease for the St. Vincent de Paul property to the east.

The developments make up a mixed-use complex of boat moorages, restaurants and retail shops with lots of open space.

Trace also recently became an investor and manager of the former Rusty Pelican restaurant property (now housing Duke's Yacht Club), and he is about to begin a $4 million redevelopment of the St. Vincent de Paul property. Trace was chosen by the charitable organization over other developers who wanted the choice lakefront building and moorage.

In addition, Trace soon will begin a major redevelopment of Union Wharf, a historical downtown pier on Port Townsend's waterfront. Plans include a 45-room inn, restaurants and retail space there, along with a possible new passenger-ferry slip. Except for the St. Vincent de Paul site, he was sought out as the developer or was offered the property for all his shoreline projects.

``He deserves incredible credit for sticking his neck out at Lake Union,'' said Moscrip.

Shoreline activists criticized Trace's redevelopment plans for the lakeshore because they prefer to retain shorelines for ``working waterfront'' activities, such as boat and equipment repair and construction. The city, however, designated the area for more people-related activities and gave Trace the necessary approvals.

Trace said that, in addition to the attraction of businesses at South Lake Union, he is emotional about the area because his grandmother lived nearby and he grew up catching crawdads there.

``It's been a big part of my life and it's become my neighborhood in the past five years. His office is on the ground level below the Cucina! Cucina! restaurant.

Trace said it hasn't been difficult to get restaurant owners to come to his developments, but attracting buyers to the retail shops has been more of a challenge. Trace lost three retailers in the first year but said sales for the 10 shops there now are up 25 percent over last year.

``I seek out one-of-a-kind specialty outlets to provide a special attraction,'' he said.

Marilyn Adams, partner with Jack O'Keefe in Pennsylvania Woodworks, said their outlet at a Trace project, Chandler's Cove, which offers furniture and accessories, quilts and rugs, is doing well. They just expanded by one-third to 3,000 square feet.

``We thought it would be a unique location and we're finding it very profitable,'' she said. She said many of her customers tell her they saw the store while strolling after dinner. They come back later to buy.

The developer said he would like to see housing developed around his complex, but it is prohibited by zoning. A Marriott Residence Inn will open next spring across the street from Chandler's Cove, and the City Light Steam Plant site farther north on Fairview is being discussed for a potential housing development. Creation of the new Fred Hutchinson Cancer Center in the nearby area between Fairview and Eastlake avenues, now in the permit stage, is expected to attract more office workers.

Already, Trace's successful complex has been chosen for several local events, including boat shows and the Seafair summer-sports festival. A South Lake Union city park, west of his complex, and the nearby Center for Wooden Boats, also add to the atmosphere there.

Despite his devotion to Lake Union, Trace lives near another body of water - Green Lake - and just 10 blocks from the home in which he grew up. He's a University of Washington political-science graduate and also attended Seattle University's graduate business program. A platoon leader in the Army, he spent two years in combat in Vietnam from 1968 to 1970.

He describes himself as a soccer junkie, playing and coaching whenever possible. In addition, he likes boats, fishing and water-related activities.

``Trace is tough to deal with but a nice human being,'' said Art Wahl, realty broker who represented St. Vincent de Paul in its negotiations. ``He works the niche and has been able to get through the maze to make it happen.''

Trace, who said his waterfront-development projects are not yet profitable, said his goals include ``survival - I haven't made it yet.'' He has investment partners for his developments - ``I can't afford to own them'' - and retains management responsibility for the properties. He has a staff of three and a broker on contract.

What's after Lake Union? When he has completed the Port Townsend redevelopment next summer, Trace said he may look for a waterfront project in the San Juan Islands.

If past experience is any indicator, the search won't be difficult. Someone with a proposal will find him.

Profile appears weekly in the Business Monday section of The Seattle Times.