Longacres Just Latest Boeing Buy

The addition of the 215-acre Longacres to The Boeing Co.'s extensive land holdings is one of several aggressive acquisitions that began more than a year ago and may continue if jet orders keep booming into the 1990s.

And although it may seem like an expensive deal, the Longacres racetrack in Renton probably cost less than one $130 million 747 jumbo jet, which Boeing is producing at a rate of five a month. It isn't one of the most expensive of Boeing's recent purchases, even though it probably is the most visible.

The purchase price for the racetrack was not disclosed by Boeing or the Alhadeff family, the sellers. But real estate brokers estimated yesterday that Boeing may have paid as much as $10 a square foot, or about $94 million, for Longacres. They said that is not out of line for the large site, which has potential as a major office complex in a campuslike setting. Other recent land purchases in the valley have been in the $8- and $9-a-square-foot range, they said.

Boeing's latest purchase joins deals in Tacoma and Puyallup, where sites were acquired earlier in the summer, and several tracts and buildings in the Kent Valley that were added in the past year.

Last year, Boeing spent more than $1.3 billion on property, plant and equipment additions and expects to spend a similar amount this year, Chairman Frank Shrontz told shareholders at the annual meeting in April.

Boeing, which has 103,700 workers in the Puget Sound area and a commercial-airplane backlog of more than 1,700 jets, is bursting at the seams for space. For instance, the more than 3,000 employees working on the new 767-X, which is to become the 350-seat 777 when it is launched, are spread around in several buildings rather than being concentrated in a single space. The company also recently moved 450 employees in the materiel division to Lynnwood, and more are scheduled to move there.

Among Boeing's recent land and office purchases are these:

-- $380 million for 500 acres in the Frederickson industrial site in Tacoma and a 20-acre site in Puyallup, to be used for fabrication and tool-sharpening plants.

-- $211 million for seven buildings in Auburn, Kent, Renton and Tukwila, developed by H&M Partners.

-- $74 million for 10 buildings it occupied in two private office parks in the Kent Valley in a purchase from Corporate Property Investors.

-- $8.15 million to John Fluke Manufacturing Co. for 68 acres adjoining the Everett assembly plant.

The company also is developing a $20 million fabrication plant at the Spokane Airport; a $200 million fabrication plant in Auburn; and

a $200 million expansion at its Renton assembly plant. In addition, it is planning a $500 million expansion at Everett. It has developed new offices on the former Duwamish Drive-in site.

Reports indicated that Boeing may develop a new corporate headquarters on the largely undeveloped Longacres site, but the company insisted it has no firm plans yet. A statement said only that ``Boeing intends to develop the property into a campus-style environment that will be aesthetically and environmentally sound.''

Spokesman Paul Binder said, ``We have no time schedule for demolition or development and no plans to move company headquarters.'' He said, though, the company ``hoped to have an indication what it might do fairly soon.''

Boeing's headquarters have been on East Marginal Way South since 1941, when they were moved from nearby Plant 1 along the Duwamish River. Some say the modest building isn't the quality they would expect for the Northwest's largest company.

From time to time, it has been suggested in the real-estate community that Boeing ought to move downtown to a high-rise to join other major companies here. Boeing has resisted. It also has resisted having its headquarters and plant area around Boeing Field annexed to the city, presumably because annexation would bring higher taxes.

Developers say Longacres could be developed into a showcase office site with a lake that would incorporate some of the wetlands there that may have to be protected. Zoning for the tract is for office uses, not manufacturing. Boeing's Binder said the company isn't planning any assembly or warehousing on the site.

Gary Volchok, broker and Kent Valley land expert with Coldwell Banker Commercial Real Estate, estimated it would take at least three years for Boeing to begin building on the site because of the time required to obtain permits.

``But it makes sense for Boeing to buy Longacres because of its size and proximity to its other properties,'' he said. Few other large tracts are available for development in the area.

Longacres is surrounded by other Boeing properties, from the Renton assembly plant at the south end of Lake Washington to its Auburn fabrication division. Boeing office buildings have mushroomed all around Longacres in recent years - in office parks such as Corporate Square, Black River Corporate Park, Valley 405 Business Center, Valley Office Park, East Valley Office Center.

Industry sources say that the Longacres negotiations took several months and that the Alhadeffs, whose family had operated the racetrack since 1933, made the first offer. Cushman & Wakefield represented Boeing in the deal.

Boeing bought the Alhadeffs' real estate company, Broadacres, and its Longacres holdings, rather than just the land. Although Broadacres previously held other properties for the family, these were not included in the sale to Boeing.

Brokers said that in selling the company, rather than the property, the Alhadeffs apparently would avoid paying the state's real estate excise tax of 1.53 percent on land transfers. The deal reportedly was a stock transaction with no cash involved.