Harbor Steps Has Permit, But Not Financing -- Downtown Project's Future Cloudy

After more than 15 years of off-again, on-again planning, downtown Seattle's Harbor Steps development project is about to get its land-use permit - but the project's future now is clouded by financing difficulties.

``Our plans are just wholly uncertain,'' said Stimson Bullitt, president of Harbor Development Co., whose project would include a hotel and three apartment towers west of First Avenue and University Street.

Giving the project its name, a wide public staircase, landscaped and with fountains, would descend from First Avenue to Western Avenue, where University Street now ends because of the steep grade.

``We're just looking for financing but don't have it,'' said Bullitt last week after the City Council rejected an appeal of the Harbor Steps permit by Wallingford resident Elizabeth Campbell.

Campbell had appealed on grounds that the proposed buildings were too bulky and out of scale with other First Avenue structures. She also argued that elevators in the project's parking garage were an inadequate accommodation for disabled people seeking to reach shops planned for the various levels along the Harbor Steps and to enjoy the open space there.

Campbell said she won't appeal to King County Superior Court, leaving the city free to issue the Harbor Steps permit within a few weeks.

But with the permit in hand, Harbor Development faces ``the dilemma of having it run out'' before financing can be arranged, said Bullitt.

He said the company now is seeking financing only for the $100 million southern half of the project, a first phase which would include 453 apartments, 50,000 square feet for shops and 565 parking spaces in a massive structure between First and Western avenues and Seneca and University streets.

Post Alley, which splits the site north and south, would be raised and rebuilt above several levels of parking and would be used as a pedestrian shopping street through the middle of the project, connecting the Waterfront Center to the south and the Pike Place Market to the north.

Between First Avenue and Post Alley, there would be a 24-story apartment tower rising from the base structure and between Post Alley and Western Avenue, there would be a 16-story tower.

In a future phase, north of the steps at University Street, a 24-story hotel is planned between First Avenue and Post Alley and another 16-story apartment tower is planned between Post Alley and Western Avenue. The 86-year-old Erickson Building, which contains shops and offices, and the 75-year-old Oceanic building, which houses studios and lofts, would be demolished in the second phase.

In the early 1970s, Harbor Development demolished the turn-of-the-century Bay Building facing First Avenue between Seneca and University streets to make way for the present project.

The namesake steps will be built as part of the first phase. University Street above the steps is already slated to get street trees and other improvements as part of a project being paid for by downtown businesses.

Around 1980, the Harbor Steps project was envisioned as a hotel and condominium project, but the market for expensive downtown condominiums all but vanished. Within the past few years, however, an apartment construction boomlet has hit downtown. About a dozen new projects have been built or are under way in the Denny Regrade. That's the market Harbor Development is looking at this time around, Bullitt said.

But others in the development community wonder if Harbor's timing is wrong again. Banks and foreign investors are skittish because of the worldwide recession. ``It's very difficult to finance any kind of real-estate project right now,'' said Jon Runstad of Wright Runstad & Co., a major office building developer.

On top of that, some say Harbor Development will have problems because of its track record - or lack of one. The company opened the mixed-use South Arcade retail and residential project on the northeast corner of First Avenue and Union Street in 1984 but lost money on it.

Still, Bullitt, a prominent attorney and member of the family which owns King Broadcasting Co., is determined to find financing before his land-use permit runs out in 18 months. The company has already submitted plans for the excavation and foundations for towers and the Harbor Steps themselves with the intention of starting construction this year if the money turns up.