Boeing Set To Develop Part Of Longacres

RENTON

While many observers speculate that Boeing has scrapped its Longacres office park plans and may sell the horse track, the company says it is moving ahead with construction of one building,and will keep the track for future development.

Still, observers in two industries that Boeing's Longacres decisions will affect, commercial real estate and horse racing, wonder when and how much Boeing will build at the site, and if horse racing will continue at the track beyond this year. Some speculate that Boeing would sell the track if an offer came along.

"The only way Boeing can save face (on its decision to buy Longacres in the first place), is if they get an unsolicited offer to purchase the land," says Craig Rench, an official of Lowe Enterprises Northwest Inc., which leases Boeing office space in Renton.

But a Boeing spokesman says the company never considered selling Longacres, for which it paid a reported $80 million in 1990. Construction will start in June or July on a $70 million customer-training center, though a contractor hasn't been chosen. The 600,000-square-foot center, to be built in a corner of the property away from the race track, will house some 900 employees when it opens late next year.

Boeing said in November that it postponed developing the rest of the 212-acre site, and the spokesman repeated last week that Longacres will be developed as needed. Cuts in Boeing's military contracts and a slowdown in airliner orders have forced the company to cancel or delay some of its building projects, particularly in South King County.

If the project is completed, up to 10,000 workers may be employed there. The influx of Boeing workers would be a boon to Renton's economy which might suffer somewhat from Boeing's transfer of workers to Everett.

Horse racing officials hope that if the project is delayed, Boeing will allow racing to continue beyond this year. A company spokesman said, however, this season will be the last.

An official with the Emerald Racing Association, the group now running Longacres, says Boeing executives told him the company nearly canceled all plans for the $800 million office park.

Jay Covington, an aid to Renton Mayor Earl Clymer, says Boeing was unsure about its Longacres plans for several months. The company was pushing to get city permits for the training center, but was indecisive on the rest of the project, he says.

"I think there were probably heated discussions in the boardroom where they said, `the heck with (Longacres), let's move to Kansas," says Covington. Boeing has production facilities in Wichita, Kan., where it employs more than 10,000 workers.

Covington says Boeing bought Longacres just before its military and commercial business dipped, and before it knew the full costs of building the new Everett plant for the 777 twinjet. Fees being charged to Boeing for its impacts on the Everett area could reach $50 million.

Rench says Renton's "egregious impact fees" could motivate Boeing to scrap further Longacres plans. Boeing is paying $2.3 million for impacts of the Renton customer-training center. If the same ratio of impacts to total project cost are applied to the rest of the proposed $800 million office park, impact fees could top $26 million.

With Boeing occupying nearly 75 percent of the class A office space in Renton, building owners such as Rench's company have reason for concern. If Boeing shifts workers from existing buildings to new buildings at Longacres, the owners would have to find new tenants to replace Boeing workers.

Renton planning officials have completed about one-third of the environmental impact statement for the rest of the Longacres development. Boeing already has approval to build a small lake on the site this summer, a prototype for a larger drainage system. Boeing also has permits to clean up small oil spills on the land.

Boeing will probably have to pay for road improvements, utility extensions and other impacts of the project, says Don Erickson, Renton city planner. And the company also may have to pay for recreational facilities, and contribute to fire and police forces in the city, he says.

Developer Basil Vyzis, who leases 300,000 square feet of office space to Boeing in Renton, says Boeing is better off hanging on to Longacres, even if it does not build there for awhile.

Holding the track may cost Boeing up to $600,000 a month, he says. The figure includes lost interest on investments if Boeing still had the money it paid for Longacres, taxes, insurance and maintenance. Still, the site is in a good location, near the airport and freeways, he says.

Boeing likes to cluster its employees, and will eventually need to expand, Vyzis figures. Sitting on Longacres is like having land in the bank, as large commercial tracts become less available in the Seattle area and as property values rise.

"It has a great value to Boeing just to sit on it," Vyzis says.

Besides, he says, few potential buyers these days would have the money needed to buy Longacres.