Setting Up Shop -- Rainier Valley Square Isn't Just Another Strip Mall, It Represents Jobs And An Economic Boost For Area

In many neighborhoods, Rainier Valley Square would be viewed - even condemned - as just another strip mall.

In this neighborhood, though, residents don't mind the signs of retail construction that so often spark community protests. In this case, the beige concrete walls and blue metal awnings going up at Rainier Avenue South and South Andover Street are a welcome sight.

No one even complains about the rows of parking spaces that hint at possible traffic jams once the center opens next month.

Instead, when they look at construction workers erecting a Drug Emporium, Olson's Max Foods, Starbucks, Hollywood Video and other stores at the center, they see jobs. They see a clean new building in place of a dilapidated, closed-down Pay 'N Pak store. They see a place where they can buy groceries, pick up discount makeup, rent a video and sip a latte all in one stop.

Most importantly, they see the shopping center as a long-awaited sign of respect: Businesspeople are finally viewing Rainier Valley as a place where they can make money.

The impetus for the project was part social conscience, part financial foresight.

Gramor Development Northwest, based in Lynnwood, bought the land for $4 million about two years ago, after Associated Grocers approached the company saying it wanted to put a supermarket on the site. Eight months after the Pay 'N Pak hardware store closed on the site, residents were using the lot as a garbage dump.

Bob Beaupre, Gramor's president, said he approached the city of Seattle and South East Effective Development (SEED), a nonprofit economic development agency, for help in promoting the project to the community.

He wound up getting more than moral support. Both SEED and the city were working to help redevelop the depressed area, responding to residents' demands.

Despite the existence of middle-class and affluent neighborhoods scattered throughout Rainier Valley, the wide, flat area lining Rainier Avenue South had suffered economic blows for decades, since the race riots of the 1960s.

The Albertson's grocery chain had moved out, leaving only smaller independent markets and a bare-bones Safeway. The former Sicks' Stadium (home of the Seattle Rainiers Baseball Club) had sat empty for more than a year, a large "For Lease" sign on a white warehouse an ugly reminder of neglect by developers and business owners. Many small businesses were struggling. Some buildings had been boarded up after their merchants went out of business. Graffiti and plywood-covered windows were common sights.

Responding to the obvious need for an economic boost, SEED contributed $600,000 to the Rainier Valley Square project. The city provided a low-interest backup construction loan of $9.3 million, using federal grant money.

The decisions that have guided the project since have been purely business.

Smaller merchants at the center, including Hollywood Video, are paying slightly higher-than-average rents, the result of soil contamination and other problems that drove up construction costs.

So far, businesses have been willing to pay more. The key reason: About 90,000 people live within three miles of the center and have very few places to shop. They have an average household income of about $40,000.

Howard Behar, executive vice president of operations for Starbucks, said his company is moving to the center because the area needs a gourmet coffee shop and because the mix of stores will draw customers - two key factors it applies to every site decision.

Executives with Kirkland-based Drug Emporium also thought it would be a smart business move.

They knew of other successful drug stores in the area and thought they could compete well, said Leslie Schmidt, the company's employee relations coordinator. They also concluded that a store on Rainier Avenue South would take very little business away from other Drug Emporiums. At most, there would be 5 percent overlap with the Southcenter store.

Schmidt said the company expects sales on Rainier to compare closely with those in Burien and Edmonds, both of which set grand-opening sales records when they opened one and three years ago. She would not cite figures.

The shopping-center project is one of only a few retail developments under construction around Puget Sound, according to CB Commercial Real Estate Group. The others are a shopping center on Lower Queen Anne, a Costco and Home Depot at the former Aurora Village, a shopping center in Tukwila, a Home Depot in Federal Way and a Fred Meyer in Bonney Lake, in southeast King County.

This isn't the first big step for economic development along Rainier. Recent developments hint that the area might finally see the boom it's been hoping for for years.

Eagle Hardware & Garden opened at Rainier and South McClellan Street in 1992, bringing the area one of the few hardware megastores in all of Seattle. Sales haven't met those of the chain's earliest stores, but that is a typical phenomenon when a chain begins competing with itself as it opens more stores, said retail analyst Jeff Atkin. Executives predicted that would happen, and sales are "at least as good as management expected," said Atkin, an Eagle stockholder.

Safeway was the first large retailer to court the Rainier Valley market, remodeling its store at Rainier and South Genesee Street about three years ago. The expansion converted the store from a basic market into a full-service supermarket with a deli, flower shop and fish counter.

But Safeway's presence in the community has drawn its share of controversy. Some African Americans picketed the store after a security guard shot and killed an African American suspected of shoplifting in 1990. But other residents have praised the store manager, an African American, for getting involved in local youth and homeless causes.

Residents of Seward Park and Mount Baker hailed the expansion because it meant they would no longer have to drive to Mercer Island for groceries.

John Miller, a vice president with CB Commercial Real Estate Group, said the Rainier Valley has been known for a high number of residents who drive somewhere else to shop - "leakage," as it's known in the real estate industry.

"It is a powerful market area," he said. "I think people coming into the community and treating the community with respect - you have a very diverse community, with wealthy people as well as others - those people are just going to have tremendous success."

It has taken awhile for businesses to recognize that potential and move to capitalize on it. In fact, some large retailers, including Quality Food Centers and Starbucks, have been criticized for not moving fast enough to open in central or southeast Seattle.

Starbucks is now answering those critics with its store due to open alongside Olson's on June 10. Not only will the store serve southeast Seattle, a share of its proceeds will be donated to Zion Preparatory Academy, a private school in the Central Area. Starbucks employees also plan to teach a business course at Zion, using a small coffee cart to show students how to run a retail operation.

QFC, meanwhile, has been searching for a site and is rumored to be close to announcing a deal.

Brandon Caldwell is excited about what the businesses will bring to the community - jobs, for example, like the one he just started.

Caldwell is one of 40 to 50 people hired by Drug Emporium to stock shelves until the store opens June 4. The employees will then work in various jobs once the store opens.

They started at $4.90 an hour but can earn $7.50 an hour depending on the permanent jobs they are assigned.

Caldwell is a University of Washington business-law student who lives close to the new store. He, like most of the workers, got his job through a job fair the store held April 12, an event that drew 500 people, overwhelming drug-store managers who typically see 100 job-seekers at fairs held before store openings.

Caldwell praised the store's efforts to give jobs to local residents and to reflect the diversity of the community in its hiring practices.

Census data show the area's racial breakdown to be roughly one-third white, one-third African American and one-third Asian American.

"I'm really impressed with the hiring and how they did it," he said. "They said they'd take anybody off the street" as long as they appeared to be reliable workers. "Blacks have a really hard time getting jobs off the street."

Because the shopping center was built with a federal community-development block grant, its stores were required to make at least half their jobs available to low- and moderate-income people.

Job fairs were organized through the Seattle-King County Private Industry Council, which administers federal job-training money, and the state unemployment office on Rainier. Job openings also were publicized through community groups.

As a result, nearly all jobs at Drug Emporium and Olson's have gone to residents of Rainier Valley, said store managers and city officials.

Officials didn't have statistics but said they were basing their statements on informally reviewing applications submitted by the new hires.

On a recent day at Drug Emporium, many shelf stockers said they were from the neighborhood, one said she lived downtown and another in Madison Park. Most of the workers were African American, and some complimented the store for reaching out to them.

Caldwell said the development will "do a lot for this neighborhood."

"It'll get the trouble out," he said. "The more businesses you put in this neighborhood, the more the trouble will leave."

No one, it seems, would argue with that theory. The problem is proving it to be true.

Herman McKinney, director of the Urban Enterprise Center at the Greater Seattle Chamber of Commerce, hopes to create a standard method to measure the effect the new Rainier Valley developments will have on the community's poverty level, unemployment rate, welfare reliance, crime, even high-school graduation rate.

A group of city and business leaders hopes to develop a clearinghouse of information, using a Ford Foundation grant that the city is competing for, McKinney said.

In addition to information on societal issues, he said, the group could gather demographics for businesses considering new sites - things such as population, income and shopping patterns.

"That's just as important, that we are able to share the information with other corporations so we can eliminate the fear of moving into those areas," McKinney said.

So far, McKinney is pleased with the attention Rainier Valley is finally getting from business executives.

"It seems like it's happening real fast now," he said. "This has all happened in the last two or three years. If we continue at that pace, then I think it's going to make a substantial impact."