A Dream Site Or A Nightmare? -- Port Quendall Toxic Cleanup May Be Too Much, Even For Paul Allen

RENTON - In many ways, Port Quendall is a developer's dream.

Nestled along a mile of shoreline, its 68 acres are zoned for just about everything - offices, homes, stores, hotels, a marina - on a big scale.

But the largest developable property left on Lake Washington is also one of the most contaminated sites in the state, one that has dashed the dreams of a string of developers over the past 22 years.

For more than six decades, the site was the center of creosote production, and residues from chemical vats were routinely dumped on the ground.

Now, the latest and wealthiest developer - multibillionaire Paul Allen - may also walk away from the site.

Allen's options to buy the land expire Nov. 4, and he is expected to decide soon whether to move ahead with his mega-project at Port Quendall or move his companies' headquarters to a more modest backup site in Issaquah.

"It's going to be difficult for anybody to do it if he can't," says Renton's economic-development director, Sue Carlson. "We don't want it to sit for another 50 years spilling oil."

If Allen walks, it would be a disappointment to Carlson and other city officials who view him as their best hope for developing this troubled property and transforming blue-collar Renton into a world-class technology center.

It also would be a blow to the state Legislature and Department of Ecology, which have spent more than a decade streamlining procedures for cleaning up toxic wastes and redeveloping industrial "brownfields" like this.

What a difference a year has made.

Allen electrified Renton and neighboring Newcastle last year with the announcement that he had optioned four large properties in the Kennydale area for a corporate campus ranging from 2 million to 3 million square feet.

His plans envisioned a $500 million to $700 million development with up to 10,000 workers in offices, a hotel and conference center, restaurants and stores, along with trails and public open space between Interstate 405 and Lake Washington.

As the months passed, however, the difficulty of developing the land has become apparent once again.

Allen's number crunchers determined the cost of environmental cleanup and road improvements was too high to support the original plan. They went back to the drawing board to see if they could eliminate $40 million of new freeway interchanges by replacing many of the planned offices with multifamily housing.

Allen could become the latest in a parade of developers who have walked away from the property.

The Skinner Corp., which built Kirkland's tony Carillon Point, nearly bought the Port Quendall site in 1989 or 1990, but backed away because of uncertainties about what kind of environmental cleanup the Department of Ecology would require.

"Not only could they not tell you what the cost would be, they couldn't tell you when they would know what the cost would be," says Judd Kirk, who developed Carillon Point in Kirkland for Skinner and who now is president of Port Blakely Communities.

"That's a double whammy. When you invest that kind of money, you have to be able to project what your costs are."

Kirk envisioned Port Quendall as "another Carillon Point," but much larger and with a mix of more homes and fewer offices.

The vision of a large waterfront development dates to 1972, when the Cugini and Baxter families formed a partnership to buy the Quendall Terminals property, where the Reilly Tar and Chemical Co. had produced creosote for 63 years.

Each family owned a property adjacent to Quendall Terminals. The Cuginis operate the Barbee Mill, the last sawmill on Lake Washington, and sort logs on the former Reilly property. J.H. Baxter & Co. ran a wood-treatment plant on the other side of Reilly.

Combining their three properties, the Cugini and Baxter families assembled a remarkable 60-acre tract of lakefront property zoned for a mix of uses. (Allen's plan would enlarge the property to 68 acres by adding the Pan Abode Cedar Homes property.)

"It's a beautiful site," says Robert Cugini, vice president of the company and grandson of its founder. "There are not any like it in the area."

With the property's panoramic view of boats in the Lake Washington East Channel, the forested hillsides of Mercer Island and the southern tip of Seattle, it's hard to argue with him.

Two developers - Don Koll Northwest followed by James Schuler's Port Quendall Development - started working on plans for a megadevelopment in 1976. Schuler won approval from the Renton City Council in 1982.

But the plan was stalled by the toxic-contamination problem. The U.S. Environmental Protection Agency didn't decide until 1986 whether the cleanup would be supervised by the federal or state government. The state assumed jurisdiction, but contamination continued to be a stumbling block for developers.

Carlson's description of contaminants as "oil" is a charitable term. Two industrial plants operating between 1916 and 1981 left a legacy of cancer-causing chemicals in the soil, groundwater and lake sediments.

After such a long history of failed development attempts, it's no surprise that state and city officials are eager to see the toxic mess cleaned up by a developer with pockets as deep as Paul Allen's.

No one yet knows just how much it will cost to clean up the contamination or improve I-405 access to the site. Nor is it known just how much public money might be thrown into the pot along with a developer's capital. Cost estimates range upward of $20 million to deal with the chemicals and $40 million to $84 million for road work and a transit center.

The Legislature has tried to speed up redevelopment of industrial "brownfields" by allowing officials to strike deals with developers who, like Allen, don't yet own the property.

Cleaning up contaminated, idle land like the Reilly and Baxter parcels is exactly what the Legislature had in mind when it modified the Model Toxics Control Act's brownfields provisions last year, notes Assistant Attorney General Tanya Barnett.

City officials likewise see opportunities for economic growth and transportation improvements. A development the size of Port Quendall would hasten construction of a regional-transit center and direct-access ramps to car-pool lanes on I-405 - at far less cost than in fully developed areas, according to Renton's transportation planning manager, Lee Haro.

The Port Quendall transportation plan also calls for bike and pedestrian trails along the waterfront, possible ferry service and shuttle buses around the campus.

"We think this is an exciting regional opportunity to do a demonstration of land use and transportation working together to support the transit system," says Haro.

It might seem that those most concerned about the possibility of an Allen pullout would be the property owners. Not so, according to Cugini.

He would like Allen to develop the property. But if Allen doesn't, the Cugini and Baxter families are prepared to complete the environmental studies they've been funding for years - and then Cugini expects them to do the cleanup.

"I've always envisioned, and it was always my plan," he says, "to slowly develop the site ourselves. Mr. Allen approached us, not the other way around."

Publicity about Allen's project has brought other potential development partners to his door, Cugini says.

With the valuable land already in hand, most of the environmental surveying completed, Ecology officials clearer about what they expect, a continuing revenue stream from the sawmill, and developers interested in the property, Cugini is biding his time.

Robert Cugini figures Paul Allen's loss might just prove to be his family's gain.

Keith Ervin's phone message number is 206-515-5632. His e-mail address is: kerv-new@seatimes.com ----------------------------------------------------------------- Port Quendall: a difficult site to develop

Eighty years of pollution to clean up

Until now, efforts to redevelop the industrial site known as Port Quendall have failed because of the highly cost of cleaning up toxic.

Likely transportation improvements

The latest would-be developer, Paul Allen, has found that transportation costs will be high if the site is developed. Among necessary changes, I-405 would have to be widened to accommodate a transit stop and direct HOVE access. ----------------------------------------------------------------- SEATTLE TIMES