Downtown's big players split on Monorail's impact

When real-estate investor Ken Alhadeff gave $2,500 to Citizens Against the Monorail earlier this month, he listed his occupation as "philanthropist." But with three downtown Seattle properties along the proposed elevated train line, Alhadeff has thoughts that are far from charitable:

Ugly, a waste of money, a potential boondoggle.

Not to billionaire Paul Allen. His company, Vulcan, gave $30,500 to the pro-monorail campaign, calling it a vital link in the city's transportation system. The route would connect two of his biggest developments, Experience Music Project and Seahawks Stadium.

But Allen and Alhadeff aren't the only downtown real-estate investors on opposite sides of the track before Tuesday's vote.

The issue of whether to build the 14-mile line from Ballard to West Seattle has split some of the city's most influential developers and property owners in a debate over aesthetics, cost, effect and, most important, property values.

The divide has forced the Downtown Seattle Association and the Building Owners and Managers Association — normally loudspeakers for the business and real-estate communities — to remain neutral on a $1.7 billion project that would have a major impact on some of the most expensive properties in the city.

"We are having a very lively discussion of these issues," said Kate Joncas, director of the Downtown Seattle Association. Joncas figures the membership is evenly divided on the monorail.

For a community more accustomed to consensus than controversy, the monorail is a sore point.

Downtown real-estate interests have gotten squarely behind Referendum 51, which would increase the gas tax to pay for road and transit projects, including the first phase of replacing Seattle's other elevated transportation project, the Alaskan Way Viaduct.

Campaign contributors

When it comes to the monorail, the pros and cons are in the eyes of the landowner. One measure of the split is money. Some of the top contributors to both campaigns are major players in the real-estate community.

For the pro-monorail campaign, Rise Above It All, the list includes Vulcan; William Justen, director of Samis Land; Pat Callahan, vice president and regional head of Equity Office Properties; and developer Wright Runstad. It also has received big donations from lawyers, contractors, financiers and equipment makers that could benefit from the project. Starbucks, whose headquarters lies along the proposed route, and the Seattle Mariners each have contributed $5,000.

For the opposition, support has come from Alhadeff, property investor Howard Anderson, developer Martin Smith & Co., and parking-lot operators Joseph Diamond of Diamond Parking and Kenneth Phillips, chairman of U-Park. But Citizens Against the Monorail has managed to raise only a fraction of the monorail supporters' amount.

Property owners' perceptions

"We talked with lots and lots of property owners, and those who think the monorail will bring them a lot of new customers and business and employees are supporting it, and those who see it as blocking a few windows are against it," said Joel Horn, technical coordinator for the Elevated Transportation Co., which is planning the system.

Samis Land is a believer. The Pioneer Square developer, which owns 12 properties along the proposed route, hopes to include a monorail stop in a 24-story office-and-residential tower it wants to build at Second and Pike.

"Whether it adds too much complexity for the project, I don't know," Justen said. "(But) anyone in the vicinity of a station will have a huge benefit from having thousands of people going through the station every day."

But blocked windows could mean lower rents, some building owners argue, and they fear what the shadows, noise and visual impact of the concrete pillars and rails would do to their property values.

Art Wahl, managing director of real-estate brokerage CB Richard Ellis, says the existing monorail has made it hard to lease and develop property along Fifth Avenue. And he can't understand why Washington Mutual and the Seattle Art Museum, which plan to jointly develop a new office tower and museum expansion on Second Avenue, have not taken a stand in the monorail debate.

"Those guys on Second Avenue are nuts," Wahl said.

Matt Griffin, the developer behind the Washington Mutual and SAM project, said he respects the bank's and museum's decision to stay neutral even though he believes the monorail will complicate an already complex project.

"If the tracks are there and there is no station, am I worse off or better off?" he said. "If you have an office and the monorail is running by your window, I'd say you are worse off."

Study on property values

Horn says industry data show that fears about the monorail hurting property values are wrong. He cited a recent study using data provided by Cushman & Wakefield that compared retail rates for office property along the current monorail line on Fifth Avenue with those for property on the same blocks on Fourth and Second avenues. The conclusion: no significant difference.

And that's without stops between Seattle Center and Westlake Center. In theory, property values near stations should increase because of foot traffic and quick access to rapid transit.

Jim Potter's company, Kauri Investments, owns two Second Avenue properties that would look directly at the monorail: the Columbia Building and the adjoining parking lot between Pike and Pine streets. His company plans to redevelop the site, and Potter thinks the monorail could bring more business, people and an increased vitality to the turn-of-the-century buildings and glittering office towers that run down the avenue south of Stewart Street.

"I'm not supporting it because it is across the street from my property, I'm supporting it because it is the right thing to do," Potter said.

Howard Anderson is not convinced. Anderson, a longtime developer whose Doyle Building is across from Potter's property, has given $3,000 to the anti-monorail campaign.

"They aren't putting a monorail through a blighted area and increasing property values," Anderson said. "They are putting it down Second Avenue."

Anderson and other opponents believe the monorail's political momentum has made some of the biggest landowners reluctant to publicly criticize the proposal.

But Callahan, of Equity Office Properties, says the monorail is simply a tough call for landowners. Equity is the region's largest office owner, claiming four buildings on Second Avenue: Washington Mutual Tower, Wells Fargo Center, and Second & Seneca and Second and Spring buildings.

Callahan said he gave $1,000 to the pro-monorail campaign as a favor to Horn, but the company he works for decided not to weigh in on the debate.

"We've sat with all different sides and each time we came out saying, 'Boy, there are good points there,' " Callahan said.

J. Martin McOmber: 206-464-2022 or mmcomber@seattletimes.com