On The Waterfront -- South Lake Union Has Become A Hot Spot For Development

Lake Union is changing again.

Ten years ago, the south end of Lake Union was a dusty, noisy collection of ship-repair yards, machine shops and water-related shipping and receiving docks. The public could barely see the lake through this industrial maze, let alone walk up to it or find a place to slip a boat in the water.

The marinas, upscale restaurants and small, trendy shops that began South Lake Union's transition will soon be joined by more major developments:

-- St. Vincent de Paul site. Wally Trace, who developed most of the row of restaurants along the southern end of the lake, plans to turn this former charitable institution into more restaurants and retail spaces.

-- Fred Hutchinson Cancer Research Center. Construction is under way on the first phase of what will be a complex of research and office space on the southeast side of Fairview Avenue North.

-- South Lake Union Park. This park is becoming a reality. The city has already planted grass on the land and placed a few benches.

-- Steam Plant renovation. Seattle City Light is in the process of cleaning up the steam plant at the Fairview Avenue North and Eastlake Avenue East in anticipation of selling it to the Koll Co. to rehabilitate into condominiums. The rehabilitation will probably begin early next year.

Lake Union seems like it is always in transition.

In the 1960s, its famous houseboats were threatened, then saved. Buildings constructed on pilings began jutting out into the lake in the early 1970s, raising fears the lake would be "walled in" until state laws and city ordinances halted the trend. Gasworks Park became a reality. Pocket parks were developed along the street ends.

Now it's the south shore of the lake. That transition is already well under way, having started six years ago with the development of the first of several upscale, landscaped restaurants.

Critics ridicule the changes and lament the decline of what was once a "working waterfront."

Others argue the working waterfront was doomed by concern over industrial pollution in the lake, a broad decline in the shipbuilding and ship-repair industries, and rising land values that made the land too expensive to be used as industrial property. They say the development has brought more and better public access to the lake than existed when the land was controlled by private businesses.

But now many of those businesses are gone. In their place are restaurants, hotels, hospitals and parking lots - footprints of the transition of the Seattle economy from industry to the service sector.

More changes are arriving. Marriott Residence Inn recently finished a 234-room hotel at Fairview Avenue North and Valley Street. Construction is well under way on the first phase of a new home for the Fred Hutchinson Cancer Research Center that eventually will cover three blocks and parts of two more. Last month brought word that the St. Vincent de Paul building, which sits between Chandler's Cove and Duke's Yacht Club, will be renovated to add two or three more restaurants to the neighborhood by the end of the year.

A new city park, condominiums at the old City Light Lake Union Steam Plant, an office building for the Washington State Employees Credit Union - all are planned for the next two or three years around South Lake Union.

"The changes are natural for a growing city like Seattle," said Jim Francis, administrative manager of Lake Union Dry Dock, a remnant of the "old" working waterfront. Lake Union Dry Dock traces its South Lake Union roots back to 1919.

"It isn't necessarily good or bad. It's just something we have to accept," said Francis.

The changes affect Francis' business. He said parking around the boat-repair company, at the southeast corner of the lake near where Eastlake Avenue meets Fairview, already can be a problem for the company's 180 employees.

He's worried that street parking will virtually disappear when the new headquarters for the Employees Credit Union is built across the street from his company and when the steam plant, around the corner, is renovated. If that happens, said Francis, the Dry Dock's ability to attract good workers might be hurt.

Residents of Eastlake, generally the uplands area along the east side of the lake, have other complaints about the developments, especially their effects: More traffic, less parking and, more subtly, the social value of changes in the area.

"It's become yuppie heaven down there," said Chris Leman, president of the Eastlake Community Council. "What's happening with St. Vincent de Paul is a good example. (St. Vincent) provided a vital public service to the homeless. Now it's gone and we're getting more restaurants; the last thing we need."

Carol Eychaner, an Eastlake resident for 15 years, said the development of South Lake Union has isolated the area from both Eastlake to the east and Queen Anne to the west.

"It feels detached, antiseptic," she said. "When the city finishes developing the park down there, I'm sure it will be much more regional than local. I'm sure I won't be going there very often."

The views of Eychaner and Leman are not universal. Jules James, an Eastlake resident and businessman, served as chairman of the Citizen's Advisory Committee that studied the steam-plant renovation two years ago and is enthusiastic about improved public access to the lake.

James said the development has been as good as could be expected. James even has good words for Wally Trace, the developer most responsible for changing the face of Lake Union's south shore.

"I disagree a lot with Wally on what should happen down here," said James, staring out at the lake from the barely weathered wharf of Trace's Chandler's Cove. "But considering we were going to get development at some point, (Trace is) about the best we could have hoped for. At least he's been a unifying force down here."

Trace's office is tucked away under the trendy Cucina! Cucina! restaurant at Chandler's Cove.

"It was all an accident," said Trace of restaurant row stretching from Burger King and Benjamin's at one end of South Lake Union and heading northeast past Chandler's, Cucina! Cucina!, soon-to-be-built restaurants at St. Vincent's, Duke's Yacht Club and Kamon on Lake Union. Kamon is the only one Trace hasn't had a hand in.

"We had no thought of doing all of South Lake Union," said Trace.

Though Trace said his role in developing South Lake Union was an accident, he believes it was inevitable that someone would do the development because of rising land values and the changing economics of ship repair and ship building.

Trace first became involved in South Lake Union in 1984 with his purchase and development of Henry Pier, the current site of Benjamin's restaurant (just behind Burger King). Trace said Seafirst, which had planned to develop Henry Pier in the early 1980s, decided to scrap the project along with many of its real estate plans. Real estate development had become too risky for the then-financially strapped Seafirst.

Trace bought Henry Pier and fought tooth and nail with property owners on the lake who wanted to keep him from putting a restaurant there. But property owners, many represented by the Seattle Marine Business Association, lost the battle and Trace's project moved forward.

The Marine Business Association shifted its efforts to preserving industrial uses on the north end of the lake.

Not a single public comment opposing Trace came during subsequent developments of Chandler's Cove or in the permitting process for the St. Vincent site, which will be renamed Yale Street Landing.

Once redevelopment of the lake had begun, said Trace, land values for other property owners escalated rapidly. Land that for decades had been valuable industrial property suddenly became too valuable for industrial uses. In 1986, Lone Star Cement Co. approached Trace about selling its land, which is now Chandler's Cove.

"I remember I met the Lone Star representative in a coffee shop in San Francisco," said Trace. "We worked out a deal in a half hour. It was basically on a handshake."

Trace said Loan Star saw it was losing about $300,000 a year in opportunity costs - the cost of not using the land to its highest value. St. Vincent de Paul, said Trace, came to much the same decision a couple of years ago when it decided to move. St. Vincent is leasing its property to Trace for 99 years.

Trace is sensitive to the charge that he eliminated the "working waterfront."

"We have more jobs there now with the restaurants and retail than ever were there before," said Trace.

Eychaner, an Eastlake resident, said it doesn't make sense to simply add up jobs from before the redevelopment and compare it with after as a way to judge the transformation.

"(The area) could have been redeveloped to be much more interesting," she said. ------------------------------------- THE CHANGING FACE OF SOUTH LAKE UNION ------------------------------------- In the not-too-distant past, the south end of Lake Union was strictly an industrial area. Now, however, economic factors - especially the increased value of land - are contributing to integral changes in the waterfront area, which some say is becoming a "yuppie heaven."

Seattle Steam Plant: Kill Co. plans to spend more than $20 million renovating the steam plant into 109 condominiums beginning in spring 1992 with occupancy scheduled about a year later. Koll must wait for Seattle City Light to finish its environmental cleanup of the plant, which is taking longer than expected.

Fred Hutchinson Cancer Research Center: Construction has begun on a $70 million complex of two low-rise research buildings that will house about 400 of the center's 1,600 employees. The first phase is expected to be finished by the end of 1992. There is no set timetable for construction of an additional two phases, though the center believes it will finish the entire project this decade.

Residence Inn-Marriott: This 234-room hotel is specifically geared toward the traveler expecting an extended stay in Seattle. The $25 million project opened April 22.

Center for Wooden Boats: The center and the Northwest Seaport - both private, nonprofit organizations - are working together to establish the Maritime Heritage Center in the planned South Lake Union Park; the only step left for the almost $2 million project is the city's approval.

Restaurants and retail: Previous developments over the past five years include Benjamin's, Burger King, Chandler's, Cucina! Cucina! and Duke's Yacht Club at the former site of the Rusty Pelican. All except the original Rusty Pelican were developed by Wally Trace.

St. Vincent de Paul site; Construction is beginning soon to renovate the site into restaurants and retail space. The project, to be renamed Yale Street Landing, is supposed to be finished by the end of the year.

South Lake Union Park: Plans for a park are progressing, although the ultimate size and exact location are still up in the air, depending on the future of the U.S. Naval Reserve station near the site. The city eventually wants to include all of the land now housing the base, although Navy's price tag of $20 million for the site is too steep.