Downtown Nordstrom Project Behind Schedule

This time six months ago, merely reciting the schedule for the $400 million redevelopment of Seattle's downtown shopping district could make a person breathless:

Financing for an ambitious plan that centers on restoring the vacant Frederick & Nelson store at Sixth Avenue and Pine Street would be lined up by the fall. Construction would start in January. The stretch of Pine between Fourth and Fifth avenues, now closed to traffic, would reopen to cars by the end of June.

And by the fall of 1997 - after about a year of construction and torn-up streets - a new Nordstrom store, a five-story mall, a 16-screen theater, underground parking garage and a boutique hotel would open for business.

Take a deep breath; let it out. Downtown's rejuvenation won't happen as fast as everyone thought.

The three-block development that Mayor Norm Rice has called the key to reviving downtown is off to a slow start. Pieces of it, in fact, are months behind schedule. The new Nordstrom store probably won't open until 1998, missing the 1997 Christmas season, if the store's typical construction schedule applies. And the reopening of Pine Street will come more than a year later than planned - by September 1997 at the earliest.

The project's developers, Pine Street Associates, along with other downtown sources, say the delays don't reflect fatal problems - just stiff competition for retail tenants, strict demands of lenders, a tricky architectural challenge and the tedious city street-planning process.

Matt Griffin, managing partner for Pine Street Associates, says the team expects to make a splashy pronouncement of progress within a month: a cash investor, three key retail tenants, and a final contract to buy the old F&N building and redevelop it into a new flagship Nordstrom store.

Griffin says some pieces of the project are on track but some have slipped.

"The leasing always takes longer than expected," he said. "It's hard to get retailers to focus on things that are a couple of years out."

Even with the coming announcements, Griffin and his partners, developers Jeffrey Rhodes, Thomas Klutznick and Kenneth Himmel, already are behind their goal to obtain financing by the fall.

That, in turn, will likely push back everything else. Despite plans to phase in the start of construction between January and April, the developers are just now getting close to receiving a land-use permit and haven't applied yet for building permits. Once they do, it will be a minimum of two months, likely longer, before the permits are approved.

It's a universal Catch-22 in the development business: Before you get a loan, you need signed deals with tenants. But to get a great response from tenants, you often need a visible construction site.

After Nordstrom moves to the F&N building, the development group plans to rebuild the existing Nordstrom store at Fifth and Pine for new retailers, add a hotel next to the store, and build a mall on the block east of F&N, which now houses an old parking garage and some stores.

"We're just working hard on all the pieces of the project," Griffin said. "We're working to finish documents with the Nordstroms, all the stuff on the garage, the construction loan, equity financing, a few of the anchor leases and the design of the building. All of those things are in the hot-and-furious stage at the moment."

Not an easy project

Another downtown-leasing insider puts it more bluntly: "My opinion is that they're struggling a bit."

Some of the rumored "plums" - retail tenants who would help to draw others - have either located elsewhere downtown or decided to put off moving.

FAO Schwarz opened in the U.S. Bank Centre. Warner Brothers will open in a few months on Fifth Avenue, north of Banana Republic. Saks Fifth Avenue is having financial problems and doesn't expect to open a store in downtown Seattle. Officials at Crate & Barrel, a housewares store, say they aren't ready yet for a move to Seattle.

That still leaves a good pool of prospects, including a J. Crew clothing store and Barnes & Noble, the fast-growing-bookstore-that-looks-as-big-as-a-library. The trick is courting such sought-after retailers. Eddie Bauer, now at Fifth and Union, reportedly wants to move to the new project if it can negotiate terms on its current lease. Williams Sonoma, the upscale kitchen shop, reportedly might move out of Westlake Center into the new development.

Competing for at least some of these new tenants are the NikeTown-Planet Hollywood development under construction at Sixth and Pike, which still needs one tenant; the nearby I. Magnin building, which needs two more tenants in addition to Virgin Music; and various smaller sites.

Pine Street tab grows

Meanwhile, the cost of reopening Pine Street has soared. Voters approved the opening last March when Nordstrom made it a condition of going ahead with its new store. Retailers have long thought that the Pine Street closure created such bad traffic jams downtown that it kept people away.

City officials initially estimated the cost would be $1 million, and they received a federal grant to cover that amount. But now estimates are as much as $1.4 million. So plans are being reworked, and projections are that the reopening won't happen until September 1997, more than a year later than voters were told.

The problem: Instead of pushing a few rows of planters aside to open the street, the city wants to narrow it from three lanes to two, and widen the sidewalks as a compromise. That could mean rearranging the road's decorative stones - a job that harkens bad memories of more than seven years ago, when the newly laid stones settled under traffic and required repair.