A company headed by one of the world’s richest entrepreneurs will help guide the redevelopment of one of Seattle’s poorest neighborhoods.
The board of directors of the Seattle Housing Authority (SHA) has selected Vulcan Real Estate, an arm of Paul Allen’s company Vulcan, as the top choice for the Master Development Partner in the rebuilding of Yesler Terrace, Seattle’s oldest public housing development.
The job entails the planning and financial support to replace the 70-year-old housing development in the Central District with mixed-use apartment buildings and several high-rises.
At a Jan. 22 meeting, SHA board members said that Vulcan has the experience and “financial wherewithal” to manage the sale of some 30 acres of land. It would generate the needed revenue to build 561 replacement units for families living at 30 percent or below the area median income. SHA also hopes to add 100 units to the development for that population.
“We need $300 million to build 561 units of public housing; we don’t have that money,” said John Littel, board president. “We need a master development partner to help us raise that money.”
SHA board member Kollin Min said Vulcan understands the difference between public and market-rate housing development, namely, that many elements of the redevelopment are non-negotiable, including the number of subsidized units and the requirement to mix low-income and market-rate apartments throughout the entire neighborhood.
The company is committed to SHA’s goals for Yesler Terrace, said Christina Siderius, a spokesperson for Vulcan, and the project will allow the company to make “a positive impact on the community through design and construction, through sustainable development, and generating a market return on capital investments.”
Vulcan has already redeveloped one neighborhood adjacent to downtown — South Lake Union — and has worked with the city on the construction of the Mercer Corridor.
The organization also has a handful of apartment buildings with some reserved units for people making less than 60 percent of the area median income, Siderius said.
The deal with SHA puts Vulcan in a position of considerable power over the Yesler Terrace neighborhood.
Critics of the project have questioned whether the redevelopment is meant to benefit existing SHA residents or is a giveaway to private companies looking to build high-rises and condominiums in an area that previously was filled with one- and two-story residences.
Kristin O’Donnell, a Yesler Terrace resident and longtime opponent of the redevelopment, said Vulcan’s role at Yesler Terrace is a mixed bag. On one hand, it greatly expands Vulcan’s footprint beyond its South Lake Union projects.
“That’s two big chunks of property that one entity has a massive amount of control over,” O’Donnell said.
On the other hand, at least Vulcan is a local company, she said.
SHA and Vulcan will negotiate the details of the partnership over the next six months. If they are unable to come to an agreement, which includes how Vulcan will be compensated for its work, SHA can move to its second choice, Forest City, a real estate company based in Cleveland, Ohio.