Industrial-land fight goes to council

Longshoreman, lawyers, lobbyists and labor leaders are expected to pack City Hall today as the battle over Seattle's industrial lands moves to the City Council.

At issue in a 5:30 p.m. council hearing will be a proposal by Mayor Greg Nickels to protect good-paying jobs by curtailing office and retail development on 5,000 acres now dedicated primarily to manufacturing and industry in the city.

On one side are blue-collar employers and workers supporting Nickels' proposal, urging quick action by the council. On the other are mostly property owners who say Nickels' plan would reduce the value of their land in a misguided effort to protect jobs.

"This is kind of shaping up as a battle for the fate of industrial jobs in the city. It's downtown versus industry, white collar versus blue," said Deputy Mayor Tim Ceis.

The debate arises now because regional growth and rising property values are driving developers to look more at industrial lands for office and retail uses. As they buy land at increasing prices, rents go up and some blue-collar companies worry they will be displaced.

Fears grew last spring when Henry Liebman, a developer who has amassed 40 acres in the Sodo neighborhood, paid $13.5 million for five acres where trucking firm MacMillan-Piper loads and unloads cargo containers for such companies as Starbucks and Weyerhaeuser.

MacMillan-Piper's rent is below average for Sodo, Liebman maintains, and he plans to more than double it when the company's lease expires in 2010. That may drive MacMillan-Piper and its 200 employees out of Seattle, said company President Steve Stivala.

Nickels is concerned that MacMillan-Piper's plight will be repeated over and over in Sodo and other parts of the city, with landowners chasing industry out because they can get higher rents from office and retail tenants.

To suppress land speculation, Nickels has proposed new rules that would further restrict commercial development allowed on an industrial lot. His plan would reduce maximum office space from 100,000 to 10,000 square feet, except for offices related to industrial use. Nickels would roll back retail space from 75,000 to 10,000 square feet.

Property owners say the mayor's dramatic changes aren't warranted. They say the threat to industrial jobs isn't as great as perceived. Over the last 10 years just 10 percent of the city's industrial land has been lost to commercial development, they say.

They also argue that larger economic forces are driving blue-collar employers to places where land and labor are cheaper. "It's not a question of if there's industry, but where. There are millions of square feet of warehouses being built in the Kent Valley," said Bill Oseran, owner of Seattle Textile Co.

Further, property owners say 21st-century industrial workers will look a lot more like software engineers at desks than steelworkers at a foundry, and rules should be changed to count some office jobs as industrial.

"The notion that low cost drives everything is a load of bunk," counters Dave Gering, executive director of Seattle's Manufacturing Industrial Council. "Boeing doesn't succeed through low-cost labor. That tends to be true about low-end consumer goods, like DVD players, but our manufacturing base in Seattle makes capital goods -- industrial equipment, trucks, boats."

Gering says Seattle manufacturing and industrial companies had sales of $31 billion last year, almost as much as Boeing reported in commercial-airplane sales.

While much attention has been focused on Liebman, Gering says the real problem is the city's zoning code, which allows more commercial encroachment in industrial areas than cities such as Chicago and Portland do. "Henry is like gasoline on the fire, but the real fire is the zoning code," Gering says.

Backers of Nickels' plan, such as Gering's group, want the City Council to act soon before more industrial land is lost or developers scurry to build office and retail buildings under current rules.

Peter Steinbrueck, chairman of the council's Urban Development and Planning Committee, says he isn't going to rush the mayor's proposal through the council.

"There's no question the zoning code needs to be fixed, but whether the [mayor's] numbers are right I'm not sure. The mayor has proposed a fairly drastic downzone," Steinbrueck said.

Steinbrueck said he is considering alternatives to the mayor's plan, such as increasing the amount of industrial development allowed on a lot, rather than decreasing other uses.

Steinbrueck, who is leaving office this year, says he may not finish rewriting industrial-land policy this year. He doesn't believe a year of review, like the council took when revising downtown zoning, will be harmful.

"We were under tremendous pressure on downtown zoning. We were told we were going to miss the business cycle. But it didn't happen. The sky didn't fall."

Bob Young: 206-464-2174 or byoung@seattletimes.com