New light rail clears way for an MLK makeover

Mike Hlastala has seen the future. And it runs on rails.

His year-old company plans to build more than 700 apartments and 40,000 square feet of shops a few steps from Sound Transit's Othello Street light-rail station on Martin Luther King Jr. Way.

A trip from Othello to Pioneer Square should take just 17 minutes when trains start running next year. Hlastala figures lots of downtown workers — tired of traffic, $4 gas and $300-a-month parking — will be interested in apartments like his.

"We see this as a great real-estate play," Hlastala says, "and the light rail is a big part of it."

When Sound Transit decided to run the region's first light-rail line down MLK a decade ago, backers predicted it would spark a redevelopment boom in one of Seattle's poorest, most neglected, most ethnically diverse corridors.

Now, at last, that prediction is starting to come true.

Over the past year private, for-profit developers have proposed more than 1,500 condo and apartment units within a 10-minute walk of a rail station. They will be the Rainier Valley's first multifamily projects built without government subsidies in more than 30 years, city officials say.

Much more is coming:

• The Seattle Housing Authority is working on deals to sell nearly five acres at the Othello and Columbia City stations to private developers for "mixed-use" projects: condos or apartments above ground-floor retail.

• The University of Washington has hired a consultant to explore redevelopment opportunities for some of its property near the Mount Baker Station.

• Zion Preparatory Academy, looking to endow scholarships, is considering developing or selling its six-acre campus a block from the Columbia City Station — assuming the private K-8 can relocate nearby.

"It seems like every week a new 'proposed land-use action' sign is going up," says Othello neighborhood leader Leslie Miller.

She and others who live and work in the Rainier Valley await this massive makeover with both excitement and apprehension.

The aging homes and stores that line much of MLK today were built for the car. Strip malls, auto-repair shops and parking lots dominate. Transforming this auto-oriented corridor into a string of new, compact, walkable, transit-oriented neighborhoods appeals to many.

Darryl Smith, a Southeast Seattle activist and real-estate agent, remembers trying to sell houses near Othello to prospective buyers several years ago.

"I kept telling them, 'There will be stores here that you can walk to,' " Smith says. "People have been waiting for this."

But the specter of gentrification looms. MLK is a cornucopia of diversity — Chinese herb shops, Vietnamese video stores, Somali money-transfer offices, Filipino meat markets and restaurants that serve everything from soul food and tortas to goat curry and pho.

Smith and others say rising rents and real-estate prices already are forcing out some businesses and residents and threatening to dilute this rich ethnic stew.

Government officials, community organizations — and developers — all say they want to prevent that, to make sure the valley's renaissance benefits those who are already here.

"We don't want to leave anybody behind," Smith says. "We want to raise all boats."

Other lures, too

Light rail isn't the only reason developers are discovering the Rainier Valley now.

Unlike other close-in neighborhoods, property here still is relatively affordable. Columbia City's revived, historic business district is a draw.

The Seattle Housing Authority has demolished two World War II-vintage public-housing projects, Holly Park and Rainier Vista, and is replacing them with new, mixed-income neighborhoods that are changing the look and feel of long stretches of MLK.

Even so, almost all the for-profit developers who plan to build in the valley say light rail's imminent arrival is a key reason.

The train will appeal to younger people looking to cut commuting costs and live greener lives, says Warren Ballard, a veteran condo marketer whose clients include the proposed Verbena Vista project just off MLK.

In a few years, he predicts, the Rainier Valley will be as popular as Capitol Hill.

No one is betting more on rail and the lure of a less auto-dependent life than Hlastala. "There's going to be a huge number of people who will want to live like this," he predicts.

He talks of his projects, Othello North and Othello South, not just as investments, but as an opportunity to do something right: Put more passengers on the trains. Provide relatively affordable housing. Create a pedestrian-friendly gathering place, a destination, for a neighborhood that now lacks one.

A Seattle native, Hlastala cut his teeth as a project manager for big-time developer Opus Northwest, supervising work on buildings at Seattle's Union Station and the Bremerton waterfront. He left last year to establish his new firm, Othello Partners, with former Opus colleague Steve Rauf, who already was building town houses in the neighborhood.

They hope to break ground on Othello South early next year, Othello North a year later. The twin complexes, east of MLK on either side of Othello Street, each would have about 365 apartments in buildings up to six stories tall, with retail along the principal streets.

Miller and others give Hlastala credit for reaching out to the neighborhood. He let organizers of a December festival celebrating the community's diversity hold the event in the empty church building on the Othello North site.

Vietnamese, Somali and other immigrant community leaders have approached him about providing space in Othello South for a multicultural community center. Hlastala says he's looking for a way to make it happen.

He says he wants to build "work-force" housing, for people who earn between 70 percent and 120 percent of the area's median income, or about $38,000 to $65,000 for a single person. It's a population caught in the middle: too wealthy to qualify for government-subsidized housing, too poor to rent or buy most homes in this increasingly expensive city.

But with land prices and construction costs rising, Hlastala and other Rainier Valley developers say they would have trouble building work-force housing unless the city expands a program that gives developers who provide it a property-tax break.

Work-force housing would meet only part of the valley's housing needs. Its low-income residents already are getting squeezed.

Housing the poor

When the Lao Highland Community Center opened in 2004 a few blocks from MLK and Othello, its location was ideal, says executive director Mey Saelee. Almost all the 3,000 or so Mien, Khmu and other immigrants it served lived in Southeast Seattle.

Today, she says, less than half do; the rest have moved to Renton or Kent. The number of children in the center's after-school program has dropped from 30 to 15.

"This whole area, the value of the property and the rents just skyrocketed," she says. "People couldn't afford to live here any more."

So Lao Highland leaders approached Inter*Im, a nonprofit developer. This summer, after several years of planning and fundraising, it plans to break ground on Samaki Commons, a 40-unit project next door to the community center that will house families earning less than half the area's median income.

Samaki means "community" in Laotian. Saelee is delighted. But Leslie Morashita, Inter*Im housing planner, says financing similar low-income projects will only get harder.

Inter*Im agreed on a price for the Samaki Commons property several years ago. Today, Morashita says, the land would cost twice as much.

City Councilman Richard McIver is among those who argue that allowing higher-density development around the light-rail stations will help keep housing affordable, as well as increasing rail ridership.

Buildings now are capped at 65 feet, tops. "I think it ought to be as high as Belltown," where towers reach 125 feet and higher, McIver says.

But some developers say taller buildings would be more expensive per square foot to build. And even the six-story complexes proposed so far are too much for some neighbors, who fear the MLK corridor could lose what makes it distinctive.

Diversity and disruption

The decaying strip mall Mike Hlastala plans to tear down to build Othello South is a microcosm of both the MLK corridor's diversity and its unsettled state.

A taqueria does a brisk business from a converted school bus in the parking lot, but the building itself is half-empty. A 99-cent store and Muslim meat market moved out several years ago.

The Sang Taing Heng supermarket, which caters mostly to Cambodians and Laotians, remains in business — but only for another month. Proprietor William Sang says the building's owner has told him to be out by May 31, a month before the sale to Othello Partners becomes final.

Sang has no plans to relocate; he's had enough. "I work like a pig — work too many hours, not make money," he says.

Business dropped off badly when light-rail construction disrupted access, Sang says. Mitigation payments from the government-financed Rainier Valley Community Development Fund helped, but his customers haven't come back. Many have moved away, he says.

As Sang liquidates his inventory, Hlastala has just begun marketing retail space in Othello South. He says he hopes some Mom-and-Pop ethnic businesses will become tenants. Even those that don't still could benefit from the new people his projects will bring to the neighborhood, he says.

He and Sang have never met.

Keeping the Rainier Valley's ethnic businesses alive as the neighborhood changes is a big part of Steve Johnson's job with the city's Office of Economic Development. He maintains those businesses represent the valley's future as well as its past.

Diversity is the neighborhood's greatest business strength, Johnson says: If it's lost, light rail's economic-development potential won't be fully realized. "We lose market appeal if we just become another neighborhood."

The battle against business gentrification is being waged on several fronts. The city is funneling $4 million a year into the Rainier Valley Community Development Fund, to provide seed money to businesses and developers whose projects otherwise might not get off the ground.

Johnson's office and the development fund's staff also plan to work with ethnic businesses to appeal to customers outside their traditional niches. Those who adapt as the valley's demographics change will be more likely to thrive, development-fund director Martina Guilfoil says.

With city help, businesses along MLK are organizing their first association, in part to get access to city grants for business-district beautification, marketing campaigns and the like. Linh Thai, an insurance agent involved in organizing the group, says it wants to both capture the opportunity of light rail — and keep it from destroying what's already here.

Johnson puts it another way: "We want to help them ride the wave," he says, "instead of getting swamped by it."

Eric Pryne: 206-464-2231 or epryne@seattletimes.com