When a global company is headquartered in your city, the potential for business bragging rights is boundless.
Such is the case with Issaquah, which hosts Costco, the world’s second-largest retailer (behind Wal-Mart), and a company with more than 750 stores and 92 million members worldwide. The company opened in Kirkland in 1983, merged with San Diego-based Price Club 10 years later, and moved its corporate headquarters to Issaquah in 1994.
For Issaquah civic leaders, having Costco in their backyard is a distinct point of pride. That’s a feeling that appears to be mutual for Costco.
“When we merged with the Price company, we doubled our size overnight,” said Jackie Frank, a 25-year Costco veteran and vice president of the company’s real estate division. “We realized this little rental space in Kirkland was not going to cut it. The opportunity came up to acquire 30 acres in Issaquah, and then we started expanding.”
Costco went on to construct two more buildings and a nine-story parking garage on its Issaquah campus. A recently inked agreement will allow the company to add 1.5 million square feet of office space to its campus over the next 30 years. In addition, the company paid $23 million of a $44 million project to extend Southeast 62nd Street, allowing improved traffic flow in, out, and around its campus.
Today, Costco employs approximately 5,500 people at its corporate headquarters.
“We love it here,” said Frank. “Issaquah is a great community. It’s definitely our home.”
Long before Costco’s arrival, however, loggers and miners drove the area’s economy. One-hundred and twenty-five years ago, some 500 residents populated what was then the town of Gilman, which later became the town of Issaquah in 1899, and finally the city of Issaquah in 1959.
So far this decade, the population has grown by nearly 5,600 people (or 18.4 percent), largely due to two master-planned urban villages — Issaquah Highlands and Talus — and a series of annexations.
Approximately 37,000 people live in Issaquah, which is tucked into the picturesque Cascade Range foothills, hemmed in by three mountains (Cougar, Squak, and Tiger — a trio of peaks that help comprise the Issaquah Alps); Lake Sammamish; and a busy, noisy ribbon of Interstate 90 that slices through the city.
Two miles from City Hall, and perched some 500 feet above downtown, the Issaquah Highlands urban village is home to an estimated 10,000 residents, and includes a major transit center, shops, restaurants, a movie theater, and even a large hospital.
If you visit downtown Issaquah today, you will find the city still has a tendrilled connection to its early history: Two dive bars (H&H Saloon and the Rollin’ Log Tavern) have been pouring drinks for more than 85 years, and the former Shell gas station, circa-1940s, was preserved and is home to the Downtown Issaquah Association.
The city’s business past comfortably comingles with modernity, as Microsoft, SanMar, Siemens, and Swedish Hospital have opened offices in Issaquah. The presence of these companies means Issaquah’s ebb-and-flow population of workers expands and contracts every day: According to city officials, about 14,000 residents leave the city each day to commute to work, while about 21,000 people commute into the city to work (about 1,500 residents both live and work in Issaquah).
All this makes Sound Transit Link light rail service, scheduled to reach the city by 2041, an important tool for keeping pace with the city’s growth.
While Costco is Issaquah’s biggest economic draw, the city views its potential for tourism as huge.
Cougar Mountain Zoo, Lake Sammamish State Park, a salmon hatchery, The Village Theatre, Gilman Village, and the Historical Train Museum & Depot draw visitors to the city. The Downtown Issaquah Association hosts more than two dozen events annually, populating the city’s sidewalks, restaurants, and parks during art/wine walks, live concerts, and festivals.
A recent study offered several recommendations to further boost tourism, one of which was to use lodging tax revenue to create a Visit Issaquah organization and hire a full-time director, according to Tim Dutter, the city’s economic development manager.
In May, Issaquah City Council approved the creation of a Destination Management Organization (DMO), and a panel has been formed to nominate the DMO’s initial board, according to Dutter. A board is expected to be established later this month, and it will be tasked with forming bylaws, hiring an executive director, and creating a strategic plan.
“We’re extremely excited about this new organization,” said Dutter.
One new addition to local tourism is Trailhead Direct, a shuttle service sponsored by King County Metro, King County Parks, and Seattle Department of Transportation that connects Seattle and Bellevue residents to Mount Si, Mailbox Peak, and Issaquah Alps trails. According to King County officials, approximately 900 hikers used the service last year.
Has Trailhead Direct had any impact on Issaquah’s economy?
“It’s a great question,” said Keith Niven, Issaquah’s economic and development services director. “Although we do not have any data or economic information as yet, we are hoping to see some positive impacts as the program moves into its second year.”
Meanwhile, a 24-page report compiled by city officials offers some insight into commercial, residential, and retail projects in the development pipeline. Notably, the city has issued construction permits for two dozen projects that range from a new middle school to mixed-use developments to senior housing.
According to Maggie Slone, director of operations at the Broderick Group, a commercial real estate brokerage company in downtown Bellevue, at the end of 2017, Issaquah had 6 buildings with about 917,083 square feet of Class A office space. Of that amount, approximately 106,646 square feet (or 11.6 percent) was vacant and available for lease. “All Class A office space is currently leased, so there is no available space,” she said. (NOTE: The Broderick Group recently reached out to 425 Business to note the original data set provided was incorrect, as it included an area much larger than Issaquah. This article has been updated to reflect the accurate data, according to The Broderick Group.)
Four projects being considered for future development would create nearly 1 million square feet of new office space. Mercer Island-based TriMet Development’s Talus Corporate Center could add 306,000 square feet of Class A office space, while Issaquah-based Rowley Properties’ Hyla Crossing could create 638,000 square feet of Class A office space, according to Slone and the Broderick Group.
If built, perhaps these buildings could draw another company like Costco to establish its headquarters in town, and give Issaquah even more reasons to brag.