Sound Transit’s $3.7 billion East Link light rail project aims to move millions of passengers between Seattle and the Eastside annually when it opens in 2023. But It’s already moved a number of Bellevue businesses.
Chris Powell loves Porsches.
He is factory-trained to repair the high-performance German automobile, spent six years preparing them for the racing circuit as part of the Bayside Motorsports racing team, and is a racer and driving instructor for the Porsche Club of America. Each day, he chooses one of two vehicles to drive to work: a blue 1964 356C coupe, or a black 1973 911S.
Powell turned his passion for Porsches into a business — namely, Chris’s German Auto Service. He opened the shop in the Evans Industrial Park in Bellevue in 1984, starting out as a one-man operation occupying a single station in a row of repair bays. As other independent mechanics left and adjacent bays became available, Powell expanded. By 2016, he was operating four bays and employing four full-time mechanics.
“It’s all Porsches,” said the friendly and plain-spoken Powell. “That’s all I do.”
Porsche collectors loved Powell. He had a good reputation and an excellent relationship with his landlord. He wasn’t anticipating — and didn’t see any reason for — change.
But in 2016, a train forced Powell out of Bellevue. His customers now drive to Redmond to a cluster of light industrial businesses along 151st Avenue Northeast to have their Porsches repaired.
The genesis of Powell’s move occurred in 2008, when Central Puget Sound voters approved Sound Transit 2 (ST2), a multiproject transportation package that included East Link, a $3.7 billion light rail plan that, when completed in 2023, will connect Seattle to Mercer Island, Bellevue, and the Bel-Red area near Microsoft’s campus. It is currently the most expensive active construction project in the Puget Sound region — more expensive than the two-mile tunnel replacing the State Route 99 Alaskan Way Viaduct in downtown Seattle ($1.4 billion), and other high-profile construction projects on the Eastside: Spring District ($2.3 billion), Lincoln Square Expansion ($1.2 billion), and the Southport Hyatt and office campus in Renton ($590 million).
After spending several years considering a variety of route options, Sound Transit’s board of directors selected a final route in 2011, and the process of purchasing property and moving businesses out of the right-of-way was underway following a Record of Decision from the Federal Transit Authority (FTA). According to Sound Transit, the project has forced approximately 150 Eastside businesses to relocate.
Powell said he heard rumors about three years ago that a light rail line would run right through Evans Industrial Park. He didn’t wait for Sound Transit officials to send a letter or show up at his shop. Instead, he hired a real estate agent and began to scout a new location — not an easy task, considering the price of land and his specific needs. According to Powell, it was about 18 months ago that he received official word — a letter from Sound Transit and a visit from the transportation agency’s representatives — that he would have to move.
A customer mentioned there was a space in Redmond.
“My first thought was, ‘Well, gosh; I’ve been here for so long and everybody knows who I am and where I am,’” recalled Powell. “I didn’t want to move too far away from where I was because we were just so well-established.”
But, as the saying goes, it’s hard to stop a moving train, and Powell needed to relocate and re-establish his business: “I worried about having to move out to Issaquah or Woodinville. But eventually I looked at this place in Redmond, talked to the landlord about how it might work, and I was able to secure it.”
Powell’s new location has some pluses.
It’s much bigger. Instead of four segmented repair bays, it’s a wide-open hangar-type building with a total of 10,000 square feet, and an attached storage area that measures 5,000 square feet. “It’s a lot more efficient than the old place,” said Powell. “We sat down and drew up plans and tried to make it for how we wanted the shop to be if we could start from scratch, which we basically were. It’s worked out very well.”
Thankfully, almost all of Powell’s customers followed him from Bellevue to Redmond.
Sound Transit’s property acquisition budget for East Link is approximately $300 million. That money pays for the costs of purchasing property, relocating businesses (and residences) such as Powell’s impacted by the route, administrative and consulting costs, and even some contingencies. Washington state law caps business re-establishment costs at $50,000 per business, and that pays for things such as the increased cost of rent or utilities, repairs, and some tenant improvements depending on the circumstances of each relocation. Moving expenses are separate and not subject to the $50,000 cap, according to Sound Transit Public Information Officer (PIO) Rachelle Cunningham.
Powell said he spent at least four times more than the $50,000 Sound Transit provided to relocate his business.
Sound Transit paid to physically move the shop’s equipment, install a new compressed air system, and move and re-install all the vehicle lifts at his new location. But there were other relocation expenses that Sound Transit either didn’t pay, or that exceeded the $50,000 cap, according to Powell.
For example, Powell said, he had to rent the new place for five months just to get it ready for the relocation, all the while still paying rent on his old location. “That chewed up the $50,000 allocation before anything was done,” he said.
Cunningham responded: “Every relocation is different, and depending on the circumstances, the final business re-establishment expenses may be more or less than the maximum $50,000 allowed under state law.” She added that Sound Transit paid for Powell’s moving costs, which in some cases can be more than the re-establishment reimbursement.
Chris’s German Auto Service was closed for a week while it moved. And the extra lighting and floor finish Powell had at his old place were not paid for by Sound Transit when he installed a similar setup at his new location. He also paid for some upgrades to the new location in order to put it on a par with his old location. “I upgraded some, and I don’t mind spending my own money to do that, but they are the ones who forced me to move,” said Powell. “I didn’t ask to spend that money.”
A MULTIYEAR PROCESS
How do you move approximately 150 businesses to make way for a multi-billion-dollar light rail line?
Very slowly, it turns out.
After voters approved ST2, Sound Transit spent the next few years designing several alternative routes and sharing these plans during public meetings. Sound Transit’s board of directors eventually settled on a 14-mile, 10-station route in 2011. After receiving the Record of Decision from the FTA, engineers finalized the design, and Sound Transit identified which property owners and business owners would be impacted. Sound Transit staff made a series of requests for authorization from its board to begin negotiations to purchase land that sat in the right-of-way and reach out to business owners to begin the process of relocation.
“Relocation, especially business relocation, can be very complicated,” said Sound Transit director of real property Kevin Workman. “The overwhelming majority of companies were able to make the move. Generally, if it’s a valid going concern and they are operating a profitable business, we are usually able to relocate them successfully.”
In dealing with property owners, Workman said, offers are made based on fair-market values, and Sound Transit tries to negotiate a voluntary acquisition. “If we get to loggerheads with a property owner and we can’t come to an agreement on the value,” he added, “then the next step is to go into the condemnation phase, and everybody is entitled to their day in front of a judge.”
Sound Transit has acquired the majority of properties needed to build East Link, according to Workman, with “about 20-some-odd properties” still in condemnation. “All of those should be settled and completed by the end of this year,” he said. “There is always that outside chance that some of these things could drag out into early next year. But we anticipate having it settled by the end of the year.”
The process might be winding down in Bellevue, but it will be repeated in other parts of the Eastside beginning late this year or early 2018. In November, voters approved ST3, which will bring light rail service to Redmond in 2024 and Issaquah in 2041.
A COURTROOM GRAND JETÉ
Pacific Northwest Ballet executive director Ellen Walker said she first learned three and a half years ago that the organization’s Francia Russell Center would need to relocate by the beginning of August 2016. That seemed like plenty of time to find a new location, but she soon found out the organization would be embarking on an arduous search for a new home — one that would wind up in a series of courtroom battles between Sound Transit and the arts organization.
The Francia Russell Center, one of two ballet training academies Pacific Northwest Ballet operates (the other is the Phelps Center in Seattle), opened in 2002 at 13440 N.E. 16th St. in Bellevue, in a light industrial and warehouse hub centrally located between Bel-Red Road and State Route 520. The Center offers training for aspiring ballet dancers, as well as classes and conditioning programs for adults. It has grown into a thriving community center for Eastside families, with more than 1,000 young people enrolled in classes between the two schools at any given time, and another 200 to 300 prospective students on a waiting list. The school is highly regarded as one of the top ballet training institutions in the United States.
Walker looked at 24 potential relocation sites and found it challenging for many of the same reasons as Porsche mechanic Powell. “We had a really difficult time because real estate in Bellevue is so limited in terms of what our needs are for a space,” she said. “An empty warehouse is really good for a school, but they are incredibly expensive to build out, and there are fewer and fewer warehouses available in Bellevue.”
Pacific Northwest Ballet and Sound Transit disagreed on the amount of compensation for the loss of the school. The issue was contentious, reported on at length by local media, and resolved through a combination of mediation and appearances before a judge. Sound Transit argued Pacific Northwest Ballet should be reimbursed for the tenant improvements the organization made when it opened the Eastside dance school in 2002. Those improvements included specially designed wood floors to absorb the dancers’ leaps, high ceilings, barres, walls of mirrors, and other modifications necessary for the school, and cost nearly $4 million. Pacific Northwest Ballet, in turn, argued Sound Transit should pay nearly $9 million in just compensation for the loss of its school and to pay for the construction of a new school. In January 2016, a judge sided with Sound Transit.
According to Sound Transit PIO Cunningham, the matter was settled through mediation, and Sound Transit paid $5 million to Pacific Northwest Ballet. The transportation agency also will pay to relocate the school’s personal property.
The new Francia Russell Center will cost more than $12 million to build, according to Walker. It’s not that the new school is that much bigger than its original location. “The cost of construction is huge right now, especially in Bellevue and Seattle,” she explained. “There’s very little competitive bidding happening, and the cost of construction and materials has dramatically increased. It’s a really tough process.
“The condemnation process is pretty complex, and it’s a burden on an organization that is already very lean,” she added. “It’s taken up a tremendous amount of our time and resources over the last three years. It’s incredibly time-consuming and challenging.”
In the end, Walker found a new home for the center a block away, at 1611 136th Place N.E. Pacific Northwest Ballet signed a lease in January 2016, and spent $500,000 to retrofit a temporary location at the Curran Business Park, located at 1525 132nd Ave. N.E. Meanwhile, some students have taken classes at the temporary location, some students have moved to the Phelps Center in Seattle, and other students simply dropped out of classes, according to Walker. She hopes they will return when the Francia Russell Center opens in its new location in September.
Would it have been easier to just close the Bellevue location and consolidate operations in Seattle?
“That would have been an easier choice, for sure,” said Walker. “It has been a significant challenge to find the resources to stay on the Eastside. But it really felt like we would be abandoning an important constituency and leaving a void in the artistic life of the Eastside if we just packed up and went back to Seattle. Ballet training may seem like a discretionary activity to some, but our school is bursting at the seams, and it’s an important part of the cultural life of the Eastside.”
A BETTER LOCATION
If you visit Sunmark Upholstery manager Paul Valentine, the first thing he will show you is a sign. It’s hard to miss, actually — a custom-made, back-lit, red-and-white marquee that announces its presence near the corner of Northeast Spring Boulevard and 136th Place Northeast in Bellevue’s Bel-Red area.
“I love that sign,” he said during an interview in early March. It was 5 p.m. and Valentine was in the process of locking up the shop for the evening. “A good sign tells people how professional you are.” He pulled down rolling service doors where cars and boats can be pulled in for service, and locked a gate that leads to adjacent vehicle storage. He pulled up two chairs in the lobby and settled in near an area filled with displays of samples and swatches.
Sunmark Upholstery was founded in 1980, and for the past seven years operated out of a building just east of downtown Bellevue and Interstate 405. It was a good location off busy Northeast Eighth Street, across the alley from Pumphouse Bar & Grill, and next to Whole Foods Market — but a little too small for Sunmark’s purposes. It shared the building with a dance studio, gym, and other tenants, and there wasn’t much room for large vehicles or boats. And the signage wasn’t great, either.
It was about three and a half years ago that Valentine started hearing rumors that East Link’s path was going to run right through his shop. When Sound Transit officials showed up at the shop one day, it was official. He and the rest of the businesses in the building had to move.
“We were really concerned when we made this move,” said Valentine. “We had considered going to Redmond or Issaquah, but we decided it was better to pay a little more rent to stay in Bellevue and keep our customers.”
As Valentine started to look for new locations, he established criteria: a building in Bellevue with ample room to work on large vehicles and boats, plenty of space for parking and storage, and a stand-alone structure Sunmark Upholstery didn’t have to share with other tenants. He eventually settled on the current location in the Bel-Red area.
Rent at the new location is more expensive, but it has features the old one lacked — a bigger showroom, a breakroom for the company’s four employees, separate bathrooms for customers and employees, lots of storage space, an electrical system with plenty of power to operate machines, and two wide service bays. The old location was 1,800 square feet, whereas the new location is just over 4,000 square feet. “The whole time we were at the old location, we worked on one boat,” said Valentine. “We worked on six boats last summer here.”
Valentine knows each business has its own experience — good or bad — relocating due to East Link. But he is pleased with the move so far. In a way, the $50,000 in relocation money provided by Sound Transit allowed Sunmark Upholstery to upgrade its business while remaining in Bellevue. “The move was perfect for us, but we’re not a huge business,” he said. “If we had to do it on our own, it would have buried us.”