My notes from online event today: “Straight Talk: Future of Downtown Bellevue”

Posted on January 7th, 2021

My notes from online event today: “Straight Talk: Future of Downtown Bellevue”

This morning I attended an online event assembled by the Puget Sound Business Journal regarding the Future of Downtown Bellevue.   The special guest was Kemper Freeman, Chairman and CEO of Kemper Development Co.  Panelists included Lynne Robinson (Bellevue Mayor), Joe Fain (President of Bellevue Chamber of Commerce), Patrick Bannon (President of Bellevue Downtown Association), and Majdi Daher (CEO of Denali).  I took some notes below for those that are interested in the topic:

 

Notes from discussion with Kemper Freeman

 

  • Amazon and Microsoft are a huge boost to our office market
    • Amazon building the biggest office building ever in downtown Bellevue
      • Over 25,000 jobs alone from Amazon are being created with the additional office space in the downtown core.
    • Microsoft is doubling space at headquarter campus.  They have space for 53,000 employees currently and are planning on doubling capacity with major construction.
      • Because of Covid-19, they have created more space per employee in the buildings
    • T-Mobile: Sprint merger
      • 38,000 employees for T-Mobile currently with at least 25,000 more coming to the Eastside
    • Downtown Bellevue office space will double in size in less than a year from 10 million square feet to 20 million square feet
    • Concerns for keeping up with the level of growth that quickly?
      • City of Bellevue, King County, Metro, Sound Transit have all never dealt with this to meet the demand
        • As Covid-19 settles down, traffic will get very bad (construction taking place as well in the core)
        • Need to continue to look more at transportation needs
        • Need to make sure we have housing on all income levels
      • Changes in trends on what people are looking for homes in Bellevue?
        • Looking for great restaurants/bar scene/shopping.  The social environment is very important.
        • Great public and private schools options.
        • Land is more expensive, vertical is more expensive, there are artificial restrictions (Urban Growth Boundaries) which is opposite for what we need for affordable land
      • We have not done enough to move people from North end or South end to be able to get to Bellevue faster (and affordably)
      • He is expecting more local taxes which will make solving these issues easier

 

Panel Discussion

 

  • Impact of Covid-19 on Bellevue
    • Transportation volumes decreased to 30% or normal in Spring of 2020
    • Transportation volumes returned to 70% of normal volume in Fall 2020
    • Everyone is working hard to support + advocate local businesses in Bellevue
    • Large employers having been supportive!
    • Largest issue: lack of office community
    • Bellevue has a very functional and well-run government which has helped Bellevue to recover quicker than other communities in the country
    • Slowly rolling people back into offices – essential vs non-essential
      • Allowing employees to make the decision ultimately to provide a safe/healthy environment for businesses
      • Encouraging employers to not force the issue and engage with employees
    • How do you plan ahead for growth and gradual return of people?
      • Continue to have major developments but is an issue
        • May not have anticipated the growth from several large companies
        • Excited about growth and what is in the pipeline but definitely have to continue working on infrastructure ahead of the growth
          • Planning major transportation projects, housing for all incomes
          • Challenge: 10% of people who work in downtown Bellevue live in downtown Bellevue
            • Goal to change this number to 50% – by investing in all things that make Bellevue transportation more viable for people
              • For example, covered sidewalks, urban corridors thru buildings to cover larger blocks, bike lanes
              • Create partnerships with larger employers to create better infrastructure for the growth Bellevue is experiencing
            • Biggest concerns on growth
              • 5G networks, high speed internet, sewer systems, water pipelines (not enough)
                • A lot of complexity and timelines in planning are very accelerated which is a problem – need to be more efficient for all of this demand
              • Traffic – younger workforce, amenities for the younger workforce
              • Leases – price points for smaller leases are getting very expensive
            • Zoning changes
              • Downtown Bellevue up-zoning has already occurred so looking at other areas – Wilburton, Factoria, Eastgate (outside areas)
            • Housing/schools strategy for Bellevue future
              • Important to look at generational decisions
              • Local decision making with the community from previous generations and what we see now to define what the quality of life looks like for future decisions in housing and school system
              • It will be interesting to look at how employers will see how employees adapt to coming back to the office culture post-Covid-19.
            • How does Bellevue look at what has happened in Seattle and try to avoid/think more strategically from their mistakes?
              • Differences in political issues but still need Seattle and to work off of each other (not a competition between both cities)
              • Bellevue is considered more business friendly.
              • Similar hits in traffic trips for both
              • Coming back to life faster in Bellevue compared to Seattle
            • What’s the plan for permit volumes?
              • Looking into hiring more people to process permitting faster (a lot of online permitting implemented to speed up the process)
                • A lot of development occurring so need to speed up process!
              • Future of office space
                • Focus on residential to have high quality/high speed internet
                • Office space: enable folks to work from home and have a say in what works best for them.
                • Opportunity for companies to look at their office space to have these collaborative tools and have them be able to bring these tools home to be connective (no matter where employees are).
                  • Belief that it will be a hybrid of working from home and in the office.
                • Companies will be need more space per capita moving forward – transform/evolve something better in work space than before – but it will take time
              • Affordable spaces for small businesses
                • Affordability will continue to be an issue in retail spaces
                  • Working on retail standards that will open opportunities for these small business, continue on retail recruitment (understand what the community wants to create a culture/community that will be a magnet)
                • Downtown Bellevue is $6.50/sf more expensive compared to downtown Seattle
                  • Covid-19 may have helped many businesses looking for spaces before now possible where if the pandemic did not occur, it wouldn’t be as possible
                • Homelessness issue
                  • Work regionally with local partners to address this population
                    • Most important goal: getting children from this population into stable housing – using funding from state
                  • Just announced: Amazon will be preserving multi-family housing for low income families in Bellevue.
                  • Making the spectrum for affordability in Bellevue higher
                  • Partnering with organizations and large employers to fund the housing for low income families
                  • Men’s homeless shelter in process to be done in 3 years – need to continue to create shelters for this population + future generations
                  • Need to build more affordable housing for our healthcare/teachers/lower income employees
                    • Plan to double population by 2040 in downtown Bellevue alone

 

As always please consider me as a resource for any real estate questions.  Have a great afternoon!

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