Seattle Investment in SLU Pays Off
Taking a walk around SLU will show you that the area is booming with development, but is this development more or less than what was projected almost 10 years ago? What sectors are growing most rapidly? Is job growth exceeding projections? How much money is streaming into the City of Seattle as revenue from taxes?
The South Lake Union Development Update by Michael Mann of Cyan Strategies and Dr. Paul Sommers of Seattle University compares the actual redevelopment that has occurred in SLU against projections made in a similar report by Sommers almost 10 years ago. In the original report, Sommers analyzed growth projections for partial and full build-out scenarios.
The good news is that, despite the downturn in the economy, actual activity in SLU from 2004—2010 exceeded the most optimistic projections:
- Office sector development has exceeded the full build-out scenario by over 50%
- Biotech is also exceeding full build-out
- Retail space development is at 99.7% of full build-out
- Housing development is at 87% of full build-out
- Job creation is 29% greater than full build-out
- Property tax, B&O tax, sales tax and utility tax have all exceeded full build-out projections and have generated over $35 million in tax revenue, higher than the $29 million projected for full build-out.
"One of the reasons the report was commissioned originally was to figure out what the benefit of SLU development would be to Seattle taxpayers in the way of increased tax revenue," said Mann. "It is encouraging to see that decisions made—like Cascade Park, SLU streetcar, SLU Park, zoning changes and the Mercer Project—have resulted in increased tax revenue, because those things attracted development."
Mann, who was working for the city when the original report was commissioned recalled, "It was a big debate in the early 2000’s—what is the appropriate level of city support?" He added, "The initial report encouraged the city to invest in a robust amount of support, based on the projected tax revenues. It is encouraging to see the results of the city’s support and to know that the investment in SLU was a wise use of the city’s resources. Imagine, for example, what would have happened if Amazon did not have a place in Seattle to move to in order to consolidate their offices and they moved to another city."
Mann said that the report looks at what is going on right now, projections are still speculative and that he believes that the city would be well-served by another update in the future. He is optimistic, however, and said, "I think that development has reached a tipping point in SLU and enough has been developed to give confidence that the rest of the undeveloped properties will be built out. There is some very valuable land."
The 23-page report summarizes the growth history of the SLU neighborhood from 1998 to present and contains multiple analytic tables for projections on development by sector, jobs, and tax revenue. Mann believes that the study is important because it validates the city’s early investment in SLU that has resulted in development that has created tax revenue for the city. The report was also featured in a recent Puget Sound Business Journal article.