Skagit’s Slow but
Stable Construction Market
Smaller Projects Abound, Despite Dip in Economy

by Michael Barrett

The sagging stock market without doubt has affected the commercial real estate market nationwide, but if truth be told, Skagit’s situation may be, at least at present, a little more stable and less volatile, say experts.

For one thing, there’s a crying need for leasable retail and office space in this county, says Clay Learned of NorthWest Properties Commercial Division in Mount Vernon.

“We do have a glut of lease space for industry — especially the metal and tilt-up structures,” he says, referring to sites in Burlington and Bayview Business Park. “But we have very little retail space for lease and we have very little office space for lease.”

Another aspect involves the projects just completed or under way, and they run the gamut, from big-box retail stores (Costco opened last August) to health clinics (Northwest Orthopaedic Surgeons is nearing completion). More are coming soon, and they are not small commitments.

“In sales, I was down less than 50 percent from usual last year, amounting to two-thirds my normal volume,” admits Learned, one of the top commercial Realtors in the county, a $10 million-or-more-a-year salesman who holds both the coveted Certified Commercial Investment Member (CCIM) and Society of Industrial and Office Realtors (SIOR) designations.

Even so, some of the properties were significant: Northwest Orthopaedic at Roosevelt and Continental Place in Mount Vernon, Etera’s main office at Peterson Road and Highway 20 in Burlington and the Preview Property building on College way — “a total of 34 projects in all,” he says.

The worst month was April when Learned saw 12 deals fall through in 14 days — “and I close about 95 percent of the time,” he adds. “Barnes and Noble alone bagged 15 deals nationwide last year.”

But here in Skagit County, the wheeling and dealing continued. Properties were purchased, permits were applied for and gotten, preloads were stacked and, in some cases, footings actually put in.

 

A plethora of projects

In the county itself, Nordic Tug just dedicated its new 33,000-square-foot lamination plant at the Port of Skagit’s Bayview Business and Industrial Park. Skagit Valley Resort and Casino opened its gala hotel, convention and entertainment center on Bow Hill and another phase is in its early stage. The Twin Bridges Marina, despite a snafu over water with the City of Anacortes, got its building started and completed recently.

Other county construction sites include the Raspberry Ridge housing scheme, Skagit Farmers’ Supply extension on the Conway frontage road and Dimensional Communications new headquarters on Anderson Road south of Mount Vernon.

“There’s a ton of things going on out at the refineries,” says Tim DeVries, plans examiner at the Skagit County Planning Department. “Right now, we don’t have a lot of big projects.”

Another county examiner, Al Youngsma, says smaller jobs are getting under way, including a 7,500-square-foot office on Padilla Heights, a 2,500-square-foot office on Josh Wilson Road and a 3,000-square-foot building next to Mount Vernon Towing on Cedardale Road in south Mount Vernon. All of these projects, he says, are within Urban Growth Boundaries, where only commercial construction now can take place.

In the cities themselves, Anacortes’s biggest commercial construction site is between Fourth and Fifth on O Avenue where a new cinema is going in. Footings were poured in March. Within sight of that is the Majestic Hotel, which was practically gutted by fire earlier this year. That will be a major renovation project when it’s time.

Other plans, according to Michelle Deaton at the Anacortes Planning Office, involve a new restaurant and condo complex at the Fidalgo Resort, which has been approved, and possibly a new Jack-in-the-Box restaurant at 22nd Street and Commercial Avenue, which was on hold mid-March.

Jim Sherwood, building official at the City of Burlington Planning Department, says many things are going on in his jurisdiction.

“Of course, we have the Haggen Food store, the new police station and Bates Abrasives’ new plant,” he says.

Haggen resubmitted plans for approval recently and activity can be seen on the site where infrastructure is being readied. Ebenal General contracting firm got the bid on the new police department headquarters across from the new roller-skating rink at Spruce and Cedar streets and wasted no time in starting infrastructure work there. Bates’s new building will soon go into the Burlington Hill Business Park north of the city.

Other designs in Burlington Sherwood mentions include a three-story ministorage unit on Fisher Lane and the nearly completed Creekside Independent Retirement and Full-service Assisted Living center being built by Exxel Pacific for Ed and Brad Watson, owners of Mountain Glen in Mount Vernon.

A major retail scheme immediately across South Burlington Boulevard from the main entrance to Cascade Mall will include anchor Pier 1 and other smaller stores, according to Learned, who was handling the property sale.

 

More eateries expected

Reports of a slew of restaurants considering property in the Cascade Mall area continued through the first quarter of 2001. Among potential eateries mentioned by planners and others, none of them actually confirmed, were: Applebee’s, Olive Garden, Tony Roma’s, Taco Time, International House of Pancakes and more.

In Mount Vernon, Amy Kebbekus of that city’s Building/Community and Economic Development Department, listed a number of projects under way or about to start.

Among them are the new eTech center on Continental Place where the state Department of Social and Health Services and Cinema 5 used to be, a scheme headed by John Ellis of Century 21 Alliance, developer John Mitzel and Paul Schweikert, owner of WebEKG.com; an addition to Skagit Valley Hospital Emergency Room; renovation of the Lincoln Theatre whose shell is on the list of National Historic Buildings; and Skagit Polaris’s new home on Freeway Drive near Stewart Street, being built by Axthelm Construction Co. of Mount Vernon. The aforementioned Northwest Orthopaedic Surgeons was framed in and ready for finishing work the second half of March. Nearby, Kebbekus says, will also be built the Continental Place Apartments with 50 units.

Ellis’s two approved plans in Sedro-Woolley, both at Highway 9 and Highway 20, top that city’s list of commercial construction, according to building inspector Ardell McCombs. One is the new U.S. Forest and Park Service building, which was in the framing stage, and the other was a strip mall, still in the planning, McCombs says.

The 20,000-square-foot Sunset Tower Plaza, owned by John Falavolito as headquarters for his Consolidated Cellular company, was completing exterior work and looking for a few more tenants.

Another major plan included renovation of the Bingham Bank Building at Metcalf and Woodworth streets. “They’re trying to get it back to as close as it was originally,” McCombs observes.

“I think it’s going to hit all at once,” McCombs predicts about a Sedro-Woolley building boom. “It’s either feast of famine here.”

He also mentioned the ongoing Safeway grocery store plans across Highway 20 from Sunset Park, a project that hasn’t been going anywhere. A small shopping mall also has been discussed for that area, he adds.

Even with all that, Learned believes times are slower here in commercial real estate and construction.

“I don’t think there’s a lot going on,” he states. “You have to look at the broad view. You can look at the market and see we’re not volatile (like the rest of the country). We’re stable. We brought in Costco last year, with 171,000 square feet. That was two years in the making.

“I run my business by my gut,” he continues. “It’s not something you can buy, teach or train for. You have to follow the basic business principles — you have to have skills and integrity. That’s such a powerful word, integrity. You have to stay within those boundaries. It’s still a people business.”