Spicing Up Development In The Pacific Northwest
Seattle-based Tarragon Development has a commitment to quality projects.
Randall Shearin

Developing projects in the Pacific Northwest is no easy task. But for one developer, it seems to come naturally. With a commitment to the area and the projects that it develops, Seattle-based Tarragon Development is poised to strike more success with its future endeavors.

Tarragon Development's Saffron project was considered very innovative when it opened in the late 1990s. The mixed-use project is built on 4.5 acres in Sammamish, Washington.

“We try to stay close to home and diversify by asset class, in lieu of picking one property type and diversifying by region,” says Joe Blattner, the company's president. “We feel like we get a better diversity, that we can weather out the cycles in the industry better.”

Today, the company's portfolio is 50 percent industrial, 30 percent retail, with the remainder made up of office and residential space. The portfolio varies from time to time based on the market.

In the Pacific Northwest, the entitlement process is a huge component to ground-up development. Blattner feels that Tarragon's commitment to its home area is helping it better form relationships with communities and lawmakers that move entitlements along.

“It's nice to know the people in your own backyard where you are developing,” he says. “We continue look in other regions, but it is nice to have the relationships with permitting agencies and regulatory agencies that help the process along.”

Kent Station is a mixed-use project that Tarragon is developing in downtown Kent, Washington.

“Taking a property from a raw piece of land to one that can be developed is a significant part of development here,” says Blattner. “Every project that we have developed has a different challenge of some type. Lots of times that has something to do with the land transaction or the land entitlement portion of the project.”

But the rewards for doing so are significant, he adds. The Seattle area has experienced tremendous growth over the last 10 years and is poised to experience more growth in the next decade. Job growth is very positive in the region. As a result, Tarragon's new projects haven't had trouble leasing up.

An aerial shot of Tarragon's Lakeland Town Center.

Tarragon holds most of its properties, even interests in those it develops for other entities. The company has maintained an ownership position in 85 percent of the properties it has developed over its 10-year history.

Saffron, the mixed-use project that Tarragon developed in Sammamish, Washington, was considered very innovative when it was developed in the late 1990s. The mixed-use center is at a very busy intersection in a suburban downtown. Built on only 4.5 acres, Saffron has streetfront retail with wide sidewalks. A parking garage sits below the retail, while 100 units of residential are above the retail space. The project's cutting edge design caught the eye of many architects and critics, and residents of the project's multifamily space loved the modern look.

“For us, it is important to look forward in all aspects,” says Blattner. “It shows in the way we design, program and build our projects. We are a portfolio developer who wants to hold all of our projects. We use materials and finishes that you wouldn't use if you were just going to sell it. Our long-term focus lends itself to creating a higher quality development.”

Not your usual community center: Tarragon's Lakeland Town Center in Auburn, Washington, uses unique finishes and touches.

One of Tarragon's most successful retail centers to date is Lakeland Town Center in Auburn, Washington. To see just the tenant list and square footage of Lakeland Town Center, you would think it is a normal grocery-anchored center. However, you must look at the center to see how different it really is. Modern architecture has been incorporated into the center, with elements like exposed wood and other special finishes that give the center a different look. Tarragon also incorporated other retailers, creating more of a lifestyle center than a grocery-anchored center. Lakeland looks like it matches its woody surroundings, rather than stand starkly apart from them.

“For us, it is important that Lakeland is looked at 20 years from now as a state-of-the-art project, just as it is today,” says Blattner.

Tarragon paid close attention to the tenant mix, and continues to watch how the retailers merchandise at the 132,000-square-foot center. Lakeland Town Center has been tremendously successful; the center is 99 percent leased. Lakeland is anchored by regional grocer Top Food and Drug, local restaurant The Rock Pizza & Brewery, Blockbuster, Starbucks, several other restaurants and small retail uses.

“Rather than take a traditional approach, we designed it as a grocery-anchored lifestyle center,” says Blattner. “We used wide sidewalks, plazas, heavy landscaping, weather protection and blade signs for all the retailers. It is meant to be a development where you park your car once and you can cover the whole center on foot.”

Lakeland Town Center, Auburn, Washington.

Tarragon's biggest mixed-use project to date is Kent Station, a project that is being developed on 18.2 acres in Kent, Washington, south of Seattle. Tarragon is working with the city of Kent to develop the property into a project that will have retail, office, residential and academic space. In all, there will be 477,000 square feet of commercial and residential space at Kent Station. Tarragon has signed a lease with AMC Theatres, currently under construction, to locate a 14-screen, 2,500-seat cinema at the project. Green River Community College will locate a branch campus in 22,000 square feet at Kent Station. Phase I of the project, which covers 10 acres, is under construction. It contains 160,000 square feet; 60,000 square feet of that is the AMC cinema. About 22,000 square feet will go to the community college. The remaining 80,000 square feet is primarily restaurants and retail. Restaurants who will locate there are Johnny Rockets, Chipotle, Zao Noodles, Cold Stone Creamery, Duke's Chowder House and The Ram Restaurant & Brewery and Jamba Juice.

“We have tried to strike a balance between local and national restaurants,” says Blattner. “We love the national restaurants from a credit standpoint, but we love the flavor and roots of the local restaurants and the authenticity they add.”

Kent Station is being developed next to a commuter rail station in downtown Kent. The city has built a parking garage adjacent to the rail station that visitors to Kent Station can also utilize after prime traffic hours. The purpose of the project is to add to the offerings of and create an attraction for downtown Kent.

“Kent Station will be a district of downtown,” says Blattner. “Kent has an existing downtown with a main street feel. Kent Station is going to enhance the existing downtown and create more critical mass. The city would like for the district to be an 18-hour city. It will bring people downtown in lieu of having them drive through downtown on their way to a mall that's 10 miles away.”

Tarragon is starting with the entertainment portion of the project because there is a desperate need for it in downtown Kent. Phase I will open by year end. Phase II will start construction this fall and open by the end of 2006. Future phases will be added as demand warrants. Blattner foresees the project being built out by 2008.

Tarragon is also involved with a few multifamily, office and industrial projects in the Puget Sound area. The company is developing the 112,000-square-foot headquarters building for Diadora of America in Kent, Washington, and is in the midst of developing a 370,000-square-foot warehouse for Pacific Distribution Services in Sumner, Washington. The company has recently started construction on the first phase of a 360-unit apartment complex called Palermo, adjacent to Lakeland Town Center in Auburn, Washington. Tarragon has done a lot of speculative industrial development over the years and plans to do more of that in the years to come. The company also has a few sites for retail in mind, mostly in infill locations.

The company generally has the ability and skill sets to manage most of project development in house, from entitlements to construction to leasing and management. However, there are occasions where local expertise is outsourced and contracted to benefit a project's overall quality and success as needed. Financing is also handled in-house. The company has 18 people on staff. It has purposely kept the company small and strived to hire employees for the long-term.

“We're small enough that people have to be a good fit and they have to be in for the long haul,” says Blattner. “We provide ourselves on being very professional and highly thought of in the development community.”