When a basketball arena moves into the neighborhood, what happens?
Chris Hansen’s proposed home for an NBA franchise (and maybe a hockey team, too) is still in the arguing phase, but already there is considerable speculation and concern about the impact of the arena’s construction, according to a recent research report issued by the real estate services firm Kidder Mathews.
It’s not just the arena, for which Hansen has already spent nearly $54 million in assembling properties, the report notes. It’s also the push for more hotel rooms, more apartments, more nonindustrial uses in what is one of Seattle’s last large concentrations of manufacturing and warehouse operations.
Those trends are meeting with resistance. The Port of Seattle and the longshore union are already on record opposing the arena’s siting just south of the Safeco Field parking garage. (Kidder Mathews says there’s a large market for leasing yard areas near the port.) Industrial firms in SoDo were unhappy with the encroachment of retailing, residential, entertainment and related activities well before the arena proposal surfaced. And as the Kidder Mathews report notes, the city has maximum size restrictions on nonindustrial uses in a designated area of SoDo (the arena itself is proposed for an area where such activity is allowed).
What Kidder Mathews is predicting, and what the port and some industrial tenants of the area fear, is a tight local real estate market getting even tighter—and more expensive. Kidder Mathews says the 3.44 percent vacancy rate easily bests other markets in the Puget Sound region. By comparison, South King County, the state’s largest industrial market, had a 6.5 percent vacancy rate in the fourth quarter of 2012.
The long-term impact, according to Kidder Mathews, will be “a loss of industrial supply.” That echoes an assertion made in a Seattle Planning Commission report last summer: “The proposed arena is likely to put further conversion pressure on nearby manufacturing and industrial business.”