by Josh Feit and Amy Jenniges

During his 2001 mayoral campaign, Greg Nickels ran as the neighborhood guy. In fact, candidate Nickels used the word "neighborhood" once every two minutes in an hourlong Stranger interview--contrasting himself with developer guy Paul Schell. "Schell is a developer by training and inclination," Nickels said ["Counting Nickels," Josh Feit, Feb 1, 2001]. "Schell wants to build big things, and that's the legacy he wants to leave. But thousands of people helped write neighborhood plans, and I think that should be the blueprint for how [the city will] spend money.... I think it's time for a mayor to really spend time fighting for the neighborhoods."

Hmmm? Now that Nickels is mayor, he seems to be avoiding the neighborhood plans like the plague and pursuing developer-inspired blueprints all across town: realizing Paul Allen's biotech dreams in South Lake Union, nixing the neighborhood development plan so a mall owner, Simon Property Group, can expand at Northgate, getting rid of that pesky neighborhood lease lid in the U-District, and covering Sound Transit's ass in Rainier Valley.

Nickels seems out of sync with the neighborhood plans. For example, Nickels' $570 million Vulcan wish list for South Lake Union--complete with streetcar, electrical infrastructure upgrade, and Mercer Street expansion to jump-start Paul Allen's development blueprints--drew an angry April 18 letter from city council neighborhood plan guy Richard Conlin and his populist colleague Nick Licata. The pair argued that the Vulcan development proposal needed further examination in light of neighborhood planning goals. Licata drove the point home in his April 25 constituent newsletter: "Job growth in the South Lake Union has far outpaced projections. One must consider whether public dollars might also be spent developing jobs elsewhere. Neighborhoods like Denny Triangle, the International District, Capitol Hill, Ballard, and the West Seattle Junction are falling far below the job growth projections."

Nickels' immediate response to Licata and Conlin's neighborhood concerns was a hasty April 24 2:00 p.m. press conference in South Lake Union, where the mayor cast the pair as antediluvian reactionaries.

The Nickels steamroller follows the right impulses (i.e., jobs, growth, public transit, tall buildings, late-night pizza--all good!), but we have to agree with Licata and Conlin--not to mention Nickels' old campaign rap. Neighbors and neighborhood plans are important. (Heck, the Northgate General Development Plan is granddaddy of all the neighborhood plans.) In that spirit, this week we'd like to offer a reality check on three of Mr. Nickels' "neighborhood" plans. --Josh Feit

Drug Money

Sitting in his 41st-floor corner office at 1001 Fourth Avenue Plaza--three blocks from Seattle's piddly City Hall--Donald Elmer pauses to consider Mayor Nickels' ambitious South Lake Union plan. Hardly a NIMBY naysayer, Elmer's a biotech venture capitalist who'd like Nickels' plan to succeed. However, Elmer--managing partner of Seattle's Pacific Horizon Ventures--has pertinent questions about the project.

The mayor, if you haven't heard, wants to invest--at the behest of Paul Allen's Vulcan--about $570 million to make South Lake Union a biotech hub that would create 20,000 new jobs by 2033 (according to Vulcan) and bring in about $900 million in city revenues. Vulcan is the keystone property owner in South Lake Union, with 50 acres worth at least $200 million. The Nickels/Allen vision is a 21st-century mixed-use community of research labs, condos, apartments, a streetcar, retail stores, and hotels--mostly between Denny Way and Lake Union. Think: the groovy, futuristic domed mall-city in Logan's Run.

Not so fast. Elmer--a fiftysomething guy with floppy, receding hair and round glasses, whose black desk is littered with newsletters like the Private Equity Analyst--may have bad news. Elmer published a report for Governor Gary Locke last November that highlights "questions about the assumptions on which [the South Lake Union plan] is based." Bottom line: If the city builds it, can biotech afford to come?

As a 2002 Brookings Institution report on U.S. biotech warned, "The critical factor in the development of a biotechnology industry is... the availability of continuing private-sector investment.... Most biotech firms operate at a loss, spending large amounts on research and development for several years in advance of earning any sales revenue. These money-losing biotech research firms depend on venture capital investments."

Putting Seattle under the microscope, Elmer points out, "There are three legs to the stool to make this happen: property owners like Vulcan, research facilities like UW, but there's one missing piece--where's the capital? It's appropriate to ask: Who's making the investment [in the companies supposedly coming to South Lake Union]?"

Elmer says biotech firms cannot survive without venture capital--to the tune of $3 billion over a 10-year period. Problem is: Elmer says the cash spigot is off right now. "The capital markets have retrenched," he says bluntly.

Elmer goes on to suggest that Seattle, in particular, may be dreaming. "What is lacking," Elmer's report states, "is the political will and institutional infrastructure, in place in other states, to catalyze the necessary capital formation." Elmer points out, for instance, that North Carolina took legislative action to earmark tobacco settlement cash for biotech venture capital, targeted at the state's venerable Research Triangle near Duke University. (PS: Research university Duke ranks higher than the UW ["Bio-Bust," Josh Feit, April 3].) Elmer also cites similar recent public and civic capital venture commitments in biotech hubs like Philadelphia and Saint Louis. "I don't see the same level of commitment here," Elmer says.

Steve Gillis, cofounder of Immunex and current head of Corixa, agreed with Elmer when he answered the "What's missing in Seattle's biotech future?" question earlier this month in a Seattle Times interview. "Capital," Gillis said. "We have a fairly small venture-capital base in Seattle."

Elmer explains that the giant sums of investment needed to make biotech companies succeed--which could only be supplied by the five most endowed locals (the UW, the city, Paul Allen, Bill Gates, and the state)--have historically flowed to investment hubs like Silicon Valley, Boston, and San Diego (the exact cities identified in the Brookings report as ahead of Seattle in the biotech game.)

All of this wouldn't worry Elmer if the South Lake Union plan merely focused on housing existing (and stable) institutions like the UW. The risky plan, however, calls for upstarts to pay rent in South Lake Union. Josh Feit


A battle is starting to brew in city council chambers over neighborhood plans in Northgate. Neighbors already count five sympathetic ears in the city council, leaving just four to support Mayor Nickels' ambitious Northgate development plan. The Northgate plan could ultimately be a Zarkeresque embarrassment for the mayor's overall neighborhood agenda if the council squashes it.

On March 17, Nickels announced a plan to abolish the 1993 Northgate development plan--put together by neighbors and the city, in a precursor to the neighborhood planning process--that is supposed to guide development of large properties like the Northgate Mall. The mall's owners, Simon Properties, and the mayor argue that the "General Development Plan" (GDP) has stifled Northgate growth. The mayor also unveiled a development agreement that lets Simon expand the mall once the GDP is gone. "Removing these regulations will allow new investment at Northgate... [and] provide jobs and a stronger tax base," the mayor said. He may be on to something with the GDP--in the past 10 years, nothing has been built under its guidelines, because they are so strict.

However, neighbors--who suspected for months that the mayor's office was quietly negotiating with Simon--were immediately angry: They don't want the GDP completely tossed out, and they aren't happy about the mall's expansion plans. "We feel the mayor's plan is extremely shortsighted, and wrong for Northgate altogether," says Jan Brucker, chair of Citizens for a Livable Northgate. "The development guidelines are too important to sacrifice for the nebulous and speculative gain Simon offers."

Northgate folks have joined up with other neighbors affected by Nickels' neighborhood agenda--folks in the U-District, South Lake Union, and Rainier Valley--to lobby for the residents of all four neighborhoods. The group, which has been meeting at John Fox's Seattle Displacement Coalition offices in the U-District, is planning a neighborhood summit to tell Nickels just what it thinks about his neighborhood agenda. "The neighbors need to weigh in here too," Fox says. Amy Jenniges

Rainier Valley Redevelopment Ruse

Nickel's list of five priority neighborhoods has become his mantra: Jump-start biotech in South Lake Union, expand Northgate Mall, add housing in Pioneer Square, lift the University District lease lid, and reinvest in Rainier Valley. He rattled those off during his February State of the City speech, he mentions them on the radio every chance he gets, and he relisted all five at an April 27 press conference about South Lake Union.

Most of them are no-brainers: It's obvious Nickels is up to his elbows in Northgate, South Lake Union, and the University District. But what's Nickels' big idea for Rainier Valley?

It's no mystery that the neighborhood needs help. A recent city report indicates that Rainier Valley has lost 3 percent of its jobs since 1995 (the number of jobs was slated to increase by 70 percent before 2015). Neighbors want a real economic boost.

Nickels' plan has little to do with reinvestment, and a lot to do with his pet project, Sound Transit--which recently put up signs indicating it will break ground for light rail along Rainier Avenue South and Martin Luther King Jr. Way South. The mayor's plan calls for flooding Rainier Valley with $50 million to fix what light rail's going to break. In other words, the city's bailing out Sound Transit on Sound Transit's mitigation obligation.

"The primary strategy in Rainier Valley is the Community Development Fund," says Jill Nishi, director of the city's Office of Economic Development. The CDF--composed of $42.8 million from the city, $7.2 million from the county, and nothing from Sound Transit--will be spent in a few ways, she explains: mitigation for businesses affected by light rail construction (community groups estimate 90 businesses will be displaced), apprenticeship training for Rainier Valley residents so they can get jobs building the transit project, and long-term community development centered around light rail.

While the community is glad someone's going to pay for Sound Transit's damage (though they point out that $50 million probably won't be enough), they would rather see the city spend its money on real community investment--boosting Rainier Valley's minority-owned small businesses, for example--instead of bailing out Nickels' light rail dreams. Amy Jenniges