The future growth of downtown Bellevue may be riding on November's City Council election.
From his complex of shopping centers, high-rise hotels, offices and condos in downtown Bellevue, Kemper Freeman can glimpse the 36 acres where developer Wright Runstad is planning a new urban village.
Freeman opposes the use of citywide taxes and fees to help pay for the roads that would serve the retail, housing and office development, with its light-rail station, which he also believes is a waste of money.
His opposition helps explain why Freeman is backing one group of City Council candidates while business rival Wright Runstad is supporting a different group. Both developers know the election’s outcome will help decide where the next big burst of commercial growth takes place in Bellevue, and who pays for it.
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While Freeman argues that downtown Bellevue is only half built, Wright Runstad believes the future of the city lies in redeveloping the Bel-Red Corridor, with its 900 acres of land situated between downtown and Microsoft’s Redmond headquarters.
“I think they are doing what developers are trying hard to do, and that’s to get the public to pay for as many of their things as possible,” Freeman said of the city funding plan for Bel-Red Corridor, where Wright Runstad’s project is seen as a cornerstone to future growth.
Not so, says Wright Runstad President Greg Johnson, who contends the city financing plan would have his company pay more than the usual share for roads.
Wright Runstad is poised to build 1,000 homes and up to 4 million square feet of retail and high-tech office space on the site of a former Safeway distribution center.
Calling it a blend of Seattle’s South Lake Union and Pioneer Square, with a touch of Bellevue’s “old Main Street” thrown in, the Spring District project would be one of the largest transit-oriented developments in the nation, Johnson says.
The two developers’ campaign contributions are nothing new. But this fall’s election may be the first time Freeman and Wright Runstad have backed different sets of City Council candidates.
Freeman along with developers Bob Wallace and Skip Rowley have put an unprecedented $69,000 into an independent campaign expenditure, controlled by political consultant Brett Bader.
Freeman is supporting first-time council candidates Aaron Laing, Michelle Hilhorst and Patti Mann, as well as incumbent Jennifer Robertson.
Wright Runstad is backing Laing’s opponent, John Stokes, and council incumbents John Chelminiak and Claudia Balducci. The company’s chairman and CEO Jon Runstad, along with his wife, and President Greg Johnson have contributed about $5,400.
The rift between Freeman and Wright Runstad has been widening for some time. In January, Freeman resigned from the Bellevue Downtown Association — a business group co-founded by his father and which Freeman was a member of for more than 30 years — after Johnson became chairman.
Freeman cited “a lack of alignment of interests.”
A former state legislator, Freeman is known for turning Bellevue Square, the shopping center started by his father, Kemper Freeman Sr., into one of the region’s leading malls. Freeman also built Bellevue Place and Lincoln Square across the street. The developments helped transform downtown Bellevue from a sleepy bedroom suburb into the commercial core of the Eastside.
Seattle-based Wright Runstad has built offices in Bellevue since the early 1980s, along Interstate 90 and downtown, where it erected One Bellevue Center, Symetra Financial Center, Key Center and City Center Plaza.
Chelminiak says Bellevue is maturing and the Freeman and Wallace families are like parents whose children are clamoring for more power.
“When you grow up,” Chelminiak said, “your parents think you’re growing too fast. That’s what’s happening with the city. We’re in our teenage years. We want the car keys. We want to go out.”
The once-serene City Council fractured after the 2009 election over issues that have continued to divide Johnson from Freeman and Wallace: Sound Transit’s East Link light-rail plans and the use of tax dollars to upgrade Bel-Red roads.
Rail, road disputes
One of the two new council members was Wallace’s son, Kevin, who, with support from the council’s new 4-3 majority, championed a light-rail route different from the one Sound Transit preferred.
Wallace’s route would have crossed Mercer Slough to an abandoned rail line beside Interstate 405, but Sound Transit stuck with its original route straight up the west side of the slough to downtown.
The council also voted not to raise property taxes, which were part of an existing $299 million financial plan to build roads for Bel-Red and its connections to downtown and Wilburton.
The road plan had called for raising property taxes by 3 percent a year for 10 years, gradually increasing impact fees paid by developers, and forming local improvement districts to collect fees from affected property owners.
Some City Council candidates now are saying the city should consider rolling back the impact fees.
On her website, Hilhorst says the financing plan “looks to primarily benefit only one developer.” Although the city’s vision for transforming the Bel-Red Corridor is “a beautiful plan,” she says, “maybe the timing has changed and how we pay for it has changed. We do have to open it up and discuss it.”
Her opponent, two-term incumbent Chelminiak, says, “I can give you 2.2 million reasons” why Freeman is supporting Hilhorst. Chelminiak says the $2.2 million is his estimate of the impact fees Freeman would have to pay on his planned expansion of Lincoln Square.
Freeman says he is more concerned about fairness and the overall tax burden than one particular fee.
Freeman pulls no punches about Wright Runstad, whose chairman Runstad is a friend and fraternity brother from University of Washington days.
“I think the candidates they like best are the ones willing to use public funds for their benefit,” Freeman said. “… In good times I don’t think it’s good policy, and in bad times it’s horrid policy.”
Johnson, Wright Runstad’s president, says his company isn’t asking for favors.
“If anything, it’s the opposite. The citizens of Bellevue are going to get great mobility, particularly in downtown, and two-thirds of it is going to be paid by the developers and property owners in Bel-Red,” Johnson said.
Of his involvement, Councilmember Wallace says his family previously contributed to Balducci and Chelminiak in 2003 and 2007. “We thought of them as pro-business candidates that were looking to keep tax rates low and continue to foster job creation in Bellevue.” Now, he says, they want to raise taxes and fees for projects the city can’t afford, so he’s backing their opponents.
This fall’s contested City Council race has attracted other developers as well. Condo builder John Su says he contributed to Stokes, Balducci and Chelminiak because they support light rail and because he believes Freeman is trying to “buy” the election.
However, a citizen activist has said it’s suspicious that two of Su’s employees and their spouses contributed the legal maximum to Stokes.
The Legislature last year limited campaign contributions to candidates to $800 in a primary and $800 in a general election. The limits were a response to large contributions in cities without contribution limits, including Bellevue, where in 2009 the Eastside Business Alliance contributed more than $20,000 to several candidates.
Keith Ervin: 206-464-2105