Seattle developer Freehold Group plans to break ground in September on a three-story, mixed-use building that could be a sign of things...

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Seattle developer Freehold Group plans to break ground in September on a three-story, mixed-use building that could be a sign of things to come in a neglected corner of the city — or a one-time aberration.

The proposed Nitty Gritty Building, in the decidedly gritty Interbay neighborhood, would be mostly office and laboratory space, with some retail. Freehold principal Jeff Thompson even talks of a ground-floor restaurant serving food from a roof garden.

But this is an industrial area, at least according to zoning maps. And less than 10 percent of the 107,000-square-foot building is designed for industrial use.

Last December, in a bid to protect blue-collar jobs, the City Council imposed tight limits on office and retail development on Seattle’s remaining industrial lands, including Interbay.

The Nitty Gritty project was exempted from those limits because it was already in the permit pipeline. Under the new rules, however, nothing like it could be built on the surrounding blocks.

Now Freehold and the owners of most of the other industrially zoned land in the north end of Interbay are challenging those limits.

They have petitioned the council to remove their 14-acre area from the city’s Ballard Interbay Northend Manufacturing/Industrial Center (BINMIC), one of two areas the city has set aside as sanctuaries for industry.

After that, the Interbay Neighborhood Association says, it will seek to change the zoning to an industrial classification that doesn’t carry the restrictions on nonindustrial development.

Thompson says the limits, while well-intentioned, won’t keep or bring industry to Interbay.

Bigger economic forces are at play, he says; projects like the Nitty Gritty could breathe new life into the neighborhood.

“Interbay has sat fallow for years,” Thompson says. “What are we saving it for?”

But Warren Aakervik, president of Ballard Oil and a leader of the BINMIC Action Committee, says industry and its high-wage jobs are being pushed out of Seattle and that the Interbay property owners’ proposal would only accelerate that trend.

Developers like Thompson just want to make more money on their gambles in industrial real estate, he charges. “This is all about instantaneous gratification.”

The City Council could take up the Interbay Neighborhood Association’s proposal this fall.

North Interbay is a triangular sliver of the city, bounded generally by West Dravus Street, the BNSF railroad yards and busy 15th Avenue West.

It’s a jumble of vacant lots, storage yards and mostly older factories and warehouses.

Most who work in the area or live nearby agree it’s rundown.

“It’s dead here. Just dead,” says Chuck Read, whose company manufactures custom cutting boards.

About one-third of the area, mostly along Dravus and 15th, is zoned for commercial uses.

The Interbay Neighborhood Association is pushing for big changes here, too — a rezone to allow condo or apartment towers up to 125 feet tall.

The city’s Department of Planning and Development last month proposed towers not top 85 feet. Planners said taller buildings would be incompatible with nearby industry.

North Interbay’s industrially zoned blocks hold businesses that manufacture doors and cabinets and musical instruments.

There’s a steel-products warehouse, a marine-equipment supply operation and several machine shops.

Other businesses don’t really qualify as industrial: a dog-obedience school, a fitness club, a company that rents party tents and canopies, another that markets sex toys.

The Interbay Neighborhood Association cited that mix in its petition to trim the area from BINMIC.

The neighborhood already lacks the intensity of “hard-core” industrial uses that should define a manufacturing/industrial center, proponents argue; deleting it would just reflect reality.

The city’s restrictions on nonindustrial uses “lump me in with 100-acre tracts in South Seattle that are pouring steel,” says Read. “Every area has different needs and different requirements.”

Thompson, Nitty Gritty’s developer, contends mixed-use projects like his would create “a more upgraded environment for industrial uses and a more respectful environment for customers.”

That could help boost industrial sales, he says.

But just 12 percent of the land in Seattle is zoned industrial. And Aakervik, of the BINMIC Action Committee, says North Interbay offers the access to rail and water that industry needs, and that few other areas offer.

Industrial development in the area has been stymied, he says, because property owners aren’t satisfied with its potential returns and are speculating that zoning changes will make them richer.

Dave Gering, executive director of the Manufacturing Industrial Council of Seattle, says a project like the Nitty Gritty would cause him more heartburn if it were proposed in a heavy-industry stronghold like Georgetown or SoDo, rather than North Interbay.

“The areas are very different,” he acknowledges.

Gering’s organization supported the limits on nonindustrial uses the City Council approved last December.

But he says he’s not necessarily opposed to deleting North Interbay from BINMIC.

Fine-tuning, including possible boundary adjustments, may be appropriate, Gering says:

“What [the council] did last year was an incredibly blunt effort to just try and stop the bleeding.”

Eric Pryne: 206-464-2231 or