The north end of Interbay, between the BNSF railroad yards and busy 15th Avenue West, is a neglected sliver of Seattle. Each day hundreds of...

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The north end of Interbay, between the BNSF railroad yards and busy 15th Avenue West, is a neglected sliver of Seattle.

Each day hundreds of cars bound for Magnolia or Queen Anne drive past the restaurants and markets that line West Dravus Street. But to the north and south of Dravus, the area is a jumble of squat industrial and office buildings, fenced-off storage yards and a handful of old houses, most of them empty.

“It is fairly run-down. It hasn’t been cared for,” says Steve Coffin, a veterinarian who practices in the area.

A radical makeover could be in store for the Dravus neighborhood. A group of business and property owners has proposed up to 1,400 apartments or condos — affordable units, supporters insist — in towers up to 125 feet tall, with shops at street level.

But the Interbay Neighborhood Association’s plan has languished at City Hall since 2005, in part because it’s caught up in a bigger policy debate:

What should be done to provide affordable housing in an increasingly unaffordable city? What does “affordable” mean? Would government intervention help or hurt?

Jeff Thompson, of the Freehold Group, the development company that has spearheaded the Dravus effort, says he’s running out of patience. Freehold and its partners have spent more than $12 million since 2004 acquiring property in the neighborhood, so far with little return.

“We’re trying to reclaim an unclaimed place,” Thompson says. “We’re really at a tipping point.”

Neighborhood-association members tick off a host of reasons why high-density residential development makes sense for Dravus.

Fifteenth Avenue already is a major transit corridor and is slated for upgraded “bus rapid transit” service in 2012. High-rise apartment towers in low-lying Interbay wouldn’t disrupt views as much as they would in many parts of town.

What’s more, supporters say, residential development here could help meet the city’s growing need for middle-income housing. The neighborhood’s very nature — the railroad tracks, the surrounding industry — dictates against upscale development and high rents.

“You’re never going to do the Four Seasons condos here,” Thompson says.

Ray Bartel, an association member and a pastor at Interbay’s Quest Church, says new apartments might allow members of his congregation, who now are priced out of the market, to move into the city.

Chuck Read, whose company manufactures custom cutting boards in the neighborhood, says his employees could benefit as well.

The Interbay Neighborhood Association has retained its own transportation consultant to anticipate traffic problems and recommend solutions. Property owners have moved to form a special neighborhood taxing district to pay for improvements.

The association has lined up support from many Interbay industrial landowners and from Queen Anne and Magnolia.

Nancy Rogers, president of the Magnolia Community Club, says some of its members aren’t certain about buildings as tall as 125 feet, but that something needs to be done.

“It’s one of the gateways to our community,” she says of Dravus, “and it’s not a very nice area.”

In 2005, the city turned back a bid by the Interbay association to designate Dravus an “urban village,” a major focus for employment and population growth. But the City Council did adopt language saying it would consider zoning changes and higher height limits to promote redevelopment.

Zoning change sought

The association wants zoning changed to make residential development easier on about 7 ½ acres designated for commercial use. It also wants height limits raised from 40 to 125 feet.

“They’re prepared to do quite a lot in terms of moderate-priced housing,” City Council President Richard Conlin says of the proposal. “Most council members think this a pretty exciting and reasonable thing to do.”

But the council can’t act until the Department of Planning and Development reviews the proposal. The council told the department in 2005 to come back with legislation by July 2006, but the agency hasn’t delivered.

Deputy Mayor Tim Ceis says the council didn’t provide money to carry out its order, and city planners already had plenty on their plate.

But he also says any Dravus rezone should wait until the council adopts citywide “incentive zoning,” which would require developers provide affordable housing in exchange for permission to build taller.

Mayor Greg Nickels has proposed that developers citywide set aside at least 11 percent of any extra units they build thanks to increased height limits; those units would go to renters who earn less than 80 percent or buyers who earn less than 100 percent of the county’s median annual income — about $54,000 for an individual.

As an alternative, developers could pay into a fund to build housing elsewhere for that market.

“If the Dravus people truly intend to build affordable housing, they can include it in their proposal,” Ceis says.

But the association’s plan targets renters or buyers one rung up, those earning up to 120 percent of median income. If Dravus developers must provide substantial housing for those who earn less, Thompson says, the price of remaining units would go up to make projects pencil out.

No South Lake Union

And those additional costs would be tacked onto units intended for middle-income folks, not luxury units — because there won’t be any, Thompson says. “You can’t compare this to South Lake Union or downtown,” he says. “Not all areas are created equal.”

Thompson says he’s willing to comply with incentive zoning requirements for heights above 85 feet, but not everything above 40 feet.

The Dravus logjam could break fairly soon. The Department of Planning and Development has agreed to complete an environmental analysis of the rezone by March.

If it determines more detailed review isn’t needed, Conlin says, legislation could follow fairly quickly.

Coffin, the Interbay veterinarian, is ambivalent. He wants to stay in the neighborhood but fears that assessments for traffic improvements could force him to sell.

But Freehold, Thompson’s development company, does good work, he adds. “I’ve always thought it would be redeveloped,” Coffin says. “I’m surprised it hasn’t happened yet.”

Eric Pryne: 206-464-2231 or epryne@seattletimes.com