A development agreement approved by the Issaquah City Council clears the way for a neighborhood of offices, apartments, stores and restaurants packed together in an urban core. The 4.4 million square feet of commercial and residential space is significantly larger than Amazon.com's new campus in Seattle's South Lake Union and Denny Triangle.

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Issaquah, a suburban city that has sprawled from its old downtown through strip malls to bedroom communities creeping up the surrounding hillsides, has plans for something very different.

A development agreement approved by the City Council this month clears the way for a neighborhood of offices, apartments, stores and restaurants packed together in an urban core unlike anything yet seen in this community east of Bellevue.

The 4.4 million square feet of commercial and residential space Rowley Properties will be allowed to build on the south side of Interstate 90 is significantly larger than Amazon.com‘s new campus in Seattle’s South Lake Union neighborhood.

City Council members, who unanimously approved the urban villages, hope they will bring more jobs to the city of 31,000 and, with a critical mass of new workers and residents, encourage Sound Transit to extend light rail along the I-90 corridor.

The projects, Hyla Crossing and Rowley Center, could bring 6,500 jobs and more than 2,000 residents in buildings up to 12 stories high on 78 acres adjacent to a freeway interchange, according to city estimates.

“In the last decades Issaquah saw explosive growth. If the last decade was about bringing people into Issaquah, the next decade is going to be about providing jobs and services all those people need,” said City Councilmember Tola Marts. The Rowley project “is a good step in that direction,” he said.

Hyla Crossing and Rowley Center will put Issaquah “in a better position when major employers go to look for opportunities,” Marts said.

Mayor Ava Frisinger said the project will provide an economic stimulus to the city, help preserve Tibbetts Creek and provide “workforce housing” at affordable rents.

Don’t look for a rapid transformation.

The city-Rowley agreement envisions a build out of up to 30 years. Rowley Properties Chairman Skip Rowley said construction probably won’t get under way for at least two or three years, and it will occur in phases.

And with continuing global economic jitters — “It could be bad if they don’t get this euro thing taken care of” — Rowley said his company will take its time, putting plans on paper, then approaching potential tenants and lenders.

Rowley Properties’ long-term strategy of maintaining full ownership of the land also means it will take longer to finance and build the urban villages than if the company brought in equity partners, Rowley said.

The urban villages will replace small warehouses and storage units built in the 1970s. Two relatively new buildings, a Hilton Garden Inn and the John L. Scott Real Estate office building, are expected to remain.

During two years of negotiations between the developer and the city, the maximum building height was reduced to 150 feet from the 200 feet initially proposed by Rowley Properties, responding to some residents’ concerns that the buildings would obscure views of the mountains. Before the project can be fully built out, the city will require the company to build at least 500 apartments. As many as 1,000 units could be built, according to city staff.

The council’s approval of the development agreement comes as the city continues to work on a comprehensive plan for redevelopment of a much larger swath of the valley floor in the center of the city.

Frisinger said the Rowley project could be “a catalyst” for more growth in the broader 900-acre planning area.

Frisinger said most public testimony before the council favored the urban villages, although some residents expressed concerns earlier about building heights or suggested that approval of the developments should wait until the areawide planning process is complete.

Hyla Crossing and Rowley Center, likely to be the highest-density area in Issaquah, may bring restaurants and night spots that will give one part of the city a flavor of Belltown, Marts said.

Frisinger shares his hope for a more vibrant nightlife. “One of the things that we hear from folks who have moved here — this is perhaps from people who have worked for Microsoft — is that they really enjoy being here, they enjoy the cultural amenities that are here, they wish there were more of them and more things people could do of an evening,” Frisinger said.

City officials also hope a large concentration of jobs and residents at I-90’s Highway 900 interchange will encourage Sound Transit to propose a future light-rail line to Issaquah.

Even Rowley, who has been an opponent of light rail, wants either bus rapid transit or rail to serve a denser, maturing Issaquah.

“Issaquah has got a few little transportation problems,” Rowley quipped. “The only way to cure that in the long run is mass transit. The only way we get mass transit is if we have density. We need to have ridership first, unfortunately, to justify the cost of the agency’s sending out transit, whatever it might be.”

Keith Ervin: 206-464-2105 or kervin@seattletimes.com