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December 01, 2005
Source: International Council of Shopping Centers
By: Sascha Brodsky
It was the 1940s, it was wartime, and the city of Bellevue, Wash., was losing workers for lack of retail and entertainment. Thus said the War Manpower Commission, and so prominent developer Kemper Freeman Sr. took action. In 1946 he unveiled Bellevue Shopping Square (renamed Bellevue Square a few years later), offering 20 stores to the population of 25,000 in this suburb just 10 miles outside Seattle.
Whatever reasons anyone might have for leaving Bellevue today, a dearth of retail and entertainment would not be among them. The Freeman family has kept up with the city's growth since the '40s, not merely by expanding Bellevue Square, but also by putting up additional projects nearby. The culmination was the opening last month of the first phase of Lincoln Square, a 1.4 million-square-foot, mixed-use center across the road from Bellevue Square.
Lincoln Square offers 250 stores, 41 restaurants and 700 hotel rooms, and its 10,000 free parking spaces are equivalent to about a quarter of all the parking available in downtown Seattle. Furthermore, the center is linked to the older projects by walkways, creating a powerful concentration of retail and leisure.
Freeman Sr.'s son, Kemper Freeman Jr., predicts that Lincoln Square will become a regional draw. To that end, Bellevue-based Kemper Development has launched a three-year regional marketing campaign in newspapers, magazines and radio stations, includes plane-ticket giveaways, discounted hotel rooms and shopping and dining gift certificates.
Freeman's ambitious statement is no stretch, observers say. "Kemper has picked some destination retailers that aren't otherwise in the Northwest, such as The Container Store, and I think people will come from all over to visit," said Richard F. Outcalt, a partner at Seattle-based Outcalt & Johnson: Retail Strategists.
The project's timing is impeccable, Outcalt says. Bellevue, the state's third-largest city, is rapidly changing from a sleepy bedroom community 20 minutes from downtown Seattle into a metropolis in its own right. The "center of gravity" for employment is shifting away from Seattle and toward Bellevue, he says.
"The company is investing in Bellevue," said Outcalt. "[Freeman] is essentially trying to turn Bellevue into a destination. And if anyone can make it succeed, Kemper can, because it's a company that invests in the long term."
The area's booming economy is certainly helping. Although the technology industry bust of the late 1990s hurt, the city now boasts solid employment levels, thanks to the strong financials of some of the companies that call the area home: Amazon.com, Starbucks, Microsoft. With money pouring in through the likes of these, retailers have been hard-pressed to keep up, says Outcalt.
Besides Container Store, Lincoln Square's 310,000 square feet of retail space includes Thomasville Home Furnishings. It "is almost entirely leased," said Freeman. The retail mix is designed to appeal to the affluent community of Bellevue, whose yearly household income averages $90,000.
The residential portion contains a 42-story Westin hotel and 148 luxury condominiums, all of which have been sold. Freeman says the apartments brought in between $200,000 and $4 million, "the highest average price of any condo project north of San Francisco."
Glass walkways connect the center to the 1.2 million-square-foot Bellevue Square, which earns $600 per square foot, and to Bellevue Place, a 500,000-square-foot mixed-use project to the north that opened in 1989. Freeman says he plans to market the three as a single entity called The Bellevue Collection.
It was not smooth sailing for the $500 million Lincoln Square, at least not until Kemper Development got involved. The previous owners broke ground in 2000, but work stopped in 2002 with the tech industry implosion, leaving an underground, five-level parking garage unfinished and the foundations and columns for a pair of high-rise towers exposed. Freeman acquired the property for $40 million and restarted the construction in 2003. Lincoln Square is not scheduled for completion until mid-2007, when a 27-story office tower is slated to open.
Freeman says he was pleased with the crowds Lincoln Square drew on opening day. "We've been overwhelmed by the response," he said.
Those War Manpower commissioners would probably be overwhelmed too.
