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Tuesday, January 28, 2003 - Page updated at 12:00 AM

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Allen woos away big Pioneer Square tenant

Seattle Times staff reporters

For NBBJ, a Seattle institution and one of the world's leading architecture firms, it was a choice between staying in a neighborhood built by the city's founders or moving to one being rebuilt by billionaire Paul Allen.

Allen won.

NBBJ announced yesterday plans to leave Seattle's historic Pioneer Square for new digs in the South Lake Union neighborhood being developed by a partnership that includes the Microsoft co-founder's company, Vulcan.

Under the tentative proposal, the architecture firm would lease much of the office space in a full-block development at John Street and Pontius Avenue, near REI's flagship store.

NBBJ would design the 400,000-square-foot building, which would also include an unspecified number of apartments, underground parking and space for restaurants and shops.

A final deal should be completed early next month, Vulcan said. It will take three years to design and build the project.

Landing the world's fifth-largest architecture firm is the latest in a serious of high-profile coups engineered by Vulcan that have defied the region's commercial-real-estate slump and sped redevelopment of the 50 acres it owns in the South Lake Union area faster than many expected.

Most of the projects have involved biotech developments, but Vulcan says it aims to attract a wide variety of creative companies.

NBBJ's move is not good news for Pioneer Square, where the firm is one of the neighborhood's largest employers and an anchor that helped drive redevelopment there for nearly two decades.

Pioneer Square has struggled in recent years to overcome the effects of an earthquake, Mardi Gras riot, recession and some of the highest office-vacancy rates in the city.

NBBJ leaders said the company was attracted by the chance to design its new headquarters and consolidate its 430 employees in a single building.

"There was not any dissatisfaction with Pioneer Square," said Rob Swartz, a principal at the company. "It boiled down to what is the best thing for the firm."

The new headquarters would be developed by Harbor Properties on a block owned jointly by Vulcan and Pemco Insurance, which is headquartered nearby.

NBBJ promised to make the building a model for environmentally innovative features. It will have to take into account the New Richland Laundry building, a vacant 1917 landmark that sits on the northwest corner of the block and that recently won historical protection from the city.

"We have been speaking all along about creating a neighborhood that is more diverse than biotech, and NBBJ was a key consideration for us," said Ada Healey, Vulcan's vice president of real estate.

"Whether it is cutting-edge science or cutting-edge architecture and design, we will probably end up with other firms focused on intellectual capital rather than their ability to manufacture products, " Healey said.

In recent months, Vulcan has lured pharmaceutical giant Merck, Children's Hospital & Regional Medical Center and the University of Washington to the neighborhood.

Crews have started construction of two biotech buildings and a 162-unit apartment building. The company hopes to break ground this year on a project that will include a QFC store, office space and condominiums.

NBBJ's decision is an important vote of confidence in the South Lake Union area, similar to what the company did for Pioneer Square when it moved to that neighborhood in 1982, said former Seattle Mayor Paul Schell, who is a strategic adviser to NBBJ.

"NBBJ was an early pioneer who helped to make Pioneer Square what it is today," he said. "We'll see South Lake Union become more than research. (NBBJ) will give it a balance, help make it a place to live and work. It's one of those good signals."

NBBJ is spread out between two buildings in Pioneer Square: its headquarters in the Heritage Building at 111 South Jackson St. and a second office at 83 King St.

The firm started looking at options last summer as its leases came up for renewal.

When word leaked out that the company might move, speculation focused on the South Lake Union area.

NBBJ has worked closely with Vulcan before. The company designed Vulcan's 505 Union Station building in the Chinatown International District and is working on its Interurban Exchange office and lab complex a few blocks from Lake Union.

Jim Winkler, who owns the Heritage Building, said he knew it would be difficult to match Vulcan's offer.

"We enticed them to remain, but there were lots of considerations," said the Portland-based developer.

"(Vulcan) is very formidable competition, and they have a lot more money than we do."

Vulcan declined to disclose details of the financial agreement and said it was too early to estimate the new building's cost.

Winkler said Pioneer Square is better prepared to deal with the loss of such a major player than it was when NBBJ arrived.

"The neighborhood has matured; you have restaurants and sport stadiums now," Winkler said. "This is by no means a death knell; it is just the end of one chapter and the beginning of another."

Jill Nishi, director of Seattle's Office of Economic Development, said the city will spend the next three years trying to attract employers to Pioneer Square to fill the void left by NBBJ.

"That gives us a fair amount of time to work with the property owner. We think time is on our side because the economy and market will pick up," she said.

The new project was greeted with mixed emotions in the South Lake Union neighborhood, which is increasingly divided over Vulcan's plans.

In October, the company demolished a low-income apartment building where NBBJ's new headquarters will go, causing a furor. At the time, Vulcan said it had no plans to develop the site.

"That will continue to be a sore spot for us," said Colleen Dooley, a member of the Cascade Community Council.

"We really want to retain our historic buildings and the existing low-income housing. They are just going to have to redeem themselves."

Ed Geiger, a community activist and neighborhood business owner, welcomed the news.

"There are a number of people in the community who don't want increased density, so they'll be unhappy," he said.

"My hope is to have it happen in a way that's most sensitive to everybody. I think NBBJ will respect that."

J. Martin McOmber: 206-464-2022 or mmcomber@seattletimes.com.

Bob Young: 206-464-2174 or byoung@seattletimes.com

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