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September 11, 2018

Tara Sundin, Community and Economic Development Manager
City of Bellingham Planning and Community Development Department

City of Bellingham Proposes Agreement to Purchase Former JCPenney Building Downtown

On Monday Sept. 10, Mayor Kelli Linville announced the City of Bellingham is considering a proposal to enter into a public-private partnership to redevelop 1314 Cornwall Ave. (the former JCPenney building) into a mixed-use residential, office and retail development. The Mayor will bring forward a Development Agreement for City Council consideration, and the Bellingham City Council will hold a public hearing on the proposal on Sept. 24. “A community's downtown is everyone's neighborhood," Mayor Linville said. “It is the first place visitors and potential investors look to understand the community's economic health and character. This is why I am so deeply committed to the health of our City Center. We are fortunate to have a local business and development community, such as this development team, so invested in the return of downtown as the heart of our City." Downtown Bellingham was the center of community life and economic activity beginning in 1891 with the merging of the towns of Whatcom and Sehome to create “New Whatcom".  The 1988 opening of the Bellis Fair Mall resulted in the closure of anchor retail tenants and subsequent blocks of vacancy, draining much of the activity from the downtown core.  While downtown has nearly recovered from the loss of its retail center, one major vacancy remains. The proposed agreement and associated lease are with private partners Jeff McClure and Jeff Kochman and contain binding terms for the redevelopment of the property. The City would purchase the land and the private partners would purchase the building from current owner Whatcom Center LLC, managed by Bruce Tolchin, for $2.85 million.  The City would enter a 50-year land lease with the developers McClure and Kochman with an option to purchase. The purchase option and future rent adjustments would ensure that public investment is repaid over time. The building has been vacant since 1988, and the private market has not shown interest in activating or renovating the building. This agreement would leverage private investment while advancing the City's goals of supporting additional market-rate housing and revitalizing the downtown district. “I am excited to propose that the City form a public-private partnership with local developers.  Together, we will transform this vacant building into a vibrant commercial and residential property," Mayor Linville said. “More jobs and more housing is exactly what we need to continue the positive momentum that is building in our City Center.  This would be one of several key investments that the City of Bellingham has made in our downtown in the past several years to improve the health and vibrancy of downtown."

The project

If approved, the new project would be called Dock Street Flats and is inspired by the original street name, Dock Street, which was later changed to Cornwall Avenue. The developers have agreed to undertake a major renovation of the building at an estimated cost of $12 million, including the cost to purchase the existing building for $712,500. The developers would also commit to procure all services to design and engineer the renovation and obtain all financing and required actions to redevelop the building. “We are very excited about this project," Kochman said. “It represents a key component to a long City and community supported redevelopment of Downtown.  Our goal is to bring an active and vibrant building back on line with housing and retail activity contributing to an active street.  The fact that the City was willing to work with us on this redevelopment is extremely gratifying.  We are committed to making it a success." Proposed redevelopment of the property includes residential and commercial uses. Adding two more floors to the building would allow between 50 to 90 market-rate apartments with a range of sizes and configurations. The building's 5,800 square feet of commercial space, which includes three separate retail storefronts, would be activated, and plans include the retrofit of the building façade, creating a new grand entrance, as well as windows and courtyards. The existing basement would be converted into a parking garage that includes bike parking. Improvements are also planned for the abutting public spaces to beautify and activate the street. “The continuity of active storefronts is critical to drawing shoppers as well as creating a pedestrian-friendly urban district where people want to live and work.  Not only are we thrilled with the increased residential population to support business growth, but we expect to see more investment as a result of reactivating this prime spot in the core of our downtown," said Tara Sundin, the City's Community and Economic Development Manager.

The partners

Jeff McClure is a principal of RMC Architects, which he co-founded in 1986. McClure has a long history of involvement in downtown revitalization. He is particularly interested in projects that create a sense of community through design that is sensitive to its context. His most recent project turned the vacant, burned-out Waples Building in downtown Lynden into a retail hub and hotel, the Inn at Lynden. Jeff Kochman is the former CEO of the Barkley Company where he lead the development and construction of over 500,000 square feet of retail, commercial, office and medical space along with housing units over a 25 year period. Today, Jeff continues to develop his own property under the AMBK Group including commercial, industrial and residential housing. Together, McClure and Kochman, in partnership with the City, turned the vacant lot at 1225 Railroad Ave. into the Marketplace Building located at Railroad and Holly. The building is home to RMC Architects, Starbucks as well as 40 residents and additional businesses. This investment spurred additional investment at this key intersection in Downtown. “This project represents a key element in the City's and the community's long effort to redevelop the downtown area," McClure said. “We are very excited to get this building back in service and provide jobs and housing into the future.  The City's support of us as the development team is extremely gratifying and something we are honored by."

Upcoming public meetings on the proposal

The City Council will hold a public hearing on the development agreement on Sept. 24. If the City Council approves the proposal, the property sale would close before the end of the year. Construction could begin as soon as late 2019. For additional information, contact Tara Sundin, Community and Economic Development Manager, at tsundin@cob.org or (360) 778-8360 or visit www.cob.org/downtown.  

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