The Totem Lake Malls, lake and surrounding neighborhood have a storied past. The area also has great potential.

The malls’ future is directly tied to the state of the surrounding neighborhood.

Traffic flow and access to the malls from the freeway and surrounding area can hinder or positively impact economic growth. The environmental impacts and potential recreational benefits from Totem Lake could bring in more people to the area on a regular basis or even physically prevent people from being able to get to the malls due to flooding. The expansion of the surrounding business district can take away economic opportunities from a potential redevelopment of the malls or can help to bring more shoppers to the area. These and many more issues cloud the future of the once-vibrant malls.

In this final piece of the ongoing five-part series on the Totem Lake Malls, the Reporter will examine what may lie ahead for one of the most important pieces of retail real estate in Kirkland.

Totem Lake Symposium

The desolate sight of the malls makes it look as if the City of Kirkland is doing nothing to help redevelopment along.

But the city has recently attempted to help move along the process. The city entered into an agreement with the current owners of the malls, Coventry and Developers Diversified Real Estate (DDR), in 2006 that expires in 2016. The city’s contribution to the plan is premised on the construction of a mixed use development. But Coventry’s lawsuit against DDR and the economic downturn has made redevelopment difficult. Still, the city has held many community meetings to discuss the area. One of those meetings was the Totem Lake Symposium held in September at the Totem Lake Courtyard Marriott.

“We ignored the area for so long,” said Kirkland Mayor Joan McBride. “Some of us wanted to do something sooner. We have known for a while that this is the place to work on but we just could not keep up a steady vision and it has been to our detriment … It is the business center of Kirkland. We make over 30 percent of our sales tax from the Totem Lake neighborhood.”

The symposium’s aim was to bring together about 50 property owners and area businesses, regional experts in finance, development design and engineering and city leaders to talk about the issues facing the greater neighborhood.

“We needed to ask the people who do business there what they need,” said McBride.

The symposium brought light to some redevelopment barriers, such as having no sense of place, a lack of public or private funding, prescriptive zoning along with uncertain and slow permitting.

Some of the input given at the symposium has already been addressed by the city or other groups such as a dog park, which will open near the court house later this year, and a city presence in Totem Lake, which will take the form of a new public safety building on the west side of the 405 freeway.

“The ah-ha moment for me as the new person was that there is so much more in the Totem Lake neighborhood than just the malls,” said Kirkland City Manager Kurt Triplett, who started in the position just before the symposium.

The issue of the BNSF rail line that is just to the south of the malls is much like the lake in that there are great opportunities, but many hurdles.

The rail line could bring connectivity to other parts of the city and region with light rail or a pedestrian bike and walking trail. But there are other issues such as how to bridge the rail line with crossing traffic and businesses.

The collective owners of Totem Square, which is located to the south of the malls, want to redevelop, said Triplett. The issue of the rail line, which runs directly through the development, is something the owners are beginning to work with the city on. However, the city does not own the rail line, and no one really knows who ultimately will own the defunct rail corridor in Kirkland and what they will do with it, which leaves the city in an awkward place as far as granting ways to bridge the land.

One of the biggest problems with most of the ideas, though, is they take a massive amount of money. In a good economy, finding the money for such projects was difficult but not impossible. The city could seek state and federal dollars for transportation improvements, create revenue from increased taxes or utilize bonds to improve infrastructure. In this economy, the city will have to get creative.

“You have to take a different look at your capital projects …,” said Triplett. “What we can do is if we have a project coming in the next couple of years that we have set aside money for but may not get federal or state matching funds, we could redirect those transportation dollars. There is no new money, there is no magic money, but if we can get money that is just sitting and put it to work for us we hope that can catalyze the process.”

Another revenue source is the $15 million the city committed to fund road improvements when officials approved the development agreement. One of the biggest issues when talking about the neighborhood is traffic congestion and linkage.

Participants from the symposium and to the Reporter’s survey about the area talked about a north-bound on-ramp to 405 at N.E. 116th Street. The problem for the city is they have no control over that part of the process. The Washington State Department of Transportation has talked about an on and off-ramp at N.E. 132nd Street.

“What we can do … is to build small little connectors in the Totem Lake neighborhood,” said McBride.

One of those is a road that would connect N.E. 120th Street and Totem Lake Boulevard on the east side of 405.

The city has also worked with property owners on regulations to promote mixed-use redevelopment and has taken steps to declare Totem Lake an “Urban Center.”

But some in the business community have not seen the city’s actions as credible.

Stu Vander Hoek, president of Vander Hoek Corp., said the city should not “over-promise” more than it can provide.

Vander Hoek, who participated in the original Totem Lake Advisory Committee for seven years in the 1990s, manages family commercial and residential property in downtown Bellevue and the Parmac Industrial Park in Kirkland.

“Even though the turnout was good, I don’t have a lot of hope for the process,” said Vander Hoek of the symposium. “Until the city realizes they need to bring a few primary stakeholders together who are committed to a common vision, not much will happen in Totem Lake.”

He added a group of committed stakeholders could work with the development community to “create a realistic vision” for the area.

“This is what Bellevue did, and other communities have done previously,” said Vander Hoek, noting that local stakeholders have been successful redeveloping the Bel-Red Corridor in recent years.

Symposium feedback

Despite his doubt with the city’s redevelopment efforts, Vander Hoek attended the recent symposium to voice his concerns.

He believes Totem Lake holds the potential to become the city’s second downtown. However, the neighborhood’s current demographics are not strong enough to support redevelopment of the malls, said Vander Hoek.

“The basic problem currently is that well established retailers apparently don’t have enough demand from the local market. As long as they don’t have confidence in investing in the area, they won’t,” he said. “And, to try and pull customers from Bellevue, Woodinville, Bothell and Redmond might never happen. The bottom line is there just aren’t enough people living in the Totem Lake area to support a large scale mall. That’s why more housing is critical.”

He said a successful redevelopment of the malls would seek to bulldoze the property, create a park around the lake with housing and office space. Alternatively, the city could work with a developer to create a lid over the freeway between N.E. 124th and N.E. 128 to support an area where parks and recreation with housing could be placed together, he added.

“This could then be tied into future transit-oriented development. The mall itself could then be raised at least one level above the existing grade so that parking wouldn’t have to be buried, given the problems with the soil in that area especially.”

For this to happen, the city should be supportive of new development by simplifying the development process, cost, limitations and requirements, he said.

Several developers that attended the symposium agree that the malls’ redevelopment should include a mix of retail, housing and office.

Andy Loos, development manager for SRM Development, LLC in Kirkland, says this type of mixed-use would strengthen the surrounding neighborhood and provide for better infrastructure and community amenities.

“There is no real attraction to the area,” he told the Reporter. “It’s tough for retail to compete with Redmond and Bellevue. The city must create a niche, an amenity in the area, a draw for residential and retail.”

He said the city, for example, could do something with the lake and its shoreline to make it an amenity.

Symposium participant Jim Tosti, president of Windward Real Estate Services, Inc. in Kirkland, is interested in purchasing property and developing in the Totem Lake neighborhood.

He said the neighborhood needs an overall conceptual plan “with a commitment from this city for infrastructure improvements to kick this thing off.”

The area surrounding the malls is already a medical hub, says Tosti, but it has the potential to become more. Add a transportation hub, residential, office, retail and “it would become its own little town.”

Johanna Palmer’s biggest concern with the greater Totem Lake neighborhood is land use. Her family business, DeYoung Manufacturing has been in Totem Lake for more than 25 years and employs about 65 people.

“We are located in the last area zoned for light manufacturing,” noted Palmer. “For the last 25 years the city has rezoned and ‘up-zoned’ all the areas that were for industrial uses to commercial, office, or residential uses. Manufacturers and other providers of basic services are being zoned out of Kirkland.”

She said the city needs to make the land-use process more predictable in time and cost.

In addition, a redeveloped mall would provide the area and northern annexation neighborhoods with an “economic and community focal point,” said Palmer. “Many people just drive through Totem Lake on their way to and from work. A good selection of businesses could serve those commuters and these neighborhoods.”

Taking action

During the final meeting of 2010 the Kirkland City Council adopted the Totem Lake Action Plan. It is a comprehensive guide to revitalizing the Totem Lake neighborhood that directly came from the symposium. The council has made the plan the city’s top focus in 2011.

“We are putting our money where our mouth is,” said Triplett.

The plan outlines things the city can do immediately, in the short term and long term. Some of the immediate things were a dog park and new public safety facility. The dog park is set to open this year and the My Home Wholesale building, located near the current municipal court, was purchased in September to be converted into the city’s new police station, jail and municipal court. The city has also developed a “feet first” walking map of Totem Lake among other things.

Some of the short term items the city plans to work on this year is to evaluate building ahead of mall development, pursue King County Flood Control Zone District funding for the lake issues, advocate for 405 access projects to move forward faster, to identify and pursue new funding sources for transportation and verify specific concerns regarding current zoning with developers.

“That is something that (city planner) Eric Shields actually assigned to himself,” said Triplett. “He is actually going through all the (zoning) codes up in Totem Lake line-by-line. He has been really focused on it and he has already begun to highlight a couple of things.”

Triplett said that so far no one in the business community has come to the city with something that they cannot do thanks to zoning.

“We have let them know that if they are literally stopped by what is currently allowed, let us know,” said Triplett.

McBride said one way residents and businesses can get involved is to lend their ideas to the process.

“I believe we are going to be having an organized neighborhood meeting up there,” said McBride. “… We need to know what they want. Everyone wants action at Totem Lake. Some people want it so bad they don’t even care what it is … We are still developing the action plan and we need people’s input.”

When asked if there was anything residents could do to move along the process of private redevelopment, McBride said that a petition through the city would be preferable to writing the malls’ owners directly.

Totem Lake: The Eastside’s Greenlake?

Shabei Aziz opens a sliding glass door to one of the guest rooms at Carlton Inn that overlooks Totem Lake. It’s a sanctuary of sorts as birds chirp to various melodies.

“There are 88 species of birds,” says Aziz, adding, “Nobody knows this is here.”

Her father, Ali, purchased the property and converted the building to a hotel in 1991. Before that, the structure housed Totem Lake Public Market, where scores of patrons picked through fresh produce, fish, spices or sipped fresh-squeezed orange juice on the lawn overlooking Totem Lake in the 80s. The Carlton Inn still has one of the original staircases to the suburban market.

Ali donated the lake to the city in the 1990s.

Aziz points to an unfinished wooden walkway that surrounds a portion of the lake. She said she is unsure why the walkway was never completed, but she hopes the city will consider finishing the walkway some day to extend around the entire lake. She considers Totem Lake to be a valuable amenity that should not be overlooked with any future redevelopment.

Many others agree.

One of the respondents to the Reporter survey on Totem Lake Malls said: “Why not develop a ‘Greenlake’ of our own with a real walking path around Totem Lake. This could be the draw instead of an anchor store.”

“One of the things we heard loud and clear was how do you create a sense of place …” said Triplett. “It gives us an opportunity to turn the lake into more of an attraction itself and create that sense of place.”

One problem is the lake is brown from silt that has built up. The silt is the root of many problems.

“The lake has actually risen substantially in recent years causing things like Totem Lake Boulevard to flood,” said Triplett.

The flooding during heavy rain storms has been damaging to retail this winter. It has also caused some areas of the malls to sink.

Most people do not even know the location of the lake, thanks to an overgrown area next to Totem Lake Boulevard. Some of the wooden walking path that was constructed around the lake has been repossessed by the environment and the water. The flooding problem with the lake is far reaching for the area and needs to be addressed before any major redevelopment takes place. The lake and surrounding wetlands also have major environmental issues.

The lake, which is located to the south of the malls, is connected to wetlands that extend all the way to the west side of the freeway.

“We are really trying to attack the issue of flooding in Totem Lake,” said Triplett. “It is an ongoing challenge and getting much worse. In the budget the council approved, we have specific funds set aside where we are going to come up with a concrete work program with short- and long-term actions to prevent the flooding … another thing that complicates this issue though is that not all the things affected are owned by the city.”

The lake itself is owned by the King County Conservation District. Environmental impacts must also be assessed.

“In many ways, having that much water up there is not good for the environment,” said Triplett. “… If we can kind of unclog all that and re-channel it we have actually been able to show that it will be a net positive for the environment. But it is not a simple process.”

It seems none of the solutions to one of Kirkland’s biggest issues are simple.