As Industrial Slides Southward, Sodo's Zoning Stumbles

As Seattle continues its rapid growth, many developers and stakeholders are eyeing the acres of industrial land sitting just south of downtown. 

The line between Seattle and Sodo is easy to spot. The Seattle side is lined with restaurants, offices and high-density residential units. Sodo, home to the Port of Seattle and the stadiums, is full of lower, wider industrial buildings that house manufacturing firms, car dealerships and warehouses — and host plenty of well-paying jobs.

Most of the land in Sodo is zoned industrial, making it difficult to bring mixed-use development to the area. However — due to increasing land prices, lack of nearby affordable housing and renovation costs — many industrial firms are migrating south to the Kent Valley.

For example, Amazon is leasing 53,500 SF at Prologis Park Kent and Mayfair is in Kent, as well. Pierce County is generating the highest tenant demand. In the fourth quarter, 94% of the new supply was in Pierce County.

“The Kent Valley is desirable because tenants are within good proximity to the city of Seattle and rents are still significantly less compared to south Seattle,” Colliers International Industrial expert Bill Condon recently told Bisnow. 

Industrial is experiencing a southward slide because rates are lower and the buildings are newer and built to accommodate modern industry. 

“Sodo buildings date back to the 1920s and the lots are only 150 feet deep,” American Life Inc. CEO Henry Liebman said. “They were designed for 20-foot trucks and horse wagons. Today’s 53-foot trucks need 80 feet to maneuver.”

This logistical problem is one of the main reasons that industrial plants have left Sodo despite the protective zoning, said Liebman, who owns large amounts of land in the district. He ticked off a list of former manufacturing companies that have either closed or moved south.  

Making the problem worse is a skyrocketing crime rate. With few people in the area at night, the district has become a mecca for homeless people living in illegally parked recreational vehicles. A Seattle Times report found that year-over-year crime rates were up 31% in Sodo in 2018, compared to only 1% in the rest of the city. 

“There is a safety issue,” Nitze-Stagen CEO Peter Nitze said. Nitze, whose firm developed the Starbucks headquarters office building in Sodo where 6,000 people work, said that there are “real issues” with safety associated with the prevalence of RVs. “A land use change would help with that.”

Nitze believes there is a solution that conserves the industrial nature of the district, while still adding retail, commercial and some residential. 

“This has been a long-standing issue with land-use planners,” he said. “When you look at Seattle’s rapid growth and pressure on affordable housing and look at where there are opportunities to provide it, we are least pushing up against the limits.”

Nitze sees an opportunity to fill in some commercial and residential along the Sound Transit 3 corridor. 

“It would make sense because it would enhance the use of the new and expensive transit line,” he said. “Without implementing a wholesale change, it makes sense to increase density in the underutilized areas of Sodo.”

The problem is that those who oppose Sodo zoning changes think any change will lead to a slippery slope toward complete transformation, he said. 

Both Nitze and Liebman believe that eventually market forces will cause a change.

“Industrial zoning protects uses that have left,” Liebman said. “It also prevents new uses from moving in. Any new construction needs to be industrial, but that is not going to move back to Sodo.”

He notes that Starbucks and Seattle Public Schools are office spaces, but that two Sodo light rail stations have no residential uses around them and are barely used.  

“The city talks about affordable housing,” he said. “What better place to put affordable housing than in walking distance to downtown with two light rail stations and a new line from West Seattle on the horizon?”