Kent City Council denies developers’ pleas to change limit on large warehouses

The Kent City Council didn’t back down on a land-use zoning change to restrict large warehouses in the Valley despite pleas by developers to repeal the limits.

The council last month unanimously approved a interim zoning ordinance to limit large, trucking-intensive warehouses in half of the Kent Valley industrial zone. Several representatives of local developers testified and submitted letters on Tuesday to the council during a public hearing requesting the council to change its stance.

“We are here asking you take action to repeal the interim zoning ordinance,” said Nancy Rogers, an attorney for Tukwila-based Segale Properties that has a 38-acre site and a 10-acre site impacted by the change where the company wants to build large warehouses.

City leaders are looking to change the Valley from less of a warehouse center and more retail or commercial businesses that bring in more tax revenue and fewer trucks that quickly wear out the streets.

The new code restricts new buildings to no more than one dock-high loading door per 40,000 square feet of gross floor area. The footprint area of new buildings is limited to 125,000 square feet. The interim zoning measure is expected to be in place for one year when staff, a committee with business representatives and the council will look at any potential changes to the code.

Segale owns a 10.25-acre site at the northwest corner of South 212th Street and 59th Place South (east of the Boeing Space Center) where it has spent millions of dollars to prepare the site for warehouse construction, according to a letter submitted by Rogers to the council.

“Segale was literally days away from submitting a complete building permit application for a 157,000-square-foot industrial distribution warehouse on the 10-acre parcel when the City Council adopted the moratorium,” Rogers said in the letter.

Segale also owns about a 38-acre site at the southwest corner of South 196th Street and 68th Avenue South (aka West Valley Highway), just north of the Boeing Space Center. Rogers said the company also has spent millions of dollars preparing that property for a new distribution warehouse development.

“All of that has come to a grinding halt,” said Mike Pruett, Segale Properties senior asset manager, during the public hearing. “We have millions of dollars invested in those properties and the plug has been yanked. This impacts us a lot.”

The Legislature changed Washington in 2008 from an origin-based system for local retail sales tax to a destination-based system, taking away the city’s tax revenue from its many warehouses. Kent gets about $5 million per year from the state in mitigation funds for losing that revenue, but legislators have looked at taking that streamlined sales tax mitigation away, although this session they approved keeping the funds flowing to Kent for at least two more years.

“There will still be a place for warehouse jobs along with some other retail,” Council President Bill Boyce said after the public testimony as the council made no motion to repeal the zoning ordinance. “That way we can have a win-win and not depend all on warehouses. … I get Segale had the permit ready to go and spent a lot of dollars, but in order for us to go forward we have to make an adjustment. My gut feeling is the streamlined sales tax is going away in a couple of years.

“If we don’t do anything, we are asking for trouble. So we are asking for patience. …I promise you we are not planning on losing jobs. Work with us as we move forward.”

Peter Steinbrueck, a Port of Seattle commissioner, also testified against the city’s restriction on large warehouses. He said he understands Kent’s need to look at a economically-sustainable financial model, but that the zoning change on industrial land isn’t the answer.

“We are very concerned that the interim land use restrictions on industrial lands run contrary to meeting the region’s long-term industrial land needs,” said Steinbrueck, who represented the Northwest Seaport Alliance, a port authority comprising the seaports of Seattle and Tacoma.

Mayor Dana Ralph responded after the testimony that she supported the council’s action.

“It gives us the opportunity to introduce some spot, additional multiple uses,” Ralph said. “If we can introduce a retail or commercial use here or there in a small footprint, it has the potential of doubling the revenue to the city of Kent and then allows us to provide services of road infrastructure, police and parks.

“We are planning for what makes sense for the future of our city. … If that means smaller warehouses, maybe there is a way to put three buildings on a site, instead of one large one.”