Developers submit visions for Aloha, Old Town properties

The site of the former crime-ridden Aloha Motel could be rebuilt into affordable housing and commercial space with integrated parking under a new proposal.

The project is one of two visions being considered for empty city-owned properties — the Aloha site that has been empty for only a few months, and a property dubbed the Army Street site, which has been empty since 1926.

The proposal for Army Street imagines a multi-story building with a variety of shops, restaurants, offices, apartments, hotel rooms and more.

Both applicants imagine their work setting the stage for future development.

City planning staff solicited ideas for the sites, which bookend the edges of downtown, in late 2015. Staff plans to ask City Council for permission to negotiate with two of three groups that applied to develop the sites; one application was deemed incomplete.

With a view of the waterfront, the Old Town Army Street site at 315 W. Holly St. sits to the northwest of downtown, while the Aloha site at 301 and 315 N. Samish Way sits to the southeast, near the nexus of what the city calls the commercial core and the Sehome Neighborhood.

The public will get to weigh in on the ideas for the two sites at public hearings. The Aloha site hearing is scheduled for the 7 p.m. Feb. 8 council meeting, and the Army Street site hearing is set for the 7 p.m. Feb. 22 council meeting. Both meetings will be held in council chambers at city hall, 210 Lottie St.

The proposals can be viewed on the city’s website at cob.org/properties.

The Balefire

The Army Street site, named for a city right of way that was never developed into a street, has been in the city’s possession since 1946.

It was once occupied by a building called the “White House” that had commercial shops at street level and apartments above, but the structure burned down in 1926, and nothing has been at the site since.

The property has a steep drop-off from Holly Street toward the railroad tracks below.

The proposal for that site came from Ken Mann, a current Whatcom County Council member, who has experience developing commercial real estate, such as the buildings that now house Uisce Irish Pub and Brandywine Kitchen.

Through his company AYGO, LLC, Mann said he envisions a project that would weave unique Bellingham and Pacific Northwest elements and businesses together while channeling the historic character of the original White House design.

The development could create a ripple effect, spearheading the next generation of development in Old Town, Mann said.

“That’s why we called it Balefire,” Mann said in an interview. “Let’s put in a lot of life and vitality and energy into Old Town and downtown.”

“A balefire is an outdoor signal fire especially along seashores,” Mann’s proposal states. “We view the Balefire development project as a beacon that signals a surge of activity in Old Town.”

The preliminary schematic by Mann’s project team, which has not yet been accepted by the city as the official buyer, shows a multi-story building that could include space for restaurants, shops, offices, apartments, a boutique hotel, and a light-industrial manufacturing school and production facility.

The building could incorporate structured parking and large decks with views of the bay and islands.

“I think people are ready for another option to connect with the water, connect with the islands and have a good meal,” Mann said. “It’s going to be something cool, something Bellingham, something funky, something unique.”

Mann said it was too early to make any promises about elements of the project. Aside from not knowing whether the city would negotiate the sale of the property to his team, future feasibility work on the site could change elements of the plan.

“This proposal is the vision I have, and my team shares, but there’s a limit to how much we can promise at this stage of the game,” Mann said. “I want to do 60,000, 80,000 square feet of rentable space. Hotel, apartment, restaurants, light industrial - all those things I want to plug in, but they may not all work out.”

At one time, the Army Street property was lumped into an ambitious project the now-defunct Bellingham Public Development Authority studied over a few years. The project proposed major development along that entire block of West Holly Street, and would have asked each property owner to sign onto the larger development.

Mann said the site work the PDA completed was valuable, but his project will focus on a single site with a smaller scope.

“I think it needs to be a standalone, successful property,” Mann said.

Bellingham Housing Authority

The former Aloha Motel site is a triangular 66,000-square-foot lot at the entrance to Samish Way from downtown.

The city obtained the site under condemnation proceedings after declaring the Aloha Motel a blight on the neighborhood for housing criminal activity.

The Bellingham Housing Authority, an entity founded by the city in 1945 to provide affordable housing opportunities, has proposed building roughly 150 housing units, both apartments and townhouses, on the Aloha site.

“Housing authorities are enabled under state law, and work as independent agencies in close cooperation with their local governments,” said John Harmon, CEO and executive director of the housing authority.

About the time the city started focusing on condemning the Aloha, which had several rooms shuttered due to methamphetamine contamination, the housing authority started thinking about possibilities for the property, Harmon said.

The project, also only a preliminary design that has not yet been accepted or negotiated with the city, describes a two-story parking structure that would blend with the housing above. An interior courtyard would be put on top of the parking structure, creating a green space for residents.

Commercial spaces would be included on the ground floor along Samish Way, and the housing authority would plan to consolidate its offices from a few locations into a space at the new development.

The city used $1.58 million from its low-income housing fund to pay for the required compensation for condemning the property in 2015. Use of that fund meant that the land would need to be developed under low-income housing fund guidelines, or the sale would need to reimburse the money.

If developed as planned, the project should meet the low-income housing fund requirements.

The housing authority’s project intends to open a mix of affordable housing in two phases, Harmon said.

“We haven’t done anything other than the conceptual design .... but we plan for approximately 75 units in each phase,” Harmon said. “The mix of people served in the units would be people who are exiting homelessness, people who are disabled, people who are seniors, and then the general population of low-income people.”

To pay for the project, BHA would apply for money from the state housing trust fund, which is run by the state Department of Commerce, and if and when that money is obtained, apply for low-income housing tax credits through the Washington State Housing Finance Commission.

“It’s a competitive thing to get the tax credits when we apply to the state, it’s not automatic,” Harmon said. “It’s the same with the state at both levels. We have to meet certain criteria to be competitive.”

The fact that the housing would be in one of the city’s urban villages would give the authority’s application more points on the scoring system, he said.

“The city has really been planning for this urban village area,” Harmon said. “We see this as probably one of the first major developments to help realize that vision.”

This story was originally published January 15, 2016 at 12:10 PM with the headline "Developers submit visions for Aloha, Old Town properties."