A mixed-use space, geared toward giving northern Federal Way business a face-lift, is in the works.
The economy is putting a damper on the construction business. Financing is becoming nearly impossible, but things will bounce back — or at least Rico Galliano and his wife are counting on it. They plan to construct Steel Lake Plaza, a 17,000-square-foot retail and office space complex planned for 29020 Military Road South, near South 290th Street.
The couple has not filed a formal application, but has met with the city to present their ideas. There are obstacles to overcome, but the area’s potential is ripe, said Patrick Doherty, Federal Way’s director of economic development. Permitting will take at least 12 months and construction another six to eight months.
“In 20 months (the economy) will get better,” Galliano said.
The area is bustling with traffic, but retail is sparse. Galliano hopes his development will rejuvenate the neighborhood.
“There’s a large middle-class population not being served,” he said. “The area deserves to have better.”
The city agrees. Development in this part of town was discussed at the Federal Way City Council’s annual retreat in January. The city has struggled with options it can offer to spur growth in the area, Doherty said.
“It’s definitely something that’s on our radar screen as far as areas to improve in the city,” he said.
Unlike the city core, this part of Federal Way is not eligible for tax exemptions and the area is somewhat stagnant. There is no real incentive to improve current properties, Doherty said. Existing retail may be locked into leases, creating income for the owner without the requirement of pumping money back into the city’s infrastructure. New construction calls for embracing a risk of failure. Public perception is another challenge.
“There is a little bit of a challenge getting past the existing conditions,” Doherty said.
Opportunities in northern Federal Way
Northern Federal Way has business potential, but needs a risk-taking leader. If someone proves the area can still be profitable, other property owners may be inspired to try their luck with redevelopment, Doherty said.
“The hurdle is just being the pioneer,” he said. “There is somewhat of that phenomena of ‘if you build it (other developers) will come.’”
Galliano is confident he can fill this position. He bought his first real estate at age 18 and has invested in the market since then. After renovating condominiums in Lake Tapps, he and his wife decided last year to try their hands in Federal Way.
“I just like Federal Way,” Galliano said. “I’m a firm believer in Federal Way.”
Galliano’s ideas are fresh and he has cleared one major hurdle already. He bought the Steel Lake Plaza land this past August and financing for construction is promised, given stipulations. He imagines retail such as a central bar and grill, sandwich shop, mortgage office and chiropractor located there. But before the project can launch and the bank releases funds, Galliano must pre-lease, or at least receive letters of intent to lease, 65 percent of the space.
“That is going to be the biggest uphill battle,” he said. “We are trying to attract national and local clientele. We’d welcome anybody to grow this neighborhood.”
The next step for the development is a formal application, associate planner David Lee said. There does not appear to be any major areas of concern for the commercial center and the project is fairly straight-forward and simple, he said.
Check it out
To learn more about Galliano and Steel Lake Plaza visit www.galliano.net
