Cornerstone Building adding retail and apartments to Barkley Village | #4 Most Viewed

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This article was originally published Feb. 25, 2013. 

By Evan Marczynski
The Bellingham Business Journal

In the past half-decade, success stories of large construction projects have been hard to find. Unless one is talking about Bellingham’s Barkley Village.

Some examples: the Drake Building, a five-story, 50,000-square-foot residential and commercial complex completed in October 2007. The Laurel Building, home of Scotty Browns Restaurant, was finished in 2008. A building at 1835 Barkley Blvd., which added more than 23,000 square feet of office space to the district, opened in 2009.

And of course, the Regal Cinemas Barkley Village Stadium 16 movie theater, which held its grand opening last December.

Having held its own during the shakeup of recession, Barkley Village has become an epicenter of new development.

“There’s always something going on in Barkley,” Jeff Kochman, president and CEO of Barkley Company, the district’s sole developer, said. “It’s a dynamic area.”

In January, Barkley Co. filed an application with the city to build a new mixed-use building in an empty lot bordered by Barkley Boulevard, Newmarket Street and Rimland Drive. Called the Cornerstone Building, the $15.6 million development will have two parking levels, 10,000 square feet of retail and office space, as well as four stories of apartment units.

Kochman said construction should start in May, as long as building permits and other regulatory factors are squared away. The target completion date is April 2014.

The Cornerstone and the new theater are the two largest projects Barkley Co. has undertaken since the district began taking shape several decades ago, Kochman said.

Development also continues in the theater complex, which Barkley Co. calls the district’s “southwest quad.” Phase one of that area’s construction includes the theater itself, along with three separate tenant buildings meant for food-service businesses.

Kochman said the three buildings will be able to accommodate five tenants, and Barkley Co. projects the buildings will be filled by May. Who those tenants will be has been the source of much speculation since construction first began on the property.

Last December, The Woods Coffee opened a location in an 1,800-square-foot building near the entrance to the theater. A restaurant called Zen Sushi is preparing to open in a building on the south end of the site.

Recently, additional permits have been filed for a Subway restaurant and a frozen yogurt business.

Also included in the theater complex’s phase one plan: the possibility of four additional buildings on the edges of the property near Barkley Boulevard and Woburn Street. Kochman said that while there are no active deals in the works for this potential new development, he expects those sites to see construction within at least the next five years.

Future progress on the property will be heavily “deal driven,” Kochman said.

Barkley Co. also has plans for a second development phase, which include adding structured parking south of the theater and turning much of the surface parking currently at the site into space for new buildings. The goal is to eventually give the property a stronger urban village feel, Kochman said.

Cinematic impact

Business has picked up in the district since the Barkley Village Stadium 16 theater hosted its Dec. 14 grand opening with a premier of “The Hobbit: An Unexpected Journey.” The 16-screen theater can accommodate up to 3,300 moviegoers, according to Regal Cinemas.

While it is too early to assess the full impact the theater is having on nearby businesses, Stowe Talbot, an owner of Barkley Co., said he’s heard from a number retailers and restaurateurs who are seeing more foot traffic and brisker sales these days.

“Anecdotally, we’ve heard from most of our tenants that they have seen an uptick in their business because of the theater,” Talbot said.

Regal’s design of the theater has been a sticking point for some locals. The complex’s architecture is quite different from early, more muted, conceptual drawings, and uses a mix of bright colors and large, flashy signage.

The design does have its fans, but Talbot admitted the response to the theater’s final appearance has been somewhat mixed. Yet since Regal has control over design parameters for its facilities, he said Barkley Co. can only exert so much influence.

“Ultimately, it’s really a question of do we want them there or not,” Talbot said.

Talbot said that compared to Barkley District’s surrounding architecture, the theater’s design was a bit “out there.” But as more development goes in around the theater, he thinks the differences will diminish.

Residential focus

Within Barkley Co.’s development plan for the whole district, a little less than one-third has been completed, Kochman said. The focus up to this point has been on commercial growth, including retail and office space.

But the Cornerstone Building will mark a shift.

Kochman said the company is ready to begin developing more residential units on parcels of land on the periphery of the district. With an established commercial core along Woburn Street and Barkley Boulevard, new residents in the district should find a good base of amenities within walking distance, he said.

“Our interest is to use it for development that makes a lot of sense, and residential makes a lot of sense,” Kochman said. “It also works to compliment all the commercial activity that has occurred out here.”

This commercial-first timeline is an unique aspect of Barkley Village, Kochman said, as most large-scale developments attract residents at the start, then fill in retail stores and other amenities.

Residential development will be a regular component of future construction in the area, he said.

A financial heart

On the commercial side, the Barkley area has attracted a number of Bellingham financial firms, including banks, accounting agencies and financial advisers.

Mark Thoma, managing partner at the Bellingham office of Moss Adams LLP, a financial advising and accounting firm, said Barkley Village has developed into the city’s financial center over the past decade.

Moss Adams moved into the Arch Talbot Building on Rimland Drive in 2001 after it was previously located in the Crown Plaza building in downtown Bellingham. Thoma said he supported the vision that Barkley Co., which has been a client of Moss Adams, has for the district.

“To watch this area grow up along with our company’s growth and development had really been pretty satisfying,” Thoma said.

Both Kochman and Talbot said is the fact that the district is owned by a single company is a key to Barkley’s success. Kochman said this enables Barkley Co. to be more responsive to its tenants.

Kochman said a major challenge for the company moving forward is continuing uncertainty in the real estate market. Financing for new projects has been difficult to obtain, and as developers continue to act with more caution, deals take longer to close.

Yet Barkley Co. has made it through the economic downturn relatively well, he said. Part of that might be due to luck, he said, but it also helps to have well-established, long-term tenants who have also shown resilience.

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