Live/work concept gaining converts

Zoning option gives developers and buyers more choices, opportunities

From left, architect Fred Wagner, real estate agent David Moody, and building owner Horst Bansner are all collaborating on the redesign and renovation of the former Akres Taxidermist building on Astor Street in Old Town. The building is being redesigned using the city zoning designation of residential multi-office; the eventual use of each of the four units will be up to the buyer.

Dan Hiestand
   The big red building has seen better days.
   Slivers of schoolhouse-red paint splinter from the structure’s fir walls as a gentle, Bellingham Bay breeze floats into its 100-year-old interior through several missing windows. The sound of scraping and a few muffled instructions coming from its second floor are the only indications of activity.
   Look a little closer, past the worn, yellow lettering on the red façade (T-a-x-i-d-e-r-m-i-s-t), and up the well-used steps, through the door and into the house — and it’s evident things have been happening.
   This is a building re-birth, from the inside out, explains property owner Horst Bansner.
   “It’s an incredible space,” Bansner said. “You look at the building from the outside, and it certainly is a unique building. It has a whole lot of character, to say they least.”
   Bansner bought the building — the former Immanuel School of Industries and Akers Taxidermist building at 1303 Astor Street in the Lettered Streets Neighborhood — last fall for $385,000. Renovation of the property, which is listed on the National Register of Historical Places, started in June.
   Once finished, the $750,000 remodel— which has included seismic retrofitting and the addition of a new basement-level parking garage — will feature four 1,300-square-foot units zoned by the city for residential or office usage.
   “It’s designed to be very flexible as a live-work unit, or as just a work-office type unit,” said Fred Wagner, of Grinstad & Wagner Architects. Wagner did the redesign of building, which is zoned “residential multi-office allowed,” he said. “You could have multiple apartment-type units here, or offices or a combination of the two. Horst is trying to incorporate the live-work concept.”

A space with many hats
   The Astor Street project is quite an undertaking, but one that is well worth the effort, said Bansner, 59.
   “Where else do you find space with 14-foot ceilings that open like this?” Bansner asked. “You have the flexibility of creating your own space, and dividing it in a number of different ways.”
   Wagner said each unit has a “core area,” consisting of a kitchen and bathroom. The electrical systems will be oversized to accommodate the potential of office equipment, and telecommunications systems will be upgraded to meet office standards, Wagner said. How the tenant will use the unit — for residential purposes or as office space — is up to them.
   “This particular residential multiple use — every one in the city is different — is one of the most flexible,” said David Moody, a real estate agent with Fairhaven Realty who is marketing the Astor Street property. “That’s why you see chiropractors, accountants, attorneys, consultants, surveyors, engineers … they’re all here. This zoning allows it. You don’t have to get a conditional-use permit. It’s an out-and-out allowable use.”
   Despite the extra expense of zoning it for both residential and office use, Moody said the flexibility the zoning designation provides will pay off in the long run.
   “The amenities are going to be much like the romance that people see in movies of the people living in the loft apartments with the high ceilings and windows — that more artistic living,” Moody said. However, not every proposed use will fly, he said.
   “We’ve had to say, ‘No, that’s not going to work (to potential tenants).’ Somebody wanted to do woodworking in here,” he said. “But it would make too much noise and too much sawdust, and it wouldn’t fit in with the professional atmosphere we’re looking for.”
   Moody, who has lived in Bellingham for about 30 years, said the live-work concept is not a new one.
   “It’s actually not that new,” Moody said. “I’ve known people since I moved here 30 years ago that have lived in an apartment above a retail store.”
   Marilyn Vogel, senior planner with the city, agreed with this. She said low-impact, home-based businesses have been allowed for decades, and commercial zones typically allow both residential and commercial uses in Bellingham.
   The latest development in the live-work concept — from the city point of view — came in 2003, when the city adopted amendments to its land use and development code that provided a clear definition of live-work, a parking standard for live-work sites, and created a residential overlay district in some of the light industrial zones of the downtown area.
   This overlay district would allow property tenants the chance to mix residential and light industrial work, although Vogel said developer interest in this scenario has been limited within the city.
   “Live-work is just another aspect of this modern concept of allowing uses to mix more, and not having to separate every use into different geographical areas,” Vogel said. “There is a certain amount of people who are willing to live with their work, and they want spaces that accommodate that.”
   “In the county, there is lots of light industrial live-work,” Moody said, mentioning businesses dealing with construction, greenhouses, automotive work and pottery. He said he thinks light-industrial live-work scenarios in the city are rarer. “I think they’d rather have their five-acre parcel in the county.”
   Finding a balance for industrial live-work scenarios can be difficult for obvious reasons, Wagner said.
   “There was a concern (by the city) that to do live-work in industrial zones, you could have a conflict between people living next to light-industrial operations,” Wagner said. “What if you had a person grinding metal in one building, and next door somebody was trying to live. Would that limit their operations?”
   Regardless, the city pressed ahead with the overlay district areas.
   Wagner and his partner, Tom Grinstad, are working on a project with developer John Blethen, who is in the initial stages of development for a light industrial live-work site in the 1700 block of Ellis Street. Blethen said he hopes to break ground on the project, a six-unit complex, in the spring of next year. Each unit, split into two stories, would be 1,000 square feet: 500 square feet for living, and 500 square feet for working.
   “We’re thinking it will be a good place for professional people, or maybe somebody that has a small craft,” Blethen said. Massage therapists, attorneys, clothing and jewelry manufacturers — all such occupations could utilize the building, he said.
   “(Light-industrial live-work) is not a new concept,” Blethen said. “It’s just new to Bellingham.”
   Developers building a live-work facility from the ground up — as opposed to renovation, such as the Astor street project — are rare, said city planner Chris Koch.
   “It’s actually a pretty new concept for a developer to come in and plan and build an entirely new project exclusively to live-work,” said Koch, who helped develop the 2003 land use and development code amendments.
   Currently, only one project specifically designed for commercial live-work usage is in the permitting process, Koch said. Canadian developer Jim Laing is working on a project with 50-plus units along East Bellis Fair Parkway. The proposed development would feature 12 to 15 units with commercial live-work office spaces.
   Laing, who has done previous live-work projects in the Vancouver area, said he hopes to build the project by next year.
   Koch said live-work units are a good way for a startup business to begin life.
   “Where these live-work communities are established, usually you have several live-work units built, and they have a camaraderie in them that is mutually supportive,” Koch said. “It’s a really great business incubator concept.”

Can live/work work for you?
   The former Akers Taxidermist building features 10-foot high ceilings on the first floor and 14-foot high ceilings on the second — as well as an opportunity to save money for business owners, said Bellingham real estate agent David Moody.
   “If you have somebody that wants to start up a business, their overhead is way down,” Moody said, mentioning the cost of gas as one expense that could be lessened, as well as the ability to consolidate bills.
   “Probably the main incentive (for live-work spaces) is that you won’t have to pay rent (for a work space sharing a residential space),” said Arvid Garnaas, a certified public accountant in Bellingham. “On top of that, you can write off all the indirect expenses for that space.”
   To calculate write-offs, the first step is to determine what percentage of the property is used for business purposes. For instance, 250 square feet of office space out of a 1,000-square-foot property would equate to 25 percent of the total property being used for business.
   Simply multiply that percentage by common costs such as utilities, mortgage interest, property taxes, insurance, repairs, etc., to determine the write off. Garage space or storage sheds — if used for extra business storage — can often be written off as office space if used for your home-based business, Garnaas said.
   Each business situation is different, so always consult an accountant before deciding which tax breaks your business may be entitled to, Garnaas advised.
   Aside from financial incentives, working from home can be enjoyable, said Bellingham accountant Betty McMaster, of McMaster and Associates Accounting.
   Betty and her husband, Mac McMaster, work out of their three-bedroom home in Bellingham, something they’ve done the past two-plus years. Two of the bedrooms in the home have been converted to offices, Betty said. Mac does tax preparation, while Betty is an accountant, and they both enjoy the live-work lifestyle, she said.
   “We have a dog and cat, and we’re able to be here every day with them,” Betty said. “It’s very calming to be in your space with your animals, and our clients find it very peaceful.”
   During tax season, Betty said she will often bake pies and cookies for clients — home touches that traditional offices can’t feature.
   “I think we frequently get a more relaxed and in-depth perception of what is going on (with clients),” Betty said. “We’ve talked from time to time about getting retail space to be more visible, but at the same time, you have to put a lot more time in and work with more clients just to cover that rent.”
   Working from home is definitely not for everyone, said local architect Terry Moore. Moore said he worked from home when he lived in Seattle about 20 years ago for a three-to-four-year period, primarily to avoid the commute.
   After moving from Seattle to Lummi Island and eventually Bellingham, he said working from home was too much of a distraction.
   “I discovered it wasn’t for me,” Moore said. “I found I had to make a transition out of the house. I had to completely separate (my work and my home life). I ended up doing chores around the house.”
   Currently, his home is three blocks from his office. Moore, who is 65, said he has tossed around the idea of building an office at home if his business slows.
   “I could do that as my practice slows down. Fortunately, at the moment, my practice is busier than it’s ever been,” Moore said. “I keep thinking it would be nice to move home and save the money that we are paying in rent, but psychologically I’m not suited to it.”



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