An early design for the Everett Riverfront development shows a series of businesses between two areas of housing. (Public records)

An early design for the Everett Riverfront development shows a series of businesses between two areas of housing. (Public records)

Ikea spurns Everett Riverfront, forcing developers to adjust

Instead of the furniture giant, a vacant commercial area is likely to have smaller shops and housing.

EVERETT — Ikea almost came to Everett.

The city spent months in talks with the world’s largest furniture company about potentially bringing one of its stores to the Riverfront development off 41st Street, according to new public records. The city and Ikea were preparing a proposal that would have gone before the planning commission and City Council.

Ikea pulled out of the talks in late 2017, putting an end to a purchase agreement. No reason was provided, according to the landowner.

Now, the developers are regrouping on what’s next for the site — one of the few large, vacant areas left near downtown. They are collaborating with the city on a new concept, said Derek Straight, the manager of Riverfront Commercial LLC.

“We’re committed to developing a high-quality project that meets the demands of the market today and obviously is financially feasible,” he said.

Preparations for future construction could start later this year. The new designs are more in line with the original plans for revitalizing that part of town, Straight said.

“It will focus on small shop retail, entertainment and housing,” he said.

The Riverfront has a designated commercial area. The location is the former 65-acre landfill, between the new houses off 41st and the new townhomes off Pacific Avenue. That stretch hosted mills in the past.

A 2001 consent decree places restrictions on development at the Everett Riverfront, the site of the former landfill and the famous tire fires. (Washington state Department of Ecology)

A 2001 consent decree places restrictions on development at the Everett Riverfront, the site of the former landfill and the famous tire fires. (Washington state Department of Ecology)

The homes appear to be selling well, but the city’s contract with the developers required 400,000 square feet of retail space. Residents have expressed a desire for a grocery store, a movie theater and restaurants.

Who is responsible for that part of the contract gets complicated.

The city sold the land about a decade ago to OliverMcMillan. In 2013, it was bought by Polygon Northwest, a homebuilder that later was acquired by another firm. Shelter Holdings, a company with ties to Polygon, has taken over its commercial properties, including the landfill. There’s also Riverfront Commercial, the property owner that’s affiliated with Shelter Holdings.

If nothing comes together on the site, the city can reclaim the commercial area, documents show.

An earlier deadline for that provision, June 2017, was extended for another year, into June, said Meghan Pembroke, a spokeswoman for the mayor’s office.

“Our goal is to see good development occur on the landfill,” she said. “That is why we are working with Shelter on their new proposal. If the Shelter proposal does not work, then (a) buyback will have to be considered, but it is not part of our current discussion.”

The unrealized dreams for the Riverfront have been a topic at recent public meetings.

In February, city treasurer Susy Haugen cited the lack of development there as a factor in Everett’s long-term budget problems. The new stores were supposed to bolster city coffers: Sales tax accounts for 20 percent of general fund income.

But the former landfill — the location of Everett’s famous tire fires in the 1980s — comes with red tape. The property remains under a 2001 court order involving the state Department of Ecology. The Snohomish River also runs nearby.

The Riverfront project included obligations for the city as well. The 2017 budget book says the city would begin construction on a three-acre public park in the development that year.

The city has budgeted $1.98 million for that effort. Additional funding is needed before the work can be scheduled, Pembroke said.

And so much for Ikea.

The proposed Everett store would have been similar to the 399,000-square-foot Renton location, the only Ikea in the state. The canceled purchase agreement was between private parties, and therefore is not a public record.

Riverfront Commercial had been talking to Ikea since 2013, not long after purchasing the property, Straight said. The housing market remains hot, but the retail business is shifting toward slighter footprints and services you can’t get online, he said.

Ikea would not confirm the Everett negotiations. “Until there is a formal announcement from Ikea advising of a new store, there’s no information that could be shared about opportunities we may evaluate,” the company said in an email.

Last fall — around the same time the Riverfront deal fell through — international news outlets reported that Ikea was moving away from its expansive warehouse floorplans. It wanted to be better poised for Internet shopping and urban centers, the stories said.

Rikki King: 425-339-3449; rking@heraldnet.com. Twitter: @rikkiking.

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