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December 17, 2015

Why and how the Hutch moved to SLU

Seattle Daily Journal of Commerce

Nat Levy

Moving Fred Hutchinson Cancer Research Center from First Hill to South Lake Union was the largest land assembly in Seattle since the 1962 World's Fair.

Officials at Fred Hutchinson Cancer Research Center say they will cure cancer in 10 years.

That potential breakthrough would not be possible if the Hutch had not decided about 25 years ago to move from First Hill to South Lake Union, according to Randy Main, the center's vice president and chief financial officer. He was on a NAIOP panel Wednesday that looked at why and how the Hutch created a 15.2-acre campus in South Lake Union.

Main said the best research gets done when people are close because they can collaborate.

Fred Hutchinson's campus today includes 13 buildings with more than 1.5 million square feet of space. Main said the Hutch has room to build another 1 million square feet on its campus.

Main said Dr. Gary Gilliland, Fred Hutchinson's new president, made the proclamation about curing cancer. He wants to expand, and that could mean adding another research building on campus in the future.

Creating the campus started when a team including James Klinger, then at Cushman & Wakefield, and William Justen, then at Koll Co., assembled more than 40 pieces of land from different owners. Klinger is now with Kidder Mathews and Justen has his own company. They were both on the NAIOP panel.

The panelists said this was the largest land assembly in Seattle since the 1962 World's Fair, and it was tough because they didn't have the option of using eminent domain to get the properties.

"It was an amazing saga," Main said. "There was so much energy around it, so much going on. And it was all happening so fast. It was a whirlwind, and we didn't really have time to sit back and think about what could go wrong."

The Hutch has more than 4,000 employees today, and has spun off more than 20 biotech companies.

Around 1987, it had 900 employees and was headquartered on First Hill. The Hutch was growing so it bought an adjacent block on First Hill for $5 million, but a study showed that the extra block still wouldn't provide enough space. So the Hutch then kicked off a search for a new home.

At the same time, Justen was working to make a name for himself at the Koll Co. He did a project at First and Lenora, and then turned his attention to South Lake Union. Some of the old piers were starting to be turned into places like Chandler's Cove. Justen thought these would be amenities for new mixed-use development so he assembled two blocks.

When he heard the Hutch was looking for a new campus Justen consulted with Koll colleagues in Newport Beach, California, who calculated that the Hutch was going to need way more land than it was looking for at the time.

Before choosing the South Lake Union site, officials from the Hutch looked at more than 40 different locations around the region. They considered leasing a building in Fremont before Justen wowed the board with a presentation about South Lake Union. Justen pointed out how various property owners there had connections with the Hutch because they or their family members had been patients.

"I'd never been seduced by a developer before," Main said, "but this was a very seductive presentation."

Then the real work began. Klinger, Justen and others hit the streets to convince more than 40 property owners to sell. Some resisted, and some held out for high prices.

Convincing people to sell got easier once it was public knowledge that the land would be used for Fred Hutchinson's campus, Klinger and Justen said.

The team went to great lengths to get property they needed. They flew all over the country talking to companies that were located in the neighborhood, and they found new space for many businesses they would be displacing.

One example Justen shared involved a man who owned a half block who said he would sell if four other nearby property owners agreed to sell as well. It took several months, Justen said, but the other owners agreed so they called the man, who was at a dock in Hawaii about to sail to Japan. Documents were rushed to Hawaii and an attorney went to the dock to seal the deal before the ship set sail.

"There were all these little stories that just amounted to a huge novel at the end," Justen said.

© 2015 Seattle Daily Journal of Commerce. All rights reserved.

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