GTLO will use governmental and industry information to expose the
environmental damage from ASARCO.

Tacoma's Asarco Site to be Remediated and Redeveloped

By: JOHN GILLIE; john.gillie@thenewstribune.com

February 03, 2008 -- Fifteen years ago, Mike Cohen and his wife, Julie McBride, peered through the chain-link fence that surrounded the former Asarco copper smelter site near Point Defiance Park in Tacoma and considered the possibilities.
The site’s potential was plain to see: sweeping views of Commencement Bay, Vashon Island and the Olympic Mountains; hundreds of feet of low-bank waterfront; and a location adjacent to 702-acre Point Defiance Park.

“The view was just amazing,” McBride said recently. “The potential was enormous.”

Cohen, then a Thurston County custom home builder, mentally filed his impressions of the Asarco site and went on with his business.

A series of well-timed, Cohen-built Pierce County development projects, Asarco’s own bankruptcy and a political fight over another waterfront property along the Foss Waterway would leave Cohen and his company, MC Construction, well-positioned two years ago to bid on taking over the Asarco site. Cohen’s company was one of nine, including some nationally known firms, that entered formal bids. His was the winner.

Cohen’s company now owns the 67-acre site that he pined for 15 years ago. Its plans call for building a compact waterfront community on the copper smelter property complete with a luxury hotel, 100,000 square feet of offices, a handful of restaurants, a score of retailers, some 800 to 1,000 condominiums and 35 custom view homes.

When Point Ruston is done eight to 10 years from now, its costs could top $1 billion, making it the largest project undertaken by a single developer in Pierce County history.

Sitting in his Point Ruston office in a former elementary school overlooking the site, the soft-spoken Cohen talks about why he found the property so attractive.

“There are almost no superlatives you couldn’t use to describe it,” he said. “When Suzanne Britsch, a Bothell real estate consultant who has seen most of the new building sites in the Puget Sound area for the last 20 years came to our site, she said, ‘Mike, this is the best site I have ever seen.’ I’m quoting her because I don’t want to seem like I’m tooting my own horn,” Cohen said.

NOMAD TO HUSBAND

How did Mike Cohen make his 15-year-old vision begin to blossom?

It certainly wasn’t because he was born into a real estate empire.

Big-time developer was hardly the career that Mike Cohen envisioned after high school.

“It’s really not what you would expect from someone who grew up in a family of East Coast liberal intellectuals,” said Loren Cohen, one of Mike and Julie’s two sons.

Mike Cohen’s father, a professor of social work at the University of North Carolina at Chapel Hill and his mother, a school teacher, sent him to school in Vermont because of behavior issues.

“I was one of those malcontents in high school,” said the 56-year-old Cohen.

For several years after high school, Cohen led a seminomadic life, living part of the year in Michigan where his family was involved with a progressive cooperative camp called Circle Pines Center, part of the year in New England where his grandparents had a place and part of the year in California, where he helped a friend build his first home.

“We followed the ‘How to Build a House’ plans in a Sunset magazine book,” said Cohen’s longtime friend Bob Gilbert from his yacht in Mexico. “It was that and the ‘Whole Earth Catalogue’ that guided us.”

At Circle Pines, where the member families helped build and repair the camp, Cohen had learned rudimentary construction skills. It was there, too, that he met his wife of 32 years, Julie McBride. There was some precedent there, Cohen’s parents had met at Circle Pines years before.

McBride was a 17-year-old counselor-in-training. Cohen was five years her senior. After camp, McBride invited Cohen to accompany her and her brother on an extended trip through Mexico. That trip lasted nearly five months as the three drove throughout the country and camped out.

On McBride’s 18th birthday, she and Cohen became husband and wife in a small Mexican coastal town.

“I certainly must have made a good choice,” says McBride. “We’re still happily married.”

HEADING WEST

The two returned to Circle Pines for a summer, and after the camp closed for the season, they set up a small construction company in Denton, Mich.

“I did the books because I have a better head for numbers,” said McBride. But Cohen’s bride also pitched in hanging wallboard and framing houses when necessary.

Three years later, their life changed again when Cohen picked up an issue of Time magazine.

“I saw this picture of this friend of mine. It says, ‘Bob Gilbert, builder for Bob Dylan’s new house,’” recalled Cohen. He called his friend who asked him out to help. The couple moved to California where Cohen became superintendent for Gilbert’s latest contract to build a new home for rock singer Don Henley.

During his tenure with Gilbert, Cohen worked on dozens of high-end homes including those owned by basketball star Kareem Abdul-Jabbar, actress Katherine Ross and musician Herb Alpert.

He learned much about human nature building homes for celebrities, he said.

“Building homes is a very personal business,” said Cohen. “Even though celebrities are very busy people, they always took time out for their houses.”

As a rule, he said, the homeowners were considerate and understanding. Their accountants and lawyers, however, could be difficult.

“They’re hired to make sure things come out right, so they felt they had to find things wrong,” he said.

FINDING A NEW HOME

After a few years in L.A., Cohen and McBride yearned for more trees and less smog. They embarked on what they thought would be a journey of several months that might lead them back to New England. Instead, they were lured by the charms of McCall, Idaho.

Again, Cohen set up a construction company. They stayed almost three years.

“In the end, we found it was a great place to vacation, but a hard place to work,” he said. “There was too much snow. The building season was too short.”

The couple moved to Portland briefly, but met a friend of a friend when they traveled to Olympia to visit Cohen’s sister who was attending The Evergreen State College. (Most of Cohen’s family eventually migrated to the Northwest.) He offered Cohen a job. The two collaborated on building homes for seven years before dissolving their partnership. Cohen then went off on his own, focusing on custom homes.

That business evolved vertically. At first Cohen just built the homes. Then he branched out into buying lots and selling them to high-end homeowners who not only needed a builder, but needed a site. Then Cohen broadened his business to include designing homes because buyers had ideas of what they wanted but needed someone to translate that into a plan.

“I realized that you’ve got to have several profit centers,” said Cohen.

A TACOMA EXPANSION

MC Construction was building two dozen homes a year when Cohen branched out into multi-family homes in 2001, this time in Tacoma. He bought an unusual site on the south side of I-5 looking down on the Tacoma Dome.

“The realty people were telling me I was looking on the wrong side of the freeway. But sometimes you can be too close to something and not see its appeal,” said Cohen. “I had been to Stanley & Seaforts and saw that terrific view and if anything ours was better,” he said.

Hawthorne Hill, the condominium he built on the site, sold out its 44 units before it was finished.

Moving on from Hawthorne Hill, Cohen bought another unconventional site in an obscure neighborhood near The News Tribune, south of South 19th Street. He and a partner also snagged a hilltop site overlooking the Tacoma Mall.

The south of South 19th Street site faced the east side of Allenmore Golf Course. Its relatively high elevation above the Nalley Valley gave it good views of Mount Rainier. Again, Cohen struck gold. Nearly all the units had been purchased before the building opened. “Allenmore East is secluded, and then there’s the view,” he said.

Near the mall, Cohen has built a two-phase apartment and condo project called Apex. The first Apex building is full. The second building, which is just being completed, has attracted strong interest, he said.

BATTLE ON THE WATERFRONT

Meanwhile, Cohen saw the potential for residential development on downtown’s Foss Waterway. But instead of waiting for the Thea Foss Waterway Development Authority to open bidding for a tract on the waterway’s west side, Cohen assembled a parcel on the waterway’s east side, north of the Murray Morgan Bridge. The tract’s nearest neighbor was an oil tank farm. The land was properly zoned for the mixed-use, nine-story office and residential building that Cohen called Crosswater, but the possibility of a residential invasion of what had been an exclusively industrial area stirred opposition from big players such as the Port of Tacoma, the Tacoma-Pierce County Chamber of Commerce, Simpson Investment Co. and others. The oil company neighbor with whom Cohen had been negotiating for a revised access scheme suddenly turned hostile.

“One day someone from Dallas called me up with a major Texas drawl. He said to me, ‘Mike, if I were to work with you on this proposal, my board would think I’m crazy,’” Cohen remembers.

The industrial group appealed Cohen’s permits. While he was fighting those regulatory battles, 32 potential homeowners made $10,000 deposits on units in the proposed building.

After 18 more months, Cohen won in court, but the prospect of the Asarco site had diverted his attention and his resources.

Last year, Cohen sold the Crosswater tract for more than $5 million as the site for the Urban Waters research center. That center, in collaboration with the University of Washington, will conduct research on urban aquatic pollution and its cures.

“That was a tremendous silver lining,” said Cohen. “If we had built Crosswater, I know it would have been a tremendously successful project because we were getting such a great market response even without trying. But if we had been building that project, we wouldn’t have financing, the time or the ambition to do the Point Ruston project,” he said.

PATIENCE FOR GROWTH

In the process of building his business, Cohen established a reputation for patiently dealing with problems.

“He has a reputation as a straight-forward, dependable, honest guy,” said Inge Marcus, a retired Thurston County academic who has employed Cohen’s company numerous times for major remodeling projects.

That patience might be called on repeatedly in getting a complex project like Point Ruston done.

The regulatory and political issues of building on the copper smelter site could be daunting.

Cohen and his lieutenants must deal with an alphabet soup of state and federal agencies and local jurisdictions.

The smelter was located in two cities, roughly 45 percent in Ruston and 55 percent in Tacoma. Each has its own rules and plans for how it wants the land developed.

Tacoma’s Metropolitan Park District is a major player in the redevelopment planning because of nearby Point Defiance Park and the district-owned land adjacent to the smelter that it leases to the Tacoma Yacht Club. That land originally was created when the smelter dumped molten waste products from the copper smelting process into the water where they formed rock-like slag.

The site’s long shoreline makes it subject to shoreline laws and regulations overseen by the state’s Department of Natural Resources and the Department of Ecology.

And the tract has long been a focus for the federal Environmental Protection Agency because Asarco’s decades of smelting of high-arsenic copper ore left the smelter grounds and properties for blocks and even miles around contaminated with arsenic and other trace metals. Asarco spent more than $100 million cleaning up the smelter and surrounding property, but the job wasn’t complete when Cohen and his partnership, Point Ruston LLC, acquired the land. They pledged to finish the job.

Cohen said his partnership already has invested some $22 million in the site and it has yet to start building its first residential or office structure. Some of that money has been spent on further environmental cleanup, but millions more have been spent on navigating the planning and regulatory issues toward getting final approval to begin construction.

Last fall, Cohen had hoped to begin construction of his first condominium building, followed by an office structure in December. That groundbreaking now looks more likely to be held in April. On “Stack Hill” above the flatter area where the main smelter buildings stood, Cohen has finally gained approval to begin construction on the first of the 35 high-end homes. He expects that roads and sidewalks will go in shortly and construction of the first model home will begin this month. Stack Hill is where the smelter’s 562-foot smokestack stood.

BUILDING IN PHASES

How does a still relatively small company such as Cohen’s even consider such a large scale project such as Point Ruston?

The secret to Cohen’s plan is that he doesn’t look at Point Ruston as one massive project, but rather as a series of midsize projects that will be built as demand and finances allow.

“In a nutshell, our proposal is based on paying Asarco based on building permits issued, on residential equivalent units,” Cohen said. “The only way we saw as practical was a phased approach,” he said. “We have to complete remediation in phases and we have to develop in phases.”

He could have chosen to build the whole project at once, he said. “Early on, investor types with big bankrolls, they proposed that we do it all at once. But we thought that would be counter-productive.”

Under Cohen’s plan, the custom homes and a few dozen condos come first. More condos will be built as demand allows. Sometime in 2009, construction begins on the 150-room Silver Cloud Hotel and adjacent retail and office structures. Along with the construction will come public amenities such as the esplanade linking Ruston Way with Point Defiance, water features designed by Cohen’s old friend, Bob Gilbert, who he coaxed out of retirement in Mexico to spend about a week a month in Tacoma as the project’s “artist in residence” designing amenities for the public spaces and recommending materials, fixtures and art for the buildings.

Getting all the necessary permits to complete the project could take extra time, particularly in Ruston, where the city contracts out its planning activity to an outside firm.

Cohen enjoys a good reputation with council members and civic leaders in Ruston, although some predict that amendments to the site’s master plan to allow taller buildings could cause controversy.

Ruston Town Council member Brad Huson said Cohen has been sensitive to the town’s wishes and quick to provide information. “I don’t know anyone that doesn’t want Point Ruston to be built,” said former Ruston Planning Commission member Jane Hunt. “I think Mike Cohen’s been very cooperative.”

The regulatory maze can be aggravating at times, said Cohen. But it’s nothing he hasn’t dealt with before.

The same can be said for the current real estate market slowdown nationwide, he said. The timing of his first condos’ completion could prove propitious, he said. By the time they’re ready to sell, the market will likely be on the upswing.

“I’ve lived through a half-a-dozen housing market downturns,” said Cohen. “I suspect we’ll survive this one, too.”