Everything about the recent $4.25 million sale of an old Tukwila motel on Highway 99 last month looked ordinary except the buyer: Forterra.
With a bold plan and financial backing from prominent Seattle venture capitalists Tom Alberg, Nick Hanauer and others, the land conservation nonprofit bought the Knights Inn to turn it into an international market for dozens of immigrant-owned businesses. It will be called the Wadajir International Market.
Forterra’s long-range plan is more audacious: Help the immigrant community buy the property and build a large residential and commercial project on the site. Zoning would allow a six-story building with a couple hundred apartments.
This isn’t Forterra’s first foray into protecting urban spaces. Last year, the organization partnered with an African-American group in Seattle’s Central District to buy a mixed-use development site.
The Tukwila deal, though, is the first time that major venture capitalists have partnered with Forterra to invest in real estate development.
The concept, which some are calling inclusive development, is a model that could be replicated to help communities without a large amount of capital retain their spaces and become investors in their own communities. It works when wealthy, socially conscious investors put up the initial capital, and a nonprofit group manages the development and gets investment from the groups using the facilities. Eventually, the early investors exit and the community buys the property.
As property values in the Puget Sound region soar, owning real estate has become key to building wealth.
“If you’re not on that bus, then you are being left behind,” said Hanauer, who for years has been lobbying Forterra to do something like this, though this particular idea was not his.
The roots of the plan reach back nearly 20 years, when Forterra came to Tukwila to help the community preserve a green space along the Duwamish River. That was the kind of work Forterra was best known for, though that has been changing as the organization has taken on projects to preserve communities at risk from gentrification.