This is part 6 of the My Neighborhood News Network series on light rail arriving in Snohomish County. You can read part 1 here, part 2 here, part 3 here, part 4 here and part 5 here.

The extension of Sound Transit’s light rail system into Snohomish County is promising new economic opportunities for small businesses in cities like Edmonds, Lynnwood and Mountlake Terrace. But as construction ramps up, some entrepreneurs are also bracing for potential disruptions.

Light rail has been shown to spur business growth around new stations by increasing foot traffic and access to customers. A study by the University of Minnesota found retail businesses located within a mile of light rail stations saw an 88% increase in new businesses in the knowledge sector, a 40% increase in the service sector, and a 28% increase in retail businesses compared to car-accessible areas. 

However, this boost decreases each year by 8%, 6% and 7%, respectively, after the opening. The study also found that the positive effect is strongest within a quarter mile of the stations, with areas one mile away seeing 21% fewer new retail businesses and 12% fewer knowledge sector businesses. 

Mountlake Terrace

In Mountlake Terrace, home to the first of two Snohomish County light rail stations opening Aug. 30, city leaders have been preparing for decades by enabling denser, transit-oriented development near city hall and the town plaza. 

The City of Mountlake Terrace has been developing redevelopment plans for the Town Center sub-area for several years. The original concept was adopted by the City Council in 2007 and was revised in 2011, 2015 and 2019. 

During the 2019 planning process, there was public outreach, including the formation of a Town Center Task Force to focus on the area’s future. This task force consisted of 15 community members representing the public and development interests, along with two liaisons each from the planning commission and city council.

However, some longtime business owners are wary of the impacts as major redevelopment projects get underway along key corridors like 232nd Street Southwest and 56th Avenue West.

Small business owners are also feeling pressure from rezoning changes to accommodate the light rail and House Bill 1110. Those who were hoping to benefit from the light rail station are finding that their proximity to the transit station puts their shops and restaurants in danger of closure or relocation to make room for redevelopment.

Mountlake Terrace’s footprint, which is 4.16 square miles — compared to Lynnwood’s 7.89 and Edmonds’s 10.1 —  gives the city little physical room to work with to generate revenue. Since there are no available plots to develop, developers must build upward, which means tearing down the single-story structures for multi-story, multi-use buildings.

Kirk Ishizaki, owner of West Plaza in Mountlake Terrace, will likely lose a considerable portion of his building for a pedestrian- and bicyclist-only street the city plans to create to accommodate light rail traffic. That portion is almost the entirety of Diamond Knot Brewpub @MLT, and under current plans, the Espresso Break kiosk will be removed to create a full driveway.

 Double DD Meats owner Kim Nygard,and Diamond Knot Brewpub@MLT President and CEO Andy Eason and General Manager Sam Mikelson are not pleased with the changes — especially the city’s proposal to extend 57th Avenue West between 236th and 232nd Streets Southwest as part of the Main Street Revitalization Project. This new road will cut through the building that houses both businesses. 

“So, the thought that after all this time, we thought we had this great benefit coming to use, and it turns out we are watching the lights of the train coming out of the tunnel the whole time,” Mikelson said. “It’s a really bitter pill to swallow.”

Mountlake Terrace City Manager Jeff Niten said that the city expects development of mixed-use buildings to increase following the opening of the light rail station on Aug. 30. “We already have slightly less than 1,000 new residential units and approximately 21,000 square feet of new retail in the permitting pipeline within the Town Center boundary,” Niten said. 

The city was unsuccessful with its recent application for a federal RAISE grant (Rebuilding American Infrastructure with Sustainability and Equity), which would have helped develop the infrastructure needed to realize the Town Center vision. However, Mountlake Terrace plans to move forward with some of the work for which they have funding secured, Niten said.

Niten also added that the city is designing 57th Street, which will likely impact nearby businesses. “Public outreach for that portion of the project will likely begin this fall, depending on the status of the RAISE grant,” he said. “It’s possible, but based on experience, I highly doubt that any construction on 57th will begin before 2027.”

“If there’s nothing that can be done about 57th going through, I think the next steps are speaking to city council and just sharing our story, you know, talking about the plan and really asking for just good communication,” said Andy Eason, Diamond Knot Brew Pub CEO. “We shared that vision of light rail coming in, having accessibility. This community has been so good to us all through the construction, everything’s been wonderful.”

Lynnwood

While Lynnwood has long been a shopping destination anchored by Alderwood Mall, which opened in 1979, the retail sector has continued to evolve in a mix of strip malls, shopping centers, restaurants and hotels. With the Lynnwood Link City Center Station scheduled to open Aug. 30, the city has been preparing for transit-oriented development, which has spurred interest from real estate developers and is expected to bring significant changes to the business landscape.

Lynnwood Manager of Communications and Public Affairs Nathan MacDonald said that the city has been anticipating the development of mixed-use projects as more people move closer to the light rail station and businesses are eager to support new neighbors with additional services.

“Being near transit service like this is a significant draw for people,” MacDonald said. “This includes developing the City Center as envisioned into a downtown setting for Lynnwood, but also that means some of the existing businesses may decide to relocate, sell their property or property management companies may not renew leases. The Development and Business Services Economic Development Team is supportive of finding new locations to maintain customer continuity supporting our business community.”

 MacDonald added that the city is also reviewing anti-displacement strategies with Sound Transit as part of the planned Everett Link Extension – with support from the Lynnwood Chamber of Commerce. In addition, Lynnwood has hired a business development program manager, Selamawit Habte, to assist businesses with resources.

Haven Dance Academy Director and Owner Bethany Weed, who since 2016 has operated a ballet studio in the Bryant Building just north of the Lynnwood Transit Center, said that the most recent Sound Transit construction phase has been particularly challenging. 

“It has greatly impacted our daily operations and access for the dance staff and families,” Weed said. “However, I also am looking forward to how things will look when it is completed. The other finished areas of recent construction projects look really great in the area, and I’m excited about the potential for more visibility and access to Haven for people that are outside of our current radius.”

Weed said that most of the families who come to Haven Dance Academy will not use light rail on a daily basis, but she has heard several people say they look forward to more options for heading south for events or during their work day.

While she is not concerned about the construction noise, Weed is worried about public safety and how the streets will be arranged. “I am concerned about security with an unknown influx of people coming and going right around our building,” Weed said. “I’m really disappointed with losing two exit points from our driveway as well as many of our parking spaces. I’m also a bit concerned with how families will be able to enter and exit our space during high traffic times onto 46th that connects with the carpool entrance or onto 200th with them adding more lanes of traffic.”

However, Weed said that the city’s transportation department gave her access to a marketing professional with a small credit to improve their Google advertising.

Commercial gentrification

Would neighborhoods near light rail stations be more at risk of gentrification? And would residents be more at risk of being displaced? 

This is difficult to predict since research shows a majority of U.S. cities do not get gentrified much when a new light rail system is built.

While gentrification generally refers to the influx of affluent people and investments in low-income neighborhoods, commercial gentrification is where new, upscale businesses move into lower-income neighborhoods, often displacing or replacing long-established local establishments that cater to the existing community. 

Commercial gentrification tends to have high business turnover rates, less business retention and fewer minority-owned “mom-and-pop” shops. In a 2017 study of several mixed-use neighborhoods in New York City, the researchers found that retail turnover was influenced by the type of business, the area’s commercial infrastructure and the neighborhood’s consumer profile. However, when all these factors are considered together, consumer-related characteristics explain turnover more than the local commercial environment.

For example, businesses providing essential and frequently used goods or services are more stable, and chain stores are more likely to enter markets with lower housing prices, growth potential and possibly less-organized opposition. Neighborhoods with fewer general retail stores (not including food services) and larger businesses are more stable. 

Also, neighborhoods with larger households and a higher percentage of white residents have less retail turnover, while population growth is the strongest predictor of higher turnover, the researchers reported.

In another study where two light rail stations opened in two Hollywood neighborhoods in 1999, the researchers found that West Hollywood had gentrified between 2000 to 2013 while East Hollywood – which has a higher minority population (Koreans, Latinos, Armenians) – had very little gentrification. During that time, the Latino population had increased by 7.4% in Los Angeles County but decreased by 6.2% in neighborhoods near the new transit stations.

“We know that access to reliable transit does often lead to more people wanting to live and work near the stations,” Sound Transit Public Information Officer John Gallagher said. “That in turn can increase property value and rents. That’s why our transit-oriented development program is so important to the agency, to ensure that affordable housing remains available near stations.”

As part of this program, nonprofit developer Housing Hope plans to build 167 apartment units next to Lynnwood’s City Center station. These units will offer a child care center, health care clinics, a job training program and ample recreation spaces. The apartments would be offered to people making 30-60% of Snohomish County’s annual median income. Construction on this project would likely begin in early 2027 and finish at the end of 2028.

“We are still in the process of being officially awarded the housing build,” said Joan Penney, Housing Hope’s senior director of resource development, marketing and communications. “We have made it through the first round.”

Even with the promise of affordable housing, new light rail stations may increase gentrification in surrounding neighborhoods, although the effects are not uniform across all U.S. cities, according to a 2017 study of 14 U.S. cities. 

For example, in Denver, Colorado, neighborhoods near light rail stations saw a 4% relative increase in white population and a 26% increase in a “neighborhood change index” compared to areas without stations — as measured from the light rail stations’ opening in 1994 to 2010. This index shows how much a neighborhood’s wealth, poverty, demographics and physical environment has changed over a specific period of time.

San Francisco experienced significant gentrification near light rail stations between 1980 to 2010, with relative increases in income (31%), white population (4%) and decreases in poverty (3%).

Since the construction of Sound Transit’s light rail stations in Rainier Valley, land values and rents near the station have risen sharply. For example, new buildings near the stations have pushed up average monthly rents in Rainier Valley from $700 in 2008 to $1,000 in 2017 for larger apartment buildings with 20 or more units. Land values near the Othello station increased by 513% between 1999 to 2013.

Gallagher said that it’s hard to say what portion of the changes that are happening are the result of transit, and how much are that result are happening in the region and nationally.

“Certainly, the [International District] has maintained its identity even as it struggles in the face of those broader changes,” he said. “[The] Roosevelt [neighborhood] was already undergoing dramatic changes before the opening of light rail. Simon Properties’ development plans for the Northgate mall obviously capitalize on its proximity to the station, but again, the decline of American malls in general certainly seems to have been a factor in the plans.

“The overall changes that happen to a neighborhood once light rail is in place are really more the purview of the various municipalities, as this is an urban planning issue,” Gallagher continued. “During construction, we offer support to local businesses through a program called Loyal to the Local. Once projects are completed, however, our focus is on the operation and maintenance of the system.”

In Mountlake Terrace, Niten said that the city is working with the Mountlake Terrace Chamber of Commerce and specific businesses within the Town Center area on anti-displacement initiatives.

“I’ve approached DD Meats specifically to ask about their requirements,” Niten said. “They are a treasured institution here, and we will do anything we can to retain that business in our community. There are also potential partnerships with future development interests. Just about any building owner I know of would love to have a destination business, like DD Meats, in their building to draw customers to other retail opportunities close by.  The public outreach as part of the 57th design project will also include residents of course. We’re very excited about the future for this part of our community, but recognize the change will have an effect on our neighbors. Our goal is to produce the city’s vision while recognizing the impacts to people who call Mountlake Terrace home.”

— By Nick Ng and Rick Sinnett with reporting by Misha Carter

Coming up: Getting to the light rail stations