Washington Developer of the Year, Opus Northwest

Developer of the Year

By Lucy Bodilly

If integrated design is haute couture in the construction industry, then Opus Northwest is the equivalent of Ralph Lauren.

Integrated design is a natural when the developer, architect, engineer and contractor all work for the same company and sit in the same office in Bellevue, Wash.

Success in the real estate market and its innovative approach have earned Opus Northwest LLC the title of Developer of the Year in Washington. The company is lead by Tom Parsons, senior vice president and manager for Washington and Oregon.

A national company with its main office in Minneapolis, the business model is so successful that the Northwest office is planning to hire 80 designers this year. That's also a sure sign that the local real estate business is picking up.

For Opus, the statistics are promising. In 2004 it spent $300 million on its projects with 60 percent of that going to retail, 15 percent to residential, 15 percent to industrial and 10 percent to build projects for a third-party owner. That translates to $130 million in retail projects, $300 million in residential, $300 million in suburban office space and $75 million to $100 million in industrial work.

The new employees will not all be working on what was considered the mainstay for Opus, developing and building office space. Currently under construction is a project on Madison and Eighth streets in downtown Seattle, close to the Swedish and Virginia Mason Hospitals. The lower floors will contain office space for physicians and the upper floor apartments will be priced to attract a variety of hospital workers.

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If any construction project can be considered a sure thing, Opus' $200 million, 150-unit Second and Pike project is it. Located one block from Pike Place Market, its views of Puget Sound and the Olympic Mountains will be preserved, barring changes in the zoning law.

"There is a height restriction on the property between ours and the Market to preserve its historic integrity," Parsons said. "We are still buying the land from the Sammis Foundation, but we already have a considerable list of interested buyers." The project is under review at the city of Seattle for its multiple-use permit, and construction is expected to start in June 2006. Now under construction is a 180-unit residential project on Bainbridge Island, expected to be complete in June.

The other unusual aspect to Opus' practice is that all its projects are design-build, a usual choice for private projects in Washington, because of state tax regulations.

"We need to change the laws in the state of Washington especially so that design-build contractors are not penalized," Parsons said. For Opus, design-build is still profitable because the firm can bundle contracts to avoid the tax. "We save money working design-build, even if the sales tax is included," Parsons added.

Opus retains flexibility in the marketplace by avoiding land purchases, Parsons said. "We usually enter into option agreements and then try to get the permits and identify users before we buy," he said. "We only buy the land if the project has already been presold or preleased. And we always consider zoning and the permitting process."

Another promising sector for the company is the move into public/private ventures with cities looking to develop mixed-use projects that bring retail, office and residential to a transit hub in the downtown core. "We excel where there is a public investment piece of the pie," Parsons said.

Parsons started his career in the real estate business about 20 years ago after getting laid off from a job in a different industry. "I had some friends who were in real estate and realized it was a good business for somebody who was a 'C' student in college," he said.

He first worked for Fischer Properties in Seattle. "They are also a closely held, family-owned company with a lot of similarities to Opus," Parsons said.

During his seven years at Opus, he has helped the real estate industry along by being the 2001 president of the National Association of Industrial and Office Parks, Washington Chapter.