When Issaquah Highlands developer Port Blakely announced in August of last year that the Regal Entertainment Group would open a 14 screen, 64,000 square foot theater in the fledgling neighborhood, it was a timely piece of good news.

As the economic recession shelved the expansion plans of many retail and commerical operations, Port Blakely were struggling to find any businesses to move into the area. Microsoft, and The Central Market, were two businesses that withdrew their plans to move into the Highlands, and City of Issaquah staff and commissioners were concerned about the imbalance between residential and non-residential development.

It was hoped that a new Regal cinema might bring other retail opportunities with it.

However Port Blakely Senior Adviser in the Highlands, Judd Kirk, said last week there were still a number of planning challenges that would need to be overcome to ensure the Regal development proceeded as scheduled.

Foremost among them was providing enough parking spaces for movie-goers.

Speaking before the City of Issaquah Major Planning and Growth Committee (MPGC) last week, Kirk said that while Regal was “still positive, and they want to be here,” there were a number of “challenges” the two groups were working through.

It is understood that Regal wants Port Blakely to provide more spaces than their current plan provides, but that the developer could not afford to meet the significant cost of hitting Regal’s parking space ideal.

“A three story parking garage is very difficult to finance and build in this market,” Kirk told The Reporter this week.

City of Issaquah’s staff liaison with the Port Blakely development, Keith Niven, said the current plan easily satisfied the minimum parking space requirements of the city’s planning code.

“But (Regal) want way more parking spaces than the code requires,” he said.

Kirk put that figure in the neighborhood of 600 to 700 stalls, during peak events.

At their cinema near Pickering Barn in Issaquah, Regal enjoy extensive parking space for patrons, thanks to the lot that sprawls across a number of strip mall configurations, and the flagship Costco store. Space in the Highlands will be a little tighter.

Traditional surface level parking lots are seen as being the antithesis of the green, sustainable, and modern development that Port Blakely envisioned in the Highlands.

Niven added that while the city was limited in what kind of parking development it could insist upon, a vertical parking garage structure was clearly preferable in terms of minimizing the amount of impervious surface. Impervious surfaces exacerbate storm water management problems, as rain, and other runoff, cannot be filtered through ground soil and instead passes untreated into nearby watersheds, such as Lake Sammamish.

“But over the cost of $18,000 per spot for a parking garage, compared to $5,000 per spot for surface level parking, it can get expensive,” Niven said.

Kirk and Port Blakely were proposing building a temporary parking lot – likely a simple, tarmac surface on flat ground – to satisfy the requirements of Regal in the interim, before building a parking garage when the development picked up and Blakely had more money to invest.

The question then would be whether the city could hold Port Blakely to a commitment to build a garage at a later time, given the uncertainties of the Highlands development, and the number of amendments to its agreement with the city so far.

“We haven’t insisted on it being in a garage, but we would like it to be,” Niven said. “If, ultimately, they come in with a plan to for 800 lots and somehow it meets the design guidelines for the village, then that’s what they can do.”

Kirk said Port Blakely was actively working to satisfy the parking requirements for Regal, and for current and future tenants in the area.

“It’s not just for Regal. The town center has to function for all patrons,” he said, adding that Regal’s parking requirements could not be looked at in isolation, but only in relation to other land-use requirements, now and in the future. “It ripples through all the planning.”

The goal is to provide sufficient parking to accommodate the varying peak loads – day time for office and commercial space, and evenings and weekends for restaurants, cinemas and retail outlets.

“None of us want to build a couple of hundred parking spaces that only get used 20 or 30 times a year,” Kirk said.

Kirk said King County would allow patrons to use the nearby Park and Ride facility on evenings and weekends, outside of peak commuter times.

Niven said Port Blakely would begin a process of community outreach this summer, involving the Issaquah Highlands Community Development Committee, and the City of Issaquah Urban Village Development Commission, to judge support for a phased parking lot approach.

The issue of parking is one the city is eager to explore.

Among the draft Issaquah City Council goals for 2011 is to examine options for providing parking in Olde Town Issaquah, and to include such direction in the city’s Capital Facilities Plan.

A spokesperson from Regal was unable to give any insight into the development’s parking requirements, and deferred all related questions to Port Blakely.

“We lease the physical building itself, not the parking structures,” the spokesperson said. “It’s up to the developer to provide that level of infrastructure.”

Regal confirmed they still plan to open in the Highlands in the second quarter of 2012. They would not comment on whether a new cinema in the Highlands, would force the closure of the existing Regal cinema in Issaquah.

Regal’s concern over parking in the Highlands came as MPGC members, City of Issaquah councilors Maureen McCarry, Fred Butler and John Traeger, sought an update of Port Blakely’s effort to lure non-residential developments to the neighborhood.

Kirk said that senior management from a large grocery chain, thought to be Safeway, had visited the Highlands in May. Port Blakely are hoping to make an official announcement about a Safeway store there this summer.

“We hope,” Kirk added.

He said his company had decided to pull the application for a gas station in Highlands, to give them an opportunity to consider its suitability “in context with other developments.”

The gas station proposal, although apparently approved by a majority of Highlands residents through a Port Blakely conducted survey, had proved unpopular with many residents, who saw it as running contrary to the company’s stated aim of building a sustainable, and environmentally and socially sensitive development that promoted pedestrian accessibility.

Kirk said they were still working with developer Opus Northwest, which backed out of a development agreement for a shopping center in the Highlands last year but is still involved in developing a site near the Swedish Hospital currently under construction.

“They are actively involved, but in this market, actively involved isn’t a lot of activity,” he said. Kirk added what would go on the site had not been decided.

“It could be office, it could have retail. It could have some residential, we don’t know yet.”

“There’s already a lot of residential,” McCarry said. It is a familiar refrain.

Kirk said that proceeding with the plans in place was crucial, to create an environment that was attractive to retail and commercial companies.