How Kemper Freeman Jr. is Continuing to Raise the Bar

Kemper Freeman Jr. already operates one of the country’s top lineups of shopping, dining, entertainment, lodging, offices, and housing, but he plans to raise the bar even higher in downtown Bellevue with a more than $1 billion addition for which site-preparation work could begin this year.

The 81-year-old chairman and CEO of Kemper Development Co. — which owns and operates Bellevue Square, Bellevue Place, and Lincoln Square, collectively known as The Bellevue Collection — says the next addition to the group, The Bellevue At The Collection, will offer elevated experiences. While The Bellevue Collection already has a menu rich in high-end options, Freeman said it’s missing the “five-star edge” of amenities for locals and visitors who want and can afford the very best.

“This will be the first true five-star mixed-use project in the Northwest … maybe as good as has ever been built in the United States,” Freeman said during an interview in early January inside The Studio, a Lincoln Square office. There, a large video wall projects The Bellevue’s future in lifelike fashion, immersing viewers in ways drawings can’t. “It’s the best shops in the world, it’s the best restaurants in the world, it’s the best hotel in the world, it’s the best apartments.”

Kemper Development hasn’t announced the hotel brand yet, nor the retailers committed to lease.

“We already have three-quarters of our stores already committed to come, providing we build,” he said. “I’ve never heard of that in my life where you can prelease to the best tenants in the world years in advance.”

The Bellevue Collection’s reputation, performance, and location, surrounded by wealthy ZIP codes and high-paying tech companies, don’t hurt. The company’s website touts more than 98,000 household millionaires within 10 miles.

The Bellevue, redesigned from its original four towers to three (to accommodate City planners and prevent further delays, according to Freeman), is designed to include 170,000-plus square feet of shopping and dining, a 150-room five-star hotel, 158 luxury residences, and a premium health and well-being resort. It will be about a three-year project. The residences, still in design, are slated to be rental homes; Two Lincoln Tower at Lincoln Square South includes rental units as well. The Bellevue will not include offices, however — those are relegated to Lincoln Square and Bellevue Place.

Richard Peiser, Harvard University’s Michael D. Spear professor of real estate development at the Graduate School of Design, praised the significance of Freeman’s work. “He’s probably built the most successful retail-anchored mixed-use community in the whole country,” Peiser said.

What started on 10 acres in 1946 as Bellevue Shopping Square under Freeman’s father, Kemper Freeman Sr., has grown significantly under Freeman Jr., evolving into the 51-acre Bellevue Collection. That collection includes the 3-plus-acre parking area south of Macy’s that will give rise to The Bellevue, which will sit above multiple floors of underground parking. The Collection currently totals about 5.5 million square feet and includes 200-plus retail brands, 50 restaurants and 30 quick serve/cafes, three hotels (Hyatt Regency, W, and Westin) with 1,315 rooms, 1.7 million square feet of Class A office space, 360 luxury residential homes, 22 screens at two cinemas, and 12,500 parking spaces, all connected by three skybridges and two car/pedestrian tunnels.

“There’s no place I can think of that has 6 million square feet essentially by one developer in one place. I know it has stood the test of time, and I think a lot of that is attributable to Kemper’s personal commitment and focus on that project. It is quite a legacy that he leaves,” Peiser added.

Freeman isn’t saying when he might pass the CEO baton, or to whom. His focus remains trained on managing The Bellevue Collection and preparing its luxury expansion. He still enjoys working.

“It’s an exciting business … I never get tired of it,” Freeman said. “I’m 81, so I’m not a track star or something, but there’s things I can do, and I understand this as well as anybody there is,” he said of his extensive experience and learning from other industry leaders.

Jennifer Leavitt, vice president of marketing for The Bellevue Collection, has spent decades learning from Freeman.

“One of the most important marketing strategies I have learned from working for the past 37-plus years with Kemper is the importance of looking ahead and using our marketing power through the tough times to come out the other side ahead of the competition,” she said. “During challenging economic times, he didn’t pull back on marketing, but instead challenged me to create new opportunities, even with added costs, to hit the ground running when times were better.”

425 Business spent some time with Freeman as he prepares to launch his latest project. One major source of interest during the conversation was when he might wind down a lifetime of work that began at age 9 on the family farm at Marymoor for 50 cents an hour.

“I loved it,” he said of the farm experience. “There is no school that I’ve ever heard of that teaches you common sense, but I’ll tell you what, if you’re going to survive on the farm, common sense is the only thing that’s going to get you through the day.”

That surely has applied in business, too, including his willingness to listen and learn from others.

“Too many developers believe that God made them smarter than anybody else, so that whatever their idea is beats any other idea, and they go to sleep like a baby at night thinking that’s true,” he said. “It’s almost never true. There are people out there that know more than you do.”

That’s part of why he spent the time and money to take his development team for The Bellevue around the world to visit the very best stores, hotels, restaurants, and more to see what works. That was the homework: figuring things out like he did on the farm. Here’s some of what he had to say. 

You’ll be 82 in October; you’ve got to be winding down (from work), even though it doesn’t appear so. Is there a timeline for you and who is set up to succeed you?

We’ve got some tremendous employees that are here … (and) we’ve got sources of people who have called us and said if anything ever opens up, that’s where I want to work.

Your daughters (Suzanne McQuaid and Amy Schreck, former executives in the company now serving as co-vice chairs of the board) perhaps could be co-chairs of the board someday, but it doesn’t sound as if they are necessarily going to be the next operators of The Bellevue Collection. It sounds as if there might be other people within the organization, or outside the organization?

So far, it’s been my grandfather, Miller Freeman; my father, Kemper Freeman; and me.

But there won’t be another Freeman family member as the next CEO?

We have five grandchildren. …

It sounds like one of your grandchildren could be a future leader of the company?

Yeah. … The other thing with family business: There’s no guarantee that they’re gonna be asked. They can’t just decide they’re gonna do it. They can express interest or not. … One of the jobs that I have to have at this point, and others have had to have, is how are we gonna keep this company going? How are we gonna get it from one manager to the next, to the next, to the next, and have it continue to be successful?

So you don’t have a time in mind, kind of a goal for stepping down and passing the baton to a family member or another CEO … maybe when The Bellevue is completed?

The good news is there’s an abundance of manpower, both male and female, both family and not family.

Is completing The Bellevue kind of your target (for handing off the company)?

I don’t know that I’m gonna make a formal announcement. I think one of the worst things you can do is to announce, “I’m gonna leave as of this day,” because I think that turns on all kinds of stuff. … It would be fine if that’s what happened, or it’d be fine if that isn’t what happened. And we have, from our family and from our employees, we’ve got more than enough people with the capacity to keep this ball rolling, who understand what it is that makes it successful and would be ready to go.

How many employees do you have in Kemper Development?

There are about 300 of us (roughly divided in thirds between operating the company, keeping properties clean, and security). … Two things that Seattle has forgotten all about as a city — shame on them — is safe and clean, and if it isn’t clean, it doesn’t seem safe. … We have a policy on graffiti … if we get hit with graffiti overnight … we will have as many as 100 people come that night and clean it. And the policy is, if we get hit with graffiti, it ain’t there in the morning.

Your website indicates The Bellevue Collection gets about 30 million annual visitors. Is that still a good number?

Plus or minus … I think we went up again last year.

Can you release any data, such as gross revenue or per-square-foot revenue?

We don’t (as a private company). Right or wrong, we get to keep that to ourselves. … But we just had, I think it was the biggest year ever. … Almost every measure you could make on a shopping center, from any perspective, we’d be seen as the top handful in the whole country, out of several thousand shopping centers. … Everything we do is based on, what does the community want us to do that we’re not doing? Or what could we do better? What would work? What’s missing? What kind of shop is missing? What kind of restaurants are missing? What about if we did mixed-use along with it?

Is The Bellevue your focus now?

Well, operating the center is No. 1, and expanding it is No. 2. … Why are we doing The Bellevue? We already have one of the best shopping centers in the country, maybe the best. We already have three of the best mixed-use projects (Bellevue Place, Lincoln Square North, and Lincoln Square South), and they’re all woven together. … (A) Coldwell Banker (commercial real estate expert) was doing some work for us one day … threw out something that changed my life. He said one of the best things you could do is don’t get caught in the trap of, you’ve now built a great center, and … people who build great centers, they can’t wait to build another one, and then another one, and then another one. … He said, “Kemper, one of the best things you could do for good, sound reasons … look to see where you could build across the street from you, a mixed-use project.” … That means hotel, office building, restaurants, condos, apartments, etcetera, and retail. … As our expert from Coldwell Banker told us, “Great retail is the catalyst for all other forms of real estate.” … I feel like I was so lucky to run across people who had knowledge that got shared with me. … (The Bellevue will be the fourth mixed-use project — after Bellevue Place, Lincoln Square North, and Lincoln Square South — to complement Bellevue Square and other pieces of The Collection.)

You talked about the great synergy between the offices and Bellevue Square and vice versa. You must have some sweaty palms over what’s going on with the office world these days, or not? Does it concern you that office work, at least now, is half capacity, roughly?

It does concern me, because we have to understand what’s going on … COVID, that it wasn’t an idea that the people who own the businesses and the office buildings or the tenants in the office buildings all of a sudden wanted everybody not to come to work. … It was down to, what do I have to do to keep my business alive? And the government had more to do with telling people that you can’t be where a lot of people are. … I mean, if you got screwed up by this virus that was going around, you could die from it. That gets your attention. … (With the region’s high-tech concentration) everyone here … could go home and feel like they’re still connected. But I’ll also say that connection isn’t anywhere near as firm as people like to pretend it is. … I’ve yet to meet the person who says this is working as good as it did when people come to work.

So the office environment today makes you nervous, but you don’t think it’s long-term?

I know a lot of people who own these biggest companies here, and there’s not one of ’em that are every day praying that they get back to what they consider far more efficient. … Businesses didn’t build billions of dollars’ worth of office buildings because the format doesn’t work. …

You’re a believer in that foundation still being applicable today, that office foundation?

… If you’ve got an office building, the accidental conversation by the water cooler, just somebody stopping to get a drink of water, and here’s Joe coming the other way, and all of a sudden you have a little chat that wasn’t on your agenda, but it turned out to be the idea of the month. I mean that’s kind of what goes on in well-run businesses. It’s that back and forth that goes on between employees, whether it’s high-tech or whatever. There’s virtue in being together. … We’re human beings, we’re social creatures; we’re not machines, we’re not robots. …

Why did you go to three towers from four at The Bellevue?

To get to this point, to build a five-star project of this magnitude — and we told the City expressly what we were doing, why, nobody suggested we were doing anything wrong — but we said we are gonna take our group of architects, contractors, real estate people to Dubai and be there for four or five days and look over that entire market, which is one of the best retail markets in the world. … We took ‘em to Australia; we took ’em to France, Germany, England: the best retail that we know in the world. We’ve taken our whole development team, all the key members of the team, contractor, architect, etcetera, and we all together looked at, intensively, the best real estate (that’s) ever been built in the world and then said to the best architect we’d ever hired (KPF, of New York, to design The Bellevue. It’s working with Mithun architects locally.)

Did the City ask you to scale The Bellevue down from four towers to three?

We (submitted) what we thought was appropriate there (at four towers, but in working with the City, scaled it down.) … We took 85,000 square feet out of this project. … Now, it’s going to be damn good at 85,000 square feet smaller. It’s still going to be the best there is. …

You also adjusted the atrium area in the middle of the towers?

I’d call this just normal value engineering. It is one of the most difficult things you have to do, but it’s when you build a project and you design it with all your dreams in it, and then you say, “OK; now we gotta say, ‘What can the revenue be from this dream? And does it cover the cost of the dream?’” … I’ve been through this every time in my life; your first round is gonna be attacked by value engineering. It’s appropriate. It’s normal. … It’s just making a correction so that you’ve got a project that when you’re done with it, the revenue can pay the bills.

It’s been a push and pull with the City, but you’ve gotten the project, you’re about to launch?

And we’re friends. We try and maintain our friends, but I’ll tell you what, some people down there make it awful hard (laughs).

The project’s going to happen, right?

Every project we’ve ever announced, we’ve done.