Nov. 9 (Bloomberg) -- Seattle Mayor Greg Nickels, who won re-election last night with a 29-point margin, has a second-term agenda that includes taller skyscrapers, a $4 billion underground car tunnel and a new downtown streetcar line.

Nickels, a Democrat, garnered 64 percent compared with 35 percent for challenger Al Runte, a former professor at the University of Washington. More than 99 percent of precincts had reported as of midnight Seattle time.

Elected in 2001 as the candidate of what he called the consensus-driven ``Seattle Way,'' Nickels led a push for aggressive development and fiscal austerity after a national recession that year. He cut more than $100 million from the city budget and backed a plan by billionaire Paul Allen to redevelop a 60-acre industrial area near downtown.

``The reality is you need a strong tax base to supply any services at all,'' said Bradley Scharf, 61, a political science professor at Seattle University. ``He's achieved a reasonable balance, and he has restored confidence among the investor community for Seattle.''

Since 2003 the Puget Sound region has regained more than 60,000 of 100,600 jobs it lost after the recession and the collapse of the Internet bubble, according to the Washington Employment Security Department. The strongest gains have been in construction and professional services such as accounting and architectural design, the department says.

Tax Windfall

Nickels in September proposed a 6 percent increase in the city's 2006 general fund, to $760 million, after taxes generated $29 million more than anticipated.

In one of his more significant moves as mayor, Nickels threw his support behind Allen's plan to turn a section of South Lake Union near downtown into a hub for offices and housing. The city is spending $47.5 million on a new streetcar line.

The push for denser housing angered some neighborhood groups. Critics called the streetcar corporate welfare for Allen, the Microsoft Corp. co-founder who develops real estate through his Vulcan Inc. investment arm.

John Fox, coordinator of the Seattle Displacement Center, a homeless advocacy group, said Nickels is ``misusing taxpayer funds'' in an Oct. 29 e-mail to supporters.

In his next term Nickels will try to win city council support for a proposal to raise height limits on downtown skyscrapers. He also is trying to win backing for a $4 billion underground tunnel to replace the Alaskan Way Viaduct, a double- deck highway that bisects the Seattle waterfront and was damaged in the 2001 Nisqually earthquake.

Strip Clubs

Nickels raised eyebrows in the traditionally liberal city by proposing a ban on lap dances at strip clubs, approved by the city council last month. Nickels said the ban was necessary to prevent a profusion of new clubs after a federal judge overturned the city's 17-year-old moratorium on issuing new strip-club licenses.

Opponents are collecting signatures to place a voter's initiative repealing the lap-dance ban on next year's ballot.

One project that failed to get Nickels' support was the monorail, a 14-mile elevated line endorsed by voters in 2002 that sparked a public outcry when costs soared to $11 billion. Nickels withdrew his backing in September, calling it ``perhaps the most disappointing day for me'' since taking office.

A proposal to build a less expensive, 10-mile monorail was losing by a 2-1 margin last night.

Nickels' willingness to buck opposition was refreshing in a city that often gets bogged down in debate, said Dan Savage, editor of The Stranger, an alternative newspaper in Seattle.

``We endorsed Nickels because we didn't think he was a Seattle Way type,'' Savage said.

Nickels succeeded Paul Schell, who was the first incumbent Seattle mayor to lose a re-election bid since 1965.

Schell's term was marred by violent protests at a World Trade Organization conference in 1999, criticism of police inaction during Mardi Gras riots that left one person dead in 2001 and the loss of Boeing Co.'s headquarters to Chicago later that year.

To contact the reporter on this story: Peter Robison in Seattle at robison@bloomberg.net.

Last Updated: November 9, 2005 03:01 EST