‘We Can Be Proud Of What We Did’ – Town Square Developer Dan Rosenfeld


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by Ralph Nichols

As work on the six-story condominium/retail complex in Town Square neared completion, principals of Urban Partners held their breath, month by month, until troubled Corus Bank of Chicago paid each draw on the construction loan.

“The good news is we made it to completion. They funded every construction draw,” Dan Rosenfeld, a founder of Urban Partners – Burien’s private developer for Town Square, told The B-Town Blog last week. “Then they went bust.”

Corus Bank was closed and its assets seized by the Federal Deposit Insurance Corporation on Sept. 11. Now the Urban Partners construction loan is held by a joint venture of Starwood Capital Group and the FDIC.

“If we do nothing else in our lives, we can be proud of what we did with this project in this community,” Rosenfeld continued. “In our hearts, we know we have done a great thing in Burien. We took empty parking lots and turned them into a world-class project.”

But the condo/retail complex – which opened last June at the same time as the new Burien City Hall/King County Library – remains only partially occupied with six residential units sold, due to complex financial entanglements completely removed from the control of Urban Partners.

“Every sale or lease of space requires lender approval,” Rosenfeld said. But since the failure of Corus Bank, “there is no one to approve leases or sales. There is no one to even approve prices.”

Starwood currently seems”unwilling or unable” to do that, “but this won’t last forever,” he continued. The financial issues resulting from the bank failure will be resolved, and he expects that most of the condos will be sold and the retail space leased or sold by the end of this year.

Trading Places
Although no longer a principal with Urban Partners, a Los Angeles-based development company, Rosenfeld remains involved with Town Square as “an active partner and investor” through Urban Ventures – a related company that actually owns this property with other investors.

[Note: Because Urban Partners submitted the original private proposal for Town Square, the name Urban Partners is used throughout this story.]

Rosenfeld became concerned in 2007 “that the real estate market was increasingly fragile, and we needed to take a more conservative approach. It was time to get out. But I didn’t want to let this one go.”

Keeping his Burien investments – including Town Square – in his portfolio, he sold his shares in Urban Partners and many other investments to his partners in the development company, Paul Keller and Matt Burton.

“I stayed loyal to Burien,” he added. “It’s a great community.”

In the meantime, Urban Partners, with Rosenfeld no longer a principal, has continued with its other investments and development projects, including the Terry Avenue Apartments in downtown Seattle.

Rosenfeld formally left Urban Partners last year to join the staff of Los Angeles County Supervisor Mark Ridley-Thomas, a friend of 20 years.

Dan Rosenfeld now works for Los Angeles County Supervisor Mark Ridley-Thomas.

As a senior deputy responsible for economic development, land use, sustainability and transportation issues, he now oversees a $1.7 billion light rail project and the $700 million replacement of hospitals that don’t meet seismic codes, just in Ridley-Thomas’ district.

“Transit-oriented and community development remain my great interest,” he said. “The time to develop new real estate will someday return.”

While his personal interest and connections in the Northwest helped him sell the Burien City Council on Urban Partners at the inception of the Town Square project, Rosenfeld admits the L.A. investors face an uncertain future here.

Urban Partners future role?
“Starwood [Financial Group] has very strong rights” to the condo/retail complex, he conceded. “They bought the [construction] loan –with the FDIC after it closed Corus Bank. They control the note.”

The FDIC sold a 40 percent interest in the bank’s construction loan portfolio to the Starwood group for about 50 cents on the dollar – while Urban Partners was attempting to buy its Town Square construction loan directly from the federal agency.

Now Urban Partners is negotiating with Starwood and the FDIC for a restructuring of its construction loan that reflects current financial conditions. “The market has changed since the project started,” Rosenfeld said. “Nothing is easy today.”

He hopes the negotiations will result in either a partnership or similar relationship between Urban Partners and Starwood for ownership and management of the building, or its outright purchase by Urban Partners. The development company’s other investment partners are also involved in the negotiations.

While Starwood and the FDIC own the note on the construction loan for the condo/retail complex, “Urban Partners knows Burien and the project better than anyone else,” Rosenfeld said. “It would be hard for Starwood to focus adequately on this one project in the Corus portfolio,” especially since many of their projects are in the Sunbelt.

With these factors in mind, he speculated that Starwood might seek a partnership or joint management role with Urban Partners for the Town Square building. “Urban Partners has credibility [in Burien]. No one can do a better job for Starwood, or for the community.

“Let’s each bring our strengths to this and get the project sold out. Sell the condos with pending buyers and then sell the rest.” Six condos closed last year, with serious interest from buyers in 34 others despite the fact the sales can’t be closed at this time.

Land for Sale
For now, Urban Partners still owns the three remaining parcels of land on the northern half of the Town Square site. But the group recently listed two of the undeveloped parcels for sale with a commercial broker “to test market interest,” according to Rosenfeld.

The largest parcel, located south of SW 150th St. and east of 6th Ave. SW, is listed for $1.8 million. Immediately beyond the condo/retail complex, this land – originally designated for phase two development of the project – was occupied by the Burien/Interim Arts Space last year.

A vacant half block south of SW 150th St. and west of 6th Ave. SW is listed for $330,000.

At this time, Urban Partners shows no indication that it would let go of the third large undeveloped parcel it owns in Town Square, located south of SW 150th St. and west of 4th Ave. SW, still occupied by the old city hall building.

A proposal for construction of a 10-screen cinema on that site is under study. Yet nothing is carved in stone for Urban Partners, either the parcels it might sell to the right buyer, or the future use of each parcel.

All Options Considered
“We’re looking at all choices,” Rosenfeld said. In the future, Urban Partners could end up developing mixed-income housing or a medical office building or a hotel on the remaining parcels. “All are possibilities. It’s a matter of time and economic recovery.”

Any new buyer of vacant land in Town Square will be obligated, legally, to conform to the original development agreement that Urban Partners signed with the city, according to Dick Loman, Burien’s economic development manager.

City Manager Mike Martin noted last month that Burien “has no money invested” in the private development components of the Town Square, “so the city will not lose any money” if Urban Partners is unable to continue and new investors don’t move in to complete the project.

Rosenfeld remains optimistic. “I don’t know what will happen in the future, but, with our long history here – my family has been active in business in Burien for 47 years – we have made commitments. We set the bar high. Eventually phases two and three will be built.”

Although he provided input to the original Burien City Council when a town square was first discussed, as far back as 1995, “I had no idea I would bid on the site someday, let alone build on it. We are very proud of what we have done together.”

Town Square today – the King County Library/Burien City Hall building, the condo/retail complex and the park between them – is “recognized around the country as a textbook example of first-tier suburban revitalization,” he said.

“It took a lot of determination, and it happened because of the dynamic intervention of the city ten years ago. When we started, parking spaces along [SW] 152nd [St.] were empty after five o’clock.

“Now, with new restaurants and businesses on the street, it’s busy well into the evening,” Rosenfeld added. “We have changed Burien significantly – for the good. Nothing worthwhile is easy, indeed.”

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Comments

26 Responses to “‘We Can Be Proud Of What We Did’ – Town Square Developer Dan Rosenfeld”
  1. TcB says:

    So do they have to finish the town square plan or are they gonna put an ugly medical lowrise there that won’t fit? It seems that I heard two different things here.

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  2. Samantha says:

    Just start selling the damn units… drop the price for now, sell a few… get some retail going with incentives and move on. So damn wasteful just letting it sit there.

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    • TcB says:

      the article “articulates” that the sales really can’t go through because of red tape, the bank that held the construction loans failed and the new owners of the loan are not allowing sales, or something to that effect.

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  3. citizen says:

    Our City is losing TAX revenue every day these condo’s and business’s are not occupied. Mr. Martin does not have a clue…I am not proud of this project.

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  4. jojo says:

    What Burien REALLY needs is a decent organic grocery store. Town square is the perfect place, and what better way to bring instant life to the development.

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  5. Len Boscarine says:

    The problem with Town Square is that the developers did the project in the wrong order. In a project like this you have to start by creating great retail stores. After you do that the market develops for housing and other commercial uses. In any case, it’s completed now so good luck to everyone involved in the project.

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  6. Rob says:

    Dammit I am not convinced thst bulldozing the Bells/Lamonts/Gottschalks building was the correct way to go… and I am afraid I will never be convinced.
    Sign me –
    Old and set in my ways

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  7. jan says:

    Empty or full, when you sit outside on a beautiful May day at the Farmers Market, TS Condos/Retail/City Hall and Library have significantly changed the landscape of downtown Burien. Mr. Rosenfield and our city founders should be proud of how our downtown looks and feels.

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  8. Beatrice says:

    Citizen: I don’t think you know the facts. The taxes are being paid by the developer so the city is not losing money.

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    • citizen says:

      I was talking about the taxes that a business would be collecting….No Business No Tax collected. The city has also lost tax revenue from Meal Makers….Town Square has No business tax revenue being generated by the new construction. Take a look it’s empty.

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      • TcB says:

        but there wasn’t anything there generating tax income from the space before town square went up, just empty buildings and parking lot. Meal Makers tax revenue is being replaced by the influx of new restaurants in town. Meal Makers. Really?

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        • Rainycity says:

          The Burien town council is arrogant and feel they know more about what`s best for Burien than anyone so there is no need to consult anyone on their wrongdoings,,
          When they first starting that “pet” project I said they are trying to take away the small town charm that makes Burien Burien and trying to turn it into an uppity place like belltown,,,
          Worked out great didn`t it???

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        • Rainycity says:

          Meal Makers was there for years and was a place the seniors could go and meet, feel good about being there and just sit and chat, it was friendly, the owner was a local and he just plain got screwed by the town of Burien and it`s council on their whats good for us is good for Burien mentality

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  9. Kai J. says:

    Just like Dubai Tower and half the new buildings in China. Very nice and fancy with ZERO economic viability. Now we have a big empty building that will have to be rented out. At least all the pawnshops and tatoo parlors will have more business. My favorite is that the city can’t afford to repair the streets we drive on but there seems to be enough to buy and water all the pretty hanging baskets from the over priced lamp posts.

    Almost like coucil members past and present see Burien as their own personal legacy. Time to invite a bunch of tax paying Medical Marijuana dispensaries!!

    I know I’m no help here, just venting as I salivate over West Seattle.

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  10. Brad Running says:

    Growing up in Burien in the 60’s was wonderful and the future for Burien looked bright for future growth. A small bedroom community rarely ever given a second look from big brother Seattle. I think that as a professional real estate professional and land expert in our community, I would have done a few things different. Number one who in their right mind would ever try or think of selling a condo in Burien in excess of $400.00 per sq. ft.??? I believe that the developer had good intentions, however let’s get real, Burien is not a Belltown type of area. I would have had a price point in the mid 300K range to mid 400k. I would have made the units more appealing and less ultra modern. I would have had more participation by long time Burien residents on what they thought would work and what would not fly. I think the units are too small and too expensive for what Burien residents are looking for and should expect. I would have sat down with the powers that be in local government and would have been a lot more creative with the way in which they were merchandised and designed. I hope that this project will sell out sometime in the next year or so. I’m a believer and have been for a long time that Burien will never be or should be thought of as anything other than a quiet, friendly town located south of downtown Seattle.

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  11. Rainycity says:

    The Burien town council is arrogant and feel they know more about what`s best for Burien than anyone so there is no need to consult anyone on their wrongdoings,,
    When they first starting that “pet” project I said they are trying to take away the small town charm that makes Burien Burien and trying to turn it into an uppity place like belltown,,,
    Worked out great didn

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  12. Bad joke says:

    Meal makers was an eyesore, this project needed to be done, once the rents and prices come down it will start to fill up but I do agree that the city council has some clueless people on it

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  13. Coverofnight says:

    Unfortunately, with this economy, the Town Square inactivity has a bunch of citizens and businesses feeling ripped off and ignored. I understand the situation they’re in and just have to tell myself to be patient until the economy turns around (which it will) and the project fills up. Additionally, when the entire development is complete, I believe that more citizens will appreciate the Town Square in its entirety. It’s kind of tough to see that with those large, undeveloped parcels of land adjacent to the completed buildings. It didn’t help either to have that trash garden they called an art space that made the area look like a Detroit suburb! Again, be patient…..it should be more inviting when everything’s completed – hopefully, it won’t be 10 years from now, though. And for Kai J.; I’ve seen the Dubai Tower – Town Square is no Dubai Tower – a bit over the top with that analogy. For Rainy City – you’re right on with the Meal Makers comment and for Bad joke, I’d have to disagree with your comment about the council having SOME clueless people on it – they are ALL TOTALLY clueless; time for new representatives!

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  14. Beatrice says:

    If you are concerned about the “seniors” of Burien not having a place to gather (as if we need to segregate them in to a separate eating facility) there is Sal’s Deli where people of all ages gather for a reasonable breakfast or lunch. And the original owner and location probably predated the Meal Makers The current owner is local (Gregory Heights) too. If Meal Makers really wanted to stay in Burien I bet they could have negotiated something somewhere.

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    • Rainycity says:

      Who mentioned anything about segregating them besides you Beatrice,,
      I`m not a senior yet, but I know that meal makers was a place where the seniors THEMSELVES chose to go not because someone segregated them.
      People of all ages ate at meal makers also, and I wasn`t trying to promote them like you are Sals, I was just stating facts ( how is the parking there anyways?)
      And how about dinner?? Oh, by the way, can they (or you) get dinner at sals???
      Oh yeah, They were offered a another place to go,, but that`s another story and another time.
      If the council shit on me like they did meal makers, I wouldn`t want to stick around either, I would just take my ball and go play elsewhere also.
      The council has been slowly pricing folks out of there places of business`

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  15. Hotrodgal says:

    Losing taxes?
    This quoted directly off the Burien Town Square website: “Homes at Burien Town Square qualify for a ten-year tax abatement under the City of Burien’s tax exemption program.”

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  16. Hotrodgal says:

    “We Can Be Proud Of What We Did” – Town Square Developer Dan Rosenfeld”

    Give us a break! It’s always been about money, prestige and federal grants plus
    every time I think about Meal Makers situation, my blood boils.

    Couple Rosenfeld, Urban Partners and rest of the developers with Burien’s sneaky condemnation of the Meal Makers site and you see where it’s gotten us…an un-rentable fancy-pants development in a small town whose City Hall would rather run out our long standing local business people and bring in the big, out of state money brokers.
    Amazing how such a small town could have taken such a large part in the abuse eminent domain powers and is now asking for more funds to repair it’s neglected roads.

    Can’t rent it? Too bad. You made your bed.

    BTW, I’m posting this on Sunday and it, along with my other post, will probably sit in some ones in-box awaiting ” moderation ” until interest in this article runs it’s course…

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    • Michael says:

      Actually, we pretty much work 7 days a week to one degree or another around here. For the record, only your initial comment gets moderated. Once you’ve been “approved” the first time your comments will post immediately as long as we don’t see any problem with what you’re posting and you use the same screen name and e-mail address. The initial moderation is just to weed out spammers.

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      • Hotrodgal says:

        Thanks Michael for the clarification.
        It seemed the few times I’ve posted here it took a very long time and I almost felt censored because that.
        I appreciate the swift post & your follow through.

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        • Michael says:

          Just to clarify, Scott approved your post. I just thought I’d explain why there is sometimes a delay so that you and anyone else that reads this has an idea of what the process is.

          There are occasionally comments that don’t get approved or get edited or deleted. The few I can think of where that has happened have involved “hate speech” or content bordering on libel that legal counsel has advised us to remove. It’s rare, and Scott agonizes over it every time.

          In general, I think it’s safe to say that as long as you’re clearly expressing your own opinion, and doing it in a way that doesn’t involve excessive language or personal attacks, it will get posted whether we agree with what you have to say or not.

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