Urban Partners’ Paul Keller Explains Financial Woes To City Council

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by Ralph Nichols

Burien City Council members were told in a cautiously optimistic “bottom-line” update Monday night (May 24) that residential units in the mostly vacant, six-story Town Square condominium/retail complex could be selling later this year.

“This city and community will see the project sold out sometime in the future,” said Paul Keller (pictured, left), managing partner of Urban Partners, Burien’s private developer for the Town Square project. “I don’t think it will be years. I think it will be months.”

Keller also announced that, in June, Urban Partners and Galaxy Theaters will present the council “with a proposal to move forward with a theater project.” The idea of building a cinema in Town Square was initially discussed with lawmakers last November (read our previous coverage here).

This development, if built, would include a 10-screen multiplex cinema, with an additional stage for community theater and dance, on the Town Square parcel at SW 150th St. and 4th Ave. SW where the old city hall building is located.

“Working in this economy has been very, very challenging,” Keller said. “And then when we lose the construction lender – that was frustrating.” Nevertheless, “Urban is absolutely committed to this project.”

Burien's old city hall building at SW 150th and 4th SW could be the home of a new Galaxy Cinema complex.

Corus Bank of Chicago, through which Urban Partners obtained the construction loan to build the phase one complex in Town Square, 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 the FDIC and Starwood Capital Group – S.T. Residential.

“The FDIC entity does not lend itself to any quick resolution,” Keller noted. “I have spent countless, countless hours in meetings in New York, in Chicago, in San Francisco, in Seattle trying to move that process forward.”

“We have people waiting to close escrow and move into the building, but they’re stymied.” While Urban Partners waits on the FDIC process, the investment group continues to actively manage the condo/retail building.

“We have made four separate proposals to the FDIC to maintain our involvement with phase one,” Keller continued. But “since the federal takeover of Corus, we are not in control of the timing or the outcome of events.”

He said as recently as Monday afternoon, he was involved in an exchange of ideas that could help bring the parties to an agreement in the next 30 to 45 days “on our continuing involvement in phase one.”

But, Keller cautioned, although he remains hopeful, there is no certainty at this time that a resolution will emerge from the current discussions. Even so, “I don’t anticipate that an impasse will develop.”

A factor that could help Urban Partners is that their construction loan is the only one of the 135 large commercial assets – ranging in value from more than $50 million to around $225 million – in the portfolio held by S.T. Residential for a property located in Washington state.

The $52 million, phase one condo/retail complex in Town Square, with 142 residential units and 20,000 square feet of ground floor commercial space, “was completed on time and on budget,” Keller stated.

This city and community will see the project sold out sometime in the future,

But phase two – construction of more condos in a separate complex just north of the existing building, which opened last June – “is on hold given the collapse of the housing market.”

Development of a cinema in the meantime would “increase business downtown and benefit existing businesses,” he predicted.

“Urban Partners is so proud to be part of Town Square,” Keller told the council. “This development and our investments remain a very high priority … despite the severe economy.”


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6 Responses to “Urban Partners’ Paul Keller Explains Financial Woes To City Council”
  1. Ian Gunsul says:

    Before they move ahead with more construction in Town Square they need to get tenants into the existing vacant retail space.
    Why is it we need a 10 screen complex when there are several minutes away on the freeway?
    West Seattle, Des Moines and Ballard get by with two screens or less.
    Is anyone paying attention to Hollywood’s recent overtures to start direct releasing to home pay per view of first run movies on the same day they are released to theatres?
    And Galaxy doesn’t have the greatest track record in theatre management.
    This idea needs to be studied thoroughly before moving forward. I believe a four screen complex would be more than enough to service the area and easier to convert to another use if it fails.

  2. Mindy Maxwell says:

    I agree that a 10-screen movie theater would need to be studied further. I am not clear that this area can support a 10-screen theater given the 2 movie theaters in SouthCenter and the Tin Theater opening soon.

  3. Seriously says:

    I would way rather see something like this http://goldclasscinemas.com/Theaters/Redmond-Washington.htm then a 10 screen megaplex. 2 or 3 screens max. And it would be nice to have something local. I took my 9 year old and a friend to see Shrek @ Southcenter, on Saturday, during the day and had to listen to some hommies with a profanity laced conversation follow us out into the parking lot. I would have told them to stuff it but fear of being shot held me back.

    • cautious says:

      I would warn you against thinking that you can’t find your “hommies” with the profanity laced conversation in Burien. They’re here, they may just not be inside Goody-Gumdrops.

      Also, rather than a multiplex, it would be nice to see something along the lines of a destination theater, like the Cinerama or the IMAX quality screen. Nobody will come to Burien for a regular theater when there are three right in Southcenter.

  4. Coverofnight says:

    10 screens does seem a bit much, but maybe having a lot of movie selections is required to keep bodies in the facility to generate revenue. While there is talk of direct release of movies to home viewers, there is something to be said for the experience of going out to a theatre and seeing/hearing a movie on better screens and equipment. That’s why I enjoy getting out to the theatre – I’m hoping they’ll at least use Fandango, as the Southcenter theatres don’t and it’s a pain and a waste of gasoline to go down to purchase tickets! Let’s also hope that they keep the “hommies” (as Seriously noted above) out of the area; we don’t need that crap here! I also wonder if having a stage for theatre and dance would cause a hardship on the PAC next to Highline High School…..would hate to see that facility falter. Finally, it’s interesting that Keller made the comment, “We have made four separate proposals to the FDIC to maintain our involvement with phase one,…”. I wonder if Urban Partners is trying to be squeezed out of Phase 1 – they’re probably fighting like crazy to stay in so they won’t have to take pennies on their investment dollars. Good luck with that as the initial bank (from Chicago) was taken over by the Feds…..ever heard of the phrase, “The fix is in”? Keep repeating that with all things associated with this Administration and this economy.

  5. TcB says:

    I’ve said from the beginning. 4 Screens is perfect. Should be like the one in Ballard. 152nd was reconstructed as a small town village road. You can’t have big box retail on it anymore. Business must stay more on the Boutique side. That’s where Burien needs to aim because Southcenter has all the big box stuff. Burien could be a destination for Boutique, if it’s kept that way.

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