BREAKING: Burien Town Square May Be Sold At Trustee’s Sale Friday
Burien Town Square’s only privately developed property – the nearly vacant condominium/retail complex built by Urban Partners, which opened in June 2009 – is now expected to be sold this Friday, Oct. 29th.
Urban Partners has been negotiating with ST Residential, which holds its construction loan, to retain ownership of the complex and for new repayment terms that reflect the current housing market.
In early October, Paul Keller, managing partner of Urban Partners, the private developer of Town Square, again said that an agreement, which would avoid a trustee’s sale, was under final review.
At that time, Keller still expected a settlement to be signed by all parties involved and the pending foreclosure action to be avoided.
But, Peter Marino, spokesman for ST Residential, informed The B-Town Blog on Oct. 27th,
“The Burien Town Square property is scheduled to be sold pursuant to a trustee’s sale on Friday.”
“We are working with Urban Partners and, in the event an ST Residential affiliate is the successful bidder at the foreclosure sale, we expect to retain Urban Partners to manage the property to ensure a smooth ownership transition for the project and the existing unit-owners.
“ST Residential will provide further comment after the foreclosure sale,” Marino added.
The B-Town Blog is attempting to reach Keller for comment.
Urban Partners financed construction of the six-story Town Square complex with a $38.5 million construction loan from Corus Bank of Chicago.
But the bank, a major construction lender, was closed and its assets seized by the Federal Deposit Insurance Corporation (FDIC) on Sept. 11, 2009 – just three months after the building opened.
The nation’s housing market collapsed about a year before Corus Bank failed and only eight months before the complex opened at the same time as the new Burien Library/City Hall building and Town Square Park.
ST Residential – an investment group formed by the FDIC, which retained a 60 percent interest in the Corus construction-loan portfolio, Starwood Capital Group and four other private investors – acquired Urban Partners’ Town Square project loan.
With negotiations between Urban Partners and ST Residential – initiated shortly after the failure of Corus Bank – moving slowly, a legal notice of foreclosure was filed on July 26.
If Urban Partners did not make a past-due payment of $3.5 million by Sept. 1, according to that notice, the Town Square complex would go into foreclosure.
Urban Partners still owes approximately $34.8 million on its loan from Corus Bank. Foreclosure will affect the 118 unoccupied condos that have not been sold, as well as ground-floor retail space and parking.
Six condos sold last year will not be impacted.
In an August interview, Keller told the B-Town Blog that “Urban Partners anticipates [a settlement] will happen.
“Very simply put, Urban Partners anticipates its continuing participation in this project through the sale of condominiums and the leasing of ground-floor retail space.”
The B-Town Blog will update this story as it unfolds.
Read our previous coverage of Town Square here.