Ownership Of Town Square Transferred to Group Holding Construction Loan

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Early Friday (Oct. 29th), it was announced that ownership of Burien’s Town Square condominium/retail development was transferred to Corus Construction Venture LLC, which acquired the construction loan for this project after lending bank failed last year.

In addition, original developer Urban Partners will be retained to manage the property.

As we’ve previously reported, 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 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.

Burien Town Square includes 124 condominiums and 19,700 feet of retail space. Only six of the condos have been sold, and none of the retail space has been leased.

Urban Partners' Paul Keller.

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.”

In a statement released Friday, Keller said:

“We are extremely proud of what we’ve accomplished with the city and the extraordinary building we have given the community; we want to continue to be involved in its success.”

Also from the same release:

“We feel a battle over the property or a contentious bankruptcy proceeding is not in the best, long-term interest of the project, its residents, the City of Burien or Urban Partner’s long-standing investment in the community,” said Matt Burton, Principal and Chief Financial Officer of Urban Partners, LLC.

Read our previous coverage of Town Square here.

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3 Responses to “Ownership Of Town Square Transferred to Group Holding Construction Loan”
  1. Coverofnight says:

    “…ownership of Burien’s Town Square development returned to its lender, Corus Construction Venture, LLC.” But I thought the lender was Corus Bank – and didn’t they fail?

    Wonder how much it went for (think it covered the 38.5 million construction loan), and if ST Residential lost money on the whole deal (aren’t taxpayers involved because the FDIC is part of ST Residential)? Wonder too, if any Chicago-style politics are involved.

    Hopefully, some investigative journalist with integrity will sift through this complex financing to present here on the Blog.

  2. Here’s the info you’re looking for regarding Corus.

    “The construction loan was issued in 2007 by Chicago-based Corus Bank, which was taken over by the Federal Deposit Insurance Corporation (FDIC) in September, 2009. In turn, the FDIC transferred the loan, as part of a portfolio of Corus originated loans, into an entity called Corus Construction Venture, LLC, which is owned 60 percent by the FDIC and 40 percent by a consortium of private equity concerns including Starwood Capital Group, TPG Capital, Perry Capital and WLR LeFrak.”

    No news yet on the terms of the deal.

  3. tripC says:

    We all can hope that this will help put this project back on track to continue the awesome transformation to the downtown Burien area, including the new library, and city hall. I personally can say, I stay in Burien, and enjoy the Downtown area a lot more today than I did five years ago.

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