City Extends Time For Urban Partners To Start Next Town Square Development


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by Ralph Nichols

Urban Partners will inform Burien by early next year about its plans for a “marketable” new development at the city’s Town Square.

Construction by Urban Partners of a second multi-use Town Square facility was to begin by mid-July – two years after the private developer’s condominium/retail complex was certified for occupancy.

Since then, however, the current recession has frozen the condo housing market – and due to circumstances beyond its control, Urban Partners no longer owns its first Town Square building.

ST Residential, which now owns the six-story building, has yet to sell a condo or lease ground-level retail space.

Urban Partners asked the city in June for an extension of time to break ground on its next Town Square project, Burien Economic Development Manager Dick Loman recently told The B-Town Blog.

After reviewing that request, the city asked Urban Partners “to provide information on what they think will be marketable,” Loman said.

“Urban Partners has agreed to supply this information to the city 45 days after the first sale closes at the Town Square condos, but no later than Jan. 21. Urban Partners will key off ST Residential because that [sale] will be a local market indicator.”

Still owned by Urban Partners for anticipated development are the vacant Town Square parcels north of the condo/retail complex and the King County Library/Burien City Hall building, and a narrow property east of the post office between S. 150th and S. 151st streets.

ST Residential is still penciling out prices for the 118 unsold Town Square condos “that are fair to us and give value to the owners,” First Vice President David Ploger told Burien City Council members Aug. 15.

Those prices are expected to be “more than 35 percent below the original prices” when the seven-story complex opened over two years ago. The new prices may be approximately $120,000 to $420,000, compared to the original $200,000 to almost $700,000.

While ST Residential “looks forward” to its public launch of condo sales, “I can’t guarantee it will happen yet this year,” Ploger told the city council at that time. No mention was made of the building’s 20,000 square feet of vacant retail space.

Just six condos were sold by Urban Partners before sales were placed on hold when the Federal Deposit Insurance Corporation (FDIC) closed Corus Bank of Chicago in September 2009.

Corus Bank had financed construction of the building with a $38.5 million loan in 2007 to Urban Partners, the city’s partner as developer of the private components of the Town Square project.

But the nation’s housing market began to collapse a year later, eight months before the condo/retail complex opened along with the library/city hall building and Town Square Park.

After the FDIC seized the bank’s assets, including Urban Partners’ loan, ST Residential became holder of its residential construction loan portfolio.

ST Residential is comprised of the FDIC, which holds a 60 percent share of that portfolio, and Starwood Capital Group and four other private investors.

Urban Partners eventually transferred ownership of the condo/retail complex to ST Residential – avoiding a trustee’s sale of this property, which was in foreclosure. The FDIC earlier had rejected an offer by Urban Partners to buy back its construction loan.

“We fully expect that once [ST Residential] gets this thing off the ground, they’re going to sell many more units than just one,” Loman continued. “There is a lot of interest in them” and the first sale should result in a “domino effect.”

In the meantime, “the city is limited in what it can do” to assist Urban Partners in moving forward, he said. Burien’s role is “largely speculative at this point, but we’re anxious to do whatever we can.”

And if Urban Partners is still unable to present a phase two development plan by January, the city will probably re-negotiate with them.

Urban Partners “remains committed to our investment in Town Square with a ground up development” in the future, principal Paul Keller told The B-Town Blog earlier this year.

“As the economy continues to heal, we are optimistic that at some point in time we will be able to move forward” with the second phase of private development there.

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Comments

15 Responses to “City Extends Time For Urban Partners To Start Next Town Square Development”
  1. Really? says:

    Ralph, thank you for the nice work in providing the background info and putting the original development in context for this article. How about an article on “What’s life like for the original six condo buyers” ?

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  2. Wheels says:

    The town square condos are orange and ugly, and they’re only going to get uglier before they get torn down in thirty years or so. Urban Partners and the city of Burien were warned about the housing bubble by no less than Warren Buffet, many years before the collapse. Given that Urban Partners has shown such poor taste and bad judgement, why would we give them a second chance to ruin our city? Oh, right, because our city leaders have equally poor taste and bad judgement.

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  3. Eaton B. Verz says:

    I still say turn it into a jail!! Have public hangings in town square before each farmers market. The Mayor could stand in her corner office and give the thumbs up or thumbs down. Maybe charge admission to help the citizens with their high tax burden. Slow down crime and lower taxes! Win,Win….. Have Mike Martin run a beer garden????

    BTW Rob: I’m just joking……………………………………

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  4. my.02 says:

    I think they should fill the bottom with water and make it into giant dunk tank on one side and an aquarium on the other. Give the council members a place to cool off and place for people walking by something to see besides the rodents that have taken up residence inside.

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  5. Elizabeth says:

    Have any of those that have commented here actually been inside the building? It is beautiful and has been very well maintained during this uncertain period.

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    • opinionated says:

      Well maintained?? It`s never been occupied so there has never been much to “maintain” and nobody said it wasn`t nice inside, just throwing around dumb ideas of what to do with it. Most of these comments aren`t meant to be taken to heart.*lol*

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      • Elizabeth says:

        Some of the original courtyard landscape did not survive the first winters and has been replaced. I’ve also noticed how cleaned the building is maintained. Regular safety checks on elevators, fire alarms, etc. have been done. The staff have been very responsive to minor issues like doors sticking, etc. I realize most of these comments are not serious, but I do think the building will bring in retirees and others who want to stay in the area. It is a quality building

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        • Burienboy says:

          I don`t think most retirees who live in Burien could afford them. Isn`t that kind of the reason they are vacant now? Overpriced?

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        • Eaton B. Verz says:

          Sounds like Elizabeth is one of the original six! Looking for that silver lining. They should gold plate the doors for the money they originally asked. That’s a good idea tho….turn it into low income senior housing……..

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  6. Rob says:

    Of course the bigger concern is the lack of tenants in the retail space… Scott, is there any mention ever of the cost of the retail space? Is it over priced like the condos?

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  7. Shari says:

    I know I’m going to get called an ignorant idiot for asking this (including by my husband, who’s been a construction manager for 30 years…okay, he won’t say ‘ignorant’ or ‘idiot’ but he will probably sigh and patiently explain why this isn’t feasible) but I’ll just ask it anyway…is there any financially-viable way to convert any of the existing retail space into office space? I know of some people who have sincerely wanted to relocate their offices to Burien and the Town Square area was really appealing, but there just weren’t any office spaces in town that were large enough, in the right physical condition and with the kind of parking and property management they needed. So they located elsewhere. Probably not cost-effective or structurally possible, but just asking.

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    • Chris says:

      Well, all the retails space is roughed-in and essentially in a “T.I.” (Tenant Improved) state. I suppose an office could move in there, if the leasing allows for it. As long as the tenant and the owners agree to a leasing price, I don’t see what the big deal would be. I mean after all, the proposed tenant would have to do “T.I.” to their liking and finish-out the occupancy.

      Again, don’t see why someone couldn’t put an office space in there.

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    • TcB says:

      The spaces around back that are “live in studio shops” might be good for that but I would hope not to see it around front where you’d want boutique shops.

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  8. Really?!? says:

    Shari, your comments are not at all ignorant. Try to think of your proposed spaces as building density. Once a certain level of density is reached, for example certain areas of Seattle, there would be enough people living in the area to maintain the varied types of businesses a city needs to be healthy. The problem with to many offices in the middle of a town is that they tend to become empty canyons in the off business hours, which again, doesn’t help build the varied business base that’s required for a vibrant 24/7 occupancy core.

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