Developer of stalled 1 Hotel sells out to partner Starwood
After an eight-year campaign to redevelop a half-block site at Second Avenue and Pine Street, Portland developer Paul Brenneke has sold...
Seattle Times business reporter
After an eight-year campaign to redevelop a half-block site at Second Avenue and Pine Street, Portland developer Paul Brenneke has sold his interest in the downtown Seattle property to Starwood Capital Group of Greenwich, Conn.
Starwood and Brenneke's Avalon Holdings had been partners in the stalled 1 Hotel & Residences project on the site. Work on the 23-story luxury project stopped last September, leaving a deep, empty hole.
Starwood said in a short written statement Monday that it had "recently consolidated its ownership into a 100 percent interest in the development site." The statement suggested the project still is alive, and said Starwood is "now working on plans to ensure we have created a healthy and exciting total environment that will live up to the expectations we have for our brand."
Starwood representatives would not disclose the sale price or say whether the project will remain a hotel/condo hybrid. Brenneke did not return a call.
In February, he attributed the project's woes to the national credit crunch and said the plan was being redesigned to make it more appealing to potential lenders.
Brenneke acquired the property in 2000 and soon proposed a high-rise, hotel-condo project. In 2003 he sold the site to Seattle developers Stuart Sloan and Matt Griffin for $9.6 million, but five months later he exercised an option and bought it back for $10.3 million.
In 2005 he teamed with Starwood Capital.
In 2006 the partnership, called AvStar Seattle, unveiled the 1 project and said it would be the first in a global chain of environmentally friendly hotels with that name.
Brenneke said in September the project was on hold because it hadn't been able to find construction financing with favorable terms. He said the redesign would drop most of the individually owned condo-hotel suites, which were not selling well.
Staff reporter Elizabeth Rhodes contributed to this report.
Eric Pryne: 206-464-2231 or email@example.com
Copyright © 2008 The Seattle Times Company
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