Key downtown Burien real-estate project faces foreclosure
Burien Town Square Condominium, a troubled condo and retail project heralded as a catalyst for reviving the city's downtown, now faces foreclosure.
Seattle Times business reporter
A troubled condo and retail project heralded as a catalyst for reviving downtown Burien now faces foreclosure.
The firm that holds the note on the construction loan for Burien Town Square Condominium filed a legal notice late last month that it intends to foreclose on the property Oct. 29 unless developer Urban Partners comes up with $3.5 million by Sept. 1 to cover missed monthly payments and related charges.
The notice covers 118 of the project's 124 condos — just six have sold since the building was completed 14 months ago — and the ground-floor retail space, all of it still unleased.
Los Angeles-based Urban Partners acknowledged in June that it had defaulted last fall on the $38.5 million loan.
Talks to restructure the loan continue, a spokesman for Corus Construction Venture, which now holds that note, said Thursday.
Dick Loman, Burien's economic-development director, said Urban Partners officials told city officials several days ago they were "making some good progress" in negotiations.
The foreclosure notice may put more pressure on Urban Partners to make a deal soon, Loman added.
"We're on pins and needles," he said. "It's such a big part of our downtown redevelopment, and it's been on hold since October."
The seven-story Burien Town Square project is a key component of a decadelong effort by Burien city officials to give the postwar suburb of 32,000 a real city center. The city acquired 10 underdeveloped acres, keeping some for a new city hall, county library branch and park that all opened last year.
City officials set aside the remainder of the property for sale to private developers for residential and commercial development. Urban Partners' project was to be the first phase.
The developer obtained the construction loan in 2007 from Corus Bank of Chicago, which later failed. The condos were completed in June 2009.
Urban Partners principal Paul Keller said in June that sales at Burien Town Square were effectively on hold until the loan could be restructured. His firm wanted to cut prices, he said, but the existing loan agreement, now three years old, precluded it.
Condo prices at Burien Town Square ranged from the mid-$200,000s to the mid-$600,000s when the project opened.
Urban Partners still owes more than $34.8 million in principal on the $38.5 million construction loan, according to the foreclosure notice. The loan matures Sept. 1, the notice says, and after that date foreclosure can be avoided only by paying off the entire balance, plus interest.
Eric Pryne: 206-464-2231 or email@example.com