Developer defaults on $11.5 million loan

June 16, 2009

By Warren Kagarise

By Warren Kagarise
Wellington Park Pointe LLC — developer of the planned Park Pointe community — has failed to make payments on a loan and defaulted on nearly $11.6 million. A default notice issued June 11 said Wellington did not meet payment deadlines for the loan.
Wellington executives have 30 days to respond to the notice from the lender. If developers are unable to reach an agreement with Regal Financial Bank, the land could be sold at public auction in as few as 120 days.
Park Pointe developers proposed building hundreds of homes on 67 acres of Tiger Mountain near Issaquah High School. But development has been slowed for years by changes to the project design, as well as protests about the impact Park Pointe would have on traffic and the environment.
Mayor Ava Frisinger said it would be inappropriate and possibly counterproductive for city officials to discuss the default notice. Frisinger said Wellington could reach an agreement with the lender before the deadline.
“Lenders and borrowers oftentimes resolve their differences well before default sales,” she said.
Meanwhile, environmental consultants and city planners are in the midst of the final environmental impact statement on the Park Pointe proposal. The statement is required before developers can apply for city permits.
City Environmental Planner Peter Rosen said city staffers were informed about the default notice a few days after the document was issued. He said consultants and planners have continued to work on the environmental impact statement.
Wellington paid about $125,000 to hire consultants to prepare the statement, Rosen said. Part of the process requires consultants to answer questions posed by residents in the draft environmental impact statement, released in January. Planners expected the final statement to be ready by August.
Rosen said Wellington could halt the final statement, but the move would be unusual. He said developers would be at a disadvantage if they intended to revive the project in the future. Time-sensitive portions of the statement — such as traffic studies — would have to be redone.
Wellington Vice President Ron Slater could not be reached for comment.
Rosen said much of the input submitted to the city came from people opposed to the construction of Park Pointe. Since the project was proposed in the mid-1990s, opponents have said Park Pointe could damage the environment, lead to more vehicles on city roads and spoil views of Tiger Mountain.
Issaquah Alps Club Vice President Ken Konigsmark said he encouraged Park Pointe developers to preserve the land and instead pursue a development rights swap with another developer.
“I was constantly telling them to stop investing more money in architects, designers, feasibility studies,” Konigsmark said.
Officials and developers considered a transfer of development rights with Issaquah Highlands developer Port Blakely Communities. If the swap were successful, additional homes would be built in the highlands instead of at the Park Pointe site.
Port Blakely would be allowed to build more densely in the highlands if the company bought the Park Pointe parcel from Wellington and then deeded the land — and an additional Port Blakely-held parcel — to the city. Then, city officials would preserve the land.
Frisinger said she remained hopeful a development rights swap would allow the Park Pointe land to be preserved.
Konigsmark said he hoped land conservancy groups would consider buying the Park Pointe land if a public auction took place. He said other developers could be attracted to the site because of the zoning.
The proposed development is within the city’s Urban Growth Boundary and the land is zoned for residential units.
Wellington considered two development options for the site: 251 residential units — 121 single-family attached units and 130 multifamily units built on 14 acres of the lower slope or 344 residential units — a mix of 59 single-family detached, 145 single-family attached and 140 multifamily units built on 32 acres on the lower tier of Tiger Mountain and atop the slope.
The developer hoped to connect Park Pointe to the defunct Southeast Bypass, a proposed roadway that would have been built across the lower slopes of Tiger Mountain between Interstate 90 and Issaquah-Hobart Road. City Council members ended plans for the bypass last year. Developers instead proposed connecting Park Pointe to the city street grid via Southeast Evans Street.
Konigsmark said developers were too ambitious with plans for Park Pointe. He said Wellington should have focused instead on a transfer of development rights with Port Blakely.
“You got what you deserved,” Konigsmark said.
Reach Reporter Warren Kagarise at 392-6434, ext. 234, or wkagarise@isspress.com. Comment on this story at www.issaquahpress.com.

Tiger Mountain land could go to public auction

Wellington Park Pointe LLC — developer of the planned Park Pointe community — has failed to make payments on a loan and defaulted on nearly $11.6 million. A default notice issued June 11 said Wellington did not meet payment deadlines for the loan.Wellington executives have 30 days to respond to the notice from the lender. If developers are unable to reach an agreement with Regal Financial Bank, the land could be sold at public auction in as few as 120 days.

Park Pointe developers proposed building hundreds of homes on 67 acres of Tiger Mountain near Issaquah High School. But development has been slowed for years by changes to the project design, as well as protests about the impact Park Pointe would have on traffic and the environment.

Mayor Ava Frisinger said it would be inappropriate and possibly counterproductive for city officials to discuss the default notice. Frisinger said Wellington could reach an agreement with the lender before the deadline.

“Lenders and borrowers oftentimes resolve their differences well before default sales,” she said.

Meanwhile, environmental consultants and city planners are in the midst of the final environmental impact statement on the Park Pointe proposal. The statement is required before developers can apply for city permits.

City Environmental Planner Peter Rosen said city staffers were informed about the default notice a few days after the document was issued. He said consultants and planners have continued to work on the environmental impact statement.

Wellington paid about $125,000 to hire consultants to prepare the statement, Rosen said. Part of the process requires consultants to answer questions posed by residents in the draft environmental impact statement, released in January. Planners expected the final statement to be ready by August.

Rosen said Wellington could halt the final statement, but the move would be unusual. He said developers would be at a disadvantage if they intended to revive the project in the future. Time-sensitive portions of the statement — such as traffic studies — would have to be redone.

Wellington Vice President Ron Slater could not be reached for comment.

Rosen said much of the input submitted to the city came from people opposed to the construction of Park Pointe. Since the project was proposed in the mid-1990s, opponents have said Park Pointe could damage the environment, lead to more vehicles on city roads and spoil views of Tiger Mountain.

Issaquah Alps Club Vice President Ken Konigsmark said he encouraged Park Pointe developers to preserve the land and instead pursue a development rights swap with another developer.

“I was constantly telling them to stop investing more money in architects, designers, feasibility studies,” Konigsmark said.

Officials and developers considered a transfer of development rights with Issaquah Highlands developer Port Blakely Communities. If the swap were successful, additional homes would be built in the highlands instead of at the Park Pointe site.

Port Blakely would be allowed to build more densely in the highlands if the company bought the Park Pointe parcel from Wellington and then deeded the land — and an additional Port Blakely-held parcel — to the city. Then, city officials would preserve the land.

Frisinger said she remained hopeful a development rights swap would allow the Park Pointe land to be preserved.

Konigsmark said he hoped land conservancy groups would consider buying the Park Pointe land if a public auction took place. He said other developers could be attracted to the site because of the zoning.

The proposed development is within the city’s Urban Growth Boundary and the land is zoned for residential units.

Wellington considered two development options for the site: 251 residential units — 121 single-family attached units and 130 multifamily units built on 14 acres of the lower slope or 344 residential units — a mix of 59 single-family detached, 145 single-family attached and 140 multifamily units built on 32 acres on the lower tier of Tiger Mountain and atop the slope.

The developer hoped to connect Park Pointe to the defunct Southeast Bypass, a proposed roadway that would have been built across the lower slopes of Tiger Mountain between Interstate 90 and Issaquah-Hobart Road. City Council members ended plans for the bypass last year. Developers instead proposed connecting Park Pointe to the city street grid via Southeast Evans Street.

Konigsmark said developers were too ambitious with plans for Park Pointe. He said Wellington should have focused instead on a transfer of development rights with Port Blakely.

“You got what you deserved,” Konigsmark said.

Reach Reporter Warren Kagarise at 392-6434, ext. 234, or wkagarise@isspress.com. Comment on this story at www.issaquahpress.com.

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Comments

One Response to “Developer defaults on $11.5 million loan”

  1. Steve on June 17th, 2009 10:24 am

    The progress toward preserving the Tiger Mtn site is thrilling, but I’m not sure it’s time to gloat as seen in Ken’s final remark. He’s absolutely correct, but it feels too early to be smug. I’ll believe it only when I see the site deeded to the city. Then, and only then, should the long-awaited celebrations begin.

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