City intends to preserve Park Pointe regardless of ownership
March 2, 2010
By Warren Kagarise
The developer behind the stalled Park Pointe project and a Seattle bank cancelled a hearing in bankruptcy court last week, as the case appears to near a coda.
Although the developer, Wellington Park Pointe LLC, indicated plans in court documents to develop the land, city officials reiterated a commitment to work with whoever owns the property to keep Park Pointe undeveloped.
Attorneys for the developer and Regal Financial Bank will meet in court March 9 to discuss the proposed settlement. Attorneys cancelled a court hearing for the case scheduled for Feb. 23.
Neal Wolf, a Chicago attorney representing the developer, declined to confirm or deny whether the bank will receive the land as part of the proposed settlement.
The attorney declined to answer further questions about the case, and added, “it would be ethically improper to discuss pending litigation.”
A Regal Financial Bank vice president could not be reached for comment.
Meanwhile, Issaquah officials continue to proceed toward a development-rights swap to keep the land near Issaquah High School undeveloped.
“It may be clearer who owns the property and controls it in the next month or so,” city Major Development Review Team Manager Keith Niven said.
Park Pointe has faced problems almost since the project was proposed in the mid-1990s — everything from concerns about traffic, landslides and altered vistas to a zoning switch at the development site. The latest plans presented by the developer show Park Pointe with 251 units or 344 units on lower Tiger Mountain.
Regardless of the outcome in a Seattle courtroom, the city and Issaquah Highlands developer Port Blakely Communities will pursue a transfer of the development rights, known as a TDR, officials said.
The swap between Park Pointe and the highlands should keep the Tiger Mountain land undeveloped. In turn, the agreement allows for additional residences to be built in the highlands.
Port Blakely Senior Vice President Judd Kirk expects the city, the highlands developer and the eventual owner of the Park Pointe land to complete the development rights transfer by the end of the year.
“There’s no agreement yet, but I’m optimistic that we’ll reach one,” he said.
The swap requires the county to extend the urban growth boundary to allow development. King County planners included a redrawn boundary in amendments to a key growth document, and city officials expect the amendments to be adopted within the year. County planners discussed the amendment in Issaquah during a Jan. 28 meeting.
Park Pointe developers envisioned hundreds of homes on 67 forested acres on the west slope of Tiger Mountain, behind Issaquah High School.
The developer held $29 million in assets — with the Park Pointe property as the largest asset by far — but owed about $15 million when the company entered Chapter 11 bankruptcy, court documents state. A January appraisal valued the land at $18.9 million; the developer expects the property to appreciate to $21 million as the economy recovers and property values rise, court documents state.
The developer filed for Chapter 11 bankruptcy protection in November, just before the Tiger Mountain land eyed for Park Pointe headed to a foreclosure auction. The company failed to make loan payments of almost $12 million, and defaulted on the loan last June.
During a December court appearance, company Vice President Ron Slater said work could begin on Park Pointe as early as a year after the developer emerged from bankruptcy proceedings. City planners, however, called the timeline unrealistic, and noted the months needed to navigate the development agreement and permitting processes.
Attorneys for the bank subpoenaed city Planning Director Mark Hinthorne in mid-January for the Feb. 23 court hearing. Hinthorne said he had not heard from attorneys since then.
The developer prepared and submitted a plan to build the Park Pointe neighborhood as part of the Chapter 11 reorganization, court documents state.
Warren Kagarise: 392-6434, ext. 234, or email@example.com. Comment at www.issaquahpress.com.