‘Luxury’ developer explores mixed-use project for 23rd and Union’s Midtown Center 

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(Image: Kidder Mathews)

Screen Shot 2016-05-31 at 3.03.27 PMA developer of “luxury communities” around the U.S. is exploring a plan to build a mixed-use project at one of the most prized re-development properties in Central Seattle.

Lennar Multifamily Communities, a California-based subsidiary of the Fortune 500 company Lennar, has filed a preliminary site plan for Midtown Center that includes two construction sites on the 106,000-square-foot property once home a U.S. Post Office at 23rd and Union. Aside from noting residential and commercial uses, the paperwork offers little insight into Lennar’s development ideas.

So far the plan is just a preliminary study, according to a representative from Encore Architects, the firm working with Lennar on the project. There was no official record of a sale for Midtown as of Tuesday. A $23.5 million deal with another California-based developer, Legacy Partners, fell through earlier this year as the longtime family owners of the property continue their legal wrangling over the future of the site at the heart of the Central District.

23rd and Union would be the latest in a series of big plays for Lennar in Seattle since 2013, when the company entered a bidding war to poach a manager from another national developer to lead its push into the northwest. Brad Reisinger, who is leading the Midtown plans for Lennar, did not respond to a request for comment on Tuesday.

Prior to its 23rd and Union acquisition, Lennar had its sight set on another neighborhood-defining project when it submitted a proposal to develop the Capitol Hill Station “transit oriented development” sites on Broadway. Lennar is in the early stages of developing a mixed-use project at 22nd and E Madison. Meanwhile, construction is underway at Lennar’s 389-unit West Seattle project, The Whittaker, which will include a Whole Foods on the ground floor.

In 2015 Lennar Multifamily created a $1.1 billion equity fund to power multifamily projects “and then holding those communities in a portfolio long term for cash flow.”

The Midtown sale was put in motion last year after Tom Bangasser’s siblings voted to remove him as controlling member of Midtown Limited Partnership, which has owned the property for generations. He told CHS his siblings had grown impatient with his vision to transfer ownership of the property to a land trust that would come under community control. With Bangasser demoted, the siblings contracted realtors Kidder Matthews, which rolled out a slick website to help sell the property.

Bangasser responded by filing a lawsuit against his family to challenge his ouster and receive compensation for his for his decades of managing the property. In January, a King County Superior Court judge partially sided with the partnership, agreeing that Bangasser had been lawfully removed as a general partner and that another member of the partnership would now lead the group with the authority to sell. The judge recently ordered Bangasser to pay nearly $16,000 in legal fees to his family.

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Last week, Bangasser filed an appeal of the decisions. In the meantime, he has taken steps to put Africatown activists at the table of a Midtown deal.

Bangasser tells CHS he recently sold part of his share in the Midtown partnership to the Africatown Center for Education & Innovation. According to Bangasser, his siblings still need to vote on the transaction to make it final, though it is unclear what power those shares will hold. Bangasser said the Africatown group also submitted a proposal to purchase the property from the family partnership.

“Africatown really wants to own the property,” Bangasser said. “This is a property that really ought to remain in the community.”

The first Midtown property parcels were purchased by the Bangassers’ father 75 years ago and Tom Bangasser has been managing it for decades.

The redevelopment of the block has been a flashpoint for community anxiety regarding gentrification in the Central District, Seattle’s historically African American neighborhood. The Midtown Center is and has been called home by a number of minority owned businesses, such as Earl’s Cuts and Styles and Sam’s Moroccan Sandwich Shop, which closed late last year. Other businesses along 23rd Ave are feeling the pains of change with an ongoing road construction project, which may have claimed its first business casualty.

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(Image: 701 Coffee)

Nop Zay, the owner of First Cup Coffee, recently closed her drive-through coffee kiosk at Midtown Center citing the 23rd Ave upheaval. Despite the infusion of $25,000 from the city to help her struggling, business, Zay told the Globalist that sales reduced to a trickle as crews ripped up 23rd Ave to improve the street and install a new sewer line.

After saying for months there was no legal framework to offer small businesses direct assistance, Mayor Ed Murray relented by creating the 23rd Avenue Business Stabilization Fund. To qualify for assistance, businesses must have five or fewer employees and demonstrate the project has negatively impacted the business.

The $43 million construction project is expected to finish next year.

The area around 23rd and Union continues to be busy with development. One six-story building is now complete on the southwest corner and another just wrapping up design review on the northwest corner. Both are projects from private developer Lake Union Partners and both are being put together as market-rate developments.

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22 thoughts on “‘Luxury’ developer explores mixed-use project for 23rd and Union’s Midtown Center 

  1. The community needs to engage early and often with this developer in order to ensure a good outcome for this property. There is an opportunity to do good things here, but it’s going to take a lot of hard work by a lot of people to make it happen.

    For what it’s worth, last year, I did my architecture masters thesis on the potential development scenarios for this block. You can see what I came up with here:

    https://digital.lib.washington.edu/researchworks/handle/1773/33444

    • I agree with you Jonathan. These guys are not local, and they have more of an institutional mindset when it comes to development. This is not to say they won’t do a good job but the community needs to stay involved, make sure their voices are heard by weighing in on Design Review if we want to keep the CD cool.

    • The developer might be local but the money could come from anywhere. I wonder how much could be traced to “Chinese blood money” or “narco dollars?”

  2. Homeowners around that neck of the Central District are going to make bank in the coming years with all this development going on. Good for them. It’s not going to be pretty for the low income people in the CD in the coming years.

    • Homeowners only benefit if they are selling. Increase in property value = increase in property taxes = a higher price to stay in a home. Mortgages may be locked in but taxes and insurance fluctuate. I do agree though that it’s getting more and more difficult to find affordable rental units in this area.

  3. I don’t know if it makes a difference in reporting, but the market rate buildings that have gone up around 23rd & Union are also participants of the MFTE program, just FYI.

  4. @Neighbor. Houses in this part of Seattle (Capitol Hill and CD)are up 25% over the past 12 months. I think the increase in property taxes wont deter homes from going up it if this continues which I think it will for the foreseeable future based on these kinds of mixed use developments going up. Renting is what doesn’t make sense since increases are not capped. Unfortunately I know there are still folks who can only afford to barely make rent in this town so it’s going to be tough for anyone without a white collar job to live within 30 minutes of Seattle soon.

    • I know nobody will feel sorry for us, but it will be tough for those of us who were lucky enough to live here for a long time, to retire here. I’m not crying too hard, since it’s not like I’m going to starve. I really didn’t plan to have to move upon retiring, but with property taxes shooting up like they have been, many of us getting-up-there ones will not have any choice. Who wants to live some sun-baked desert or a hayseed town in the boonies? Yeah, I know, “cry me a river”. But it’s not just lower income people being displaced, it’s seniors too.

    • Bob, that assumes people own their homes outright. I will be far in to my 70’s before my mortgage is paid off if I stay healthy and can continue to work. My wage is stagnant other than the hard fought for COLA every few years so I’ll probably be taxed out of my home long before I can attempt to age in it.

  5. I can’t wait!

    No more parties, no more car stereo wars, no more gambling, no more shoot outs, no more prostitution and drug dealing, no more syringes on the sidewalk, no more serviceless homeless encampment whose occupants have been witnessed defecating in neighbors yards? I live directly across the street and will gladly welcome the six stories that will block my view of the sunset in exchange for ridding the neighborhood of such a blight.

    Bring it!

  6. Don’t we have property tax exemptions for seniors? IMO, seniors should use the tools we have in place and the rest of us should ensure homeowners aren’t being levy’d to death to finance the whims of city.

    I know a few seniors in Seattle who’ve cashed out and done very well. Instead of moving out of the city. They sold their home and bought a condo nearby for half the price of the home they sold netting a very healthy nest egg to enjoy retirement in their same neighborhood without the hassle of single family home ownership. I’d do the same.

    I think this project is fantastic.

  7. I didn’t even think about the impact on seniors who want to stay in their homes. That kind of sucks. I believe with every $100 grand your house goes up in value you are looking at an increase of $1,000 in property taxes. That seems pretty fair considering how much the homeowner is benefiting on paper at least. This is a very complex issue unfortunately.

    • Juju, You’re referring to the 1% increase, but add on to that the levys and it goes far above that I believe.

  8. I doubt that many seniors who are able to survive anywhere in Seattle qualify for the property tax breaks for seniors.

    • This is true. Anyone who can afford to live in Seattle at all probably has income too high to qualify for those very modest benefits. The only real hope is either a property tax freeze, where taxes don’t adjust up till the house sells (which creates another whole set of screwed-up problems, like it did in CA); or an income tax. And WA voters have said several times they have no appetite for an income tax.

    • I believe the income ceiling for the senior property tax discount (not a full exemption) is something like $35,000/year. A retired senior who lives a modest lifestyle can get by comfortably on that income, especially with a significant property tax deduction.

      Also, what about the possibility of taking out a “reverse mortgage” on your home? This would provide income and make it unnecessary to move elsewhere.