2011 ended with small signs of hope for a key redevelopment project looming in the middle of Pike/Pine. 2012 starts with a sign of financial uncertainty for the neighborhood. According to court records, developer Pryde Johnson faces foreclosure after borrowing $8 million in 2006 to acquire and develop the old BMW complex that covers some 50,000 square feet between Pike and Pine.
The Daily Journal of Commerce first reported on the proceedings on Friday and calculated that the developer now owes more than $9.8 million in principal and interest to lender MMA Realty Capital Limited Liability Co. The DJC also reports that there will be a courthouse sale this spring if Pryde Johnson does not repay the loan.
Most of the article is behind a paywall but, in summary, we can tell you that the DJC, like us, was unable to reach any of the principals involved in the dispute. We’ve reviewed the court records and have details below.
In its filing, MMA claims Pryde + Johnson has defaulted on the loan and involved the property in unapproved liens.
It asks the court to approve the appointment of a receiver to manage the property and take it out of Pryde Johnson’s hands until the foreclosure sale — or the $9.8 million is paid off.
It’s not clear how the timing of last fall’s Department of Planning and Development filing for a 300-unit project on the property fits with the January foreclosure action.
Pryde Johnson’s holdings of about 50,000 square feet of land in the block forms a lowercase-t shaped collection of seven parcels. At least three of those are currently parking lots. In addition to the BMW building, the building currently home to Pho Le’s would also be part of the planned development.
A spokesperson for the Washington State Department of Ecology told CHS in 2009 that the contaminated material from the building’s automobile industry past has been contained but not removed from the site and that the land is subject to ongoing reviews to check for any change in condition. The property is also subject to a covenant that requires the department to be notified in the event of any transfer or development plans.
BMW left Pike/Pine in 2009 to move to a new, much larger facility in SoDo. Since, the building has been kept mostly active. Soccer-focused energy drink maker Golazo moved its headquarters into the old showroom in 2010 and other parts of the complex have recently been available for lease.
Pryde Johnson has also been working to secure financing to redevelop the old warehouse building at 11th and Pine. The Sun Electric project will include 95 residential units above the rebuilt auto row building with two-floor tall commercial spaces at ground level. The project’s architect told CHS in October 2011 that the project was still a go despite a longer-than-expected wait for the start of construction. Unlike the BMW project, most of the Sun Electric paperwork is complete and fees, paid. The construction permit is valid through spring 2014.
Meanwhile, it’s been a busy start of the year for Pike/Pine real estate. On Friday, we reported that the Winston building had sold for $4.3 million.
Anyne know? Are they little rooms?
Nevermind that it now owes $9+million. I’ll bet it go to auction and sell for under $5million and probably closer to $4million.
That’s like 150 cars or so.
I think they’re called “turrets”.
For sharpshooters watchin the yard?
They’re just skylights. It’s all open space inside, so it’s not like you could stand and look out one of those windows.
Since lots in this neighborhood go for $1-2 million each and this has 7 that are all contiguous, why would it go for less?
I believe those are actually called roof monitors.
For starters and off the very top of my head, when buying in bulk, major discounts usually apply.
7 blighted, abandoned, graffittied properties valued at $1million/each will sell for substantially less than $7 million if they’re all sold in one transaction.
Secondly, the current owner(s) owes more than their (over)value and hasn’t been able to even service the interest much less principal. When that happens with commercial RE, it’s usually a huge wind of common sense that someone paid **WAY** too much for a property. So, they’re basically an abandoned, foreclosure in a down market. Those are just a few reasons that my gut and brain tell me this isn’t worth $8MM. It might sell for that and it might one day be worth that much but it’ll take a lot of repair and an economic turnaround for me to be a believer.
And it’s 29 stories tall with over 300,000 square feet.
http://en.wikipedia.org/wiki/Sterick_Building