The first deadline for Urban Partners to come up with $3.5 million or face foreclosure on the Burien Town Square project has come and gone with no changes.

The only way for Urban Partners to avoid foreclosure on the project now is to repay the entire amount of the loan before Oct. 29, or finish negotiating the loan with S.T. Residential, which Keller still anticipates they will do.

Paul Keller, a principal with Urban Partners, who developed Burien Town Square, called the foreclosure notice a negotiating tool. Keller described it as just doing what they (S.T. Residential) had to do. Urban Partners still owes $38.4 million on the Burien Town Square construction loan.

Chicago based Corus Bank held the construction loan on Burien Town Square, until they failed last year. The FDIC sold off the assets of the failed bank. Since Corus Bank failed, Urban Partners has been working to renegotiate the loan with the new loan holder S.T. Residential.

Keller has said until the loan is renegotiated they cannot sell or lease any of the spaces in Burien Town Square. Urban Partners is working to renegotiate the loan so they can market the retail spaces and condominiums at the current, lower market value.

Burien Economic Director Dick Loman said the value on the spaces in the Burien Town Square have dropped about 30 percent.

Keller said he has been hoping since June that a deal was close.
Last week, he said Urban Partners is continuing to work with S.T. Residential and he believes a deal will ultimately come to fruition.

"I really believed this would have been behind us by the end of September. I am afraid it is going to go into October, but I am still optimistic."

The foreclosure notice covers 118 of 124 condominiums in the project. Six condominiums were sold before Corus Bank failed.

According to the foreclosure documents the only way to stop foreclosure after September 1st would be to pay back the loan in full before Oct. 29. The $3.5 million and the foreclosure notice are all included in the negotiations, the details of which will not be released until an agreement is approved.

The remaining undeveloped property owned by Urban Partners has been up for sale for the last several months.