A year of financial limbo for the Burien Town Square condos will be broken on Friday, when the unsold Burien Town Square units and condos are foreclosed on and S.T. Residential sells them in a trustee’s sale.
“The Burien Town Square property is scheduled to be sold pursuant to a trustee’s sale on Friday, October 29,” S.T. Residential spokesman Pete Marino said on Thursday.
As late as last Saturday, Oct. 23, Amy Hoffman, a development associate with Urban Partners, said it would come down to the wire, but they were confident they would successfully negotiate new terms on the construction loan for Burien Town Square before the foreclosure deadline.
Urban Partners was the developer of the Burien Town Square project.
As of press time Amy Hoffman and Urban Partners Principal Paul Keller were unavailable for comment.
Six out of the 124-condo units sold before Corus Bank, who issued Urban Partners the construction loan, failed last year.
The construction loan was then taken over by S.T. Residential, which is the managing member of a partnership between the FDIC and several private equity investors.
Since Corus Bank failed, Urban Partners had been trying renegotiate the loan so they could sell the condos and retail spaces at the new, lower market value. Keller has said none of the units could be sold until the loan was renegotiated.
Burien Economic Development Director Dick Loman has said the value on the condos has gone down about 30 percent since Burien Town Square opened in the summer of 2008.
Earlier this year S.T. Residential began foreclosure proceedings on the unsold units in Burien Town Square. In an earlier interview Keller described this as a negotiating tool, saying S.T. Residential was doing what they had to do. But he said he was always confident an agreement would be made.
The foreclosure documents gave Urban Partners until September 1 to come up with $3.5 million. After that the only way to avoid foreclosure before the Oct. 29 deadline was to either pay off the remainder of the construction loan, or negotiate the terms of the loan.
Urban Partners still owes $34.8 million on the construction loan.
In August, Loman said the foreclosure proceedings meant one way or another the paralysis on the property was going to be broken one way or another. Whoever buys the property in the trustee’s sale is not going to let the units sit.
Marino said, “We are working with Urban Partners and, in the event an ST Residential affiliate is the successful bidder at the foreclosure sale, we expect to retain Urban Partners to manage the property to ensure a smooth ownership transition for the project and the existing unit-owners.”