By Patrick Robinson

In the most recent set of minutes, dated July 27, from the West Seattle Trusteed Partners Executive Committee a picture emerges of 'wait and see' on the future of the land now comprising the largest parking lots in the West Seattle Junction, though offers are being actively weighed.

Previously an offer of $14,490,000 was made by Community Roots to purchase the land, as part of the City of Seattle’s efforts to develop affordable housing. That offer was seen by the board as being too low since they believe it is worth closer to $19 million.  The assessment however took into account the fact that the West Seattle Junction Association holds a lease on the properties for the purpose of parking, which does not expire for another 17 years. Additionally, any sale of the actual land, as opposed to a sale of the WSTP organization, would have individual tax implications for each of the shareholders. 

Jeremy Wilkening, Vice President of Real Estate Development for Community Roots told the board that the organization would not able to buy the corporation, due to statutory reasons. It was unclear which statute he was citing.

In the minutes WSTP President Joe Erickson explained that if the land were in fact sold to Community Roots that while they “would be taking assignment of the JunctionLease, is not interested in paying for parking as its focus would be on affordable housing. City is not interested in providing money for parking area purchase so no guarantee long term to preserve parking.

Joe outlined possibility of looking at selling one of the lots but looking at other prospects for other lots to ensure that parking is preserved and for obtaining better return in development.”

However board member Leon Capelouto said that “Community Roots would honor the BIA lease and reminded the Board of the community interest in a Community Hospital development.”

WSTP Board member Dave Gowey said via the minutes, “that in evaluating a prospective offer with respect to Assessed Values that usually the assessed values lag behind the market values and noted the Community Roots offer as significantly less than the 2020 Assessed value.”

Majority stockholder and WSTP Vice President Charlie Conner owner of Conner Homes provided an update to the board saying he anticipates that WSTP will likely receive an offer in 3 weeks or so for the 42nd Ave property that would contemplate that WSTP would retain an interest in the parking and likely have equity in the ongoing project.

Perhaps makes sense to direct Affordable Housing component to 44th Ave property only.

Again according to the minutes of the meeting:

“Many Board members weighed in with need to evaluate whether it is in best interests of WSTP to pursue a Sale or Own as Income property or participate in some combination for the various lots.

Joe and Board members indicated willingness and support for Leon reaching out to Hospital or other prospects, it is worthwhile for the Board to look at various potential projects. Charlie reminded the Board that evaluating to be sure there is adequate parking will be an important factor to weigh for a potential project.

Leon observed that a Hospital project would likely get a lot of special treatment and that banks would readily finance the same. He also indicated a look at an Animal Hospital would be worthwhile.

Dave pointed out that all of these ideas relate and impact the potential value of the property.”

MINUTES OF BOARD MEETING

WEST SEATTLE TRUSTEED PROPERTIES INC.

JULY 22,2021 AT 9:30 AM via Zoom

Attending virtually by Zoom Conference:

Leon Capelouto

Mark Swanson

Joe Erickson

Tyler Johnson

Charlie Conner

Dave Gowey

JeffVann

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The Board met via Zoom conference. Joe convened the meeting at 9:35 am via ZOOM Conference on July 22nd, 2021.

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Approval of June 3rd, 2021, Board Meeting Minutes: The proposed Minutes from the June 3rd Board meeting were recirculated to Board members on July 16th by email. After some further review, Dave Gowey moved to approve minutes. Charlie seconded. The Minutes were unanimously approved.

Overview of Meeting- Topics to be discussed: Joe invited topics to be discussed.

Leon apprised the Board of a discussion with Lora of the Junction Association which left him with impression that the Community Roots Offer s with City aid may be able to increase offer to closer to Assessed Value for the parcels. Also he was aware of others in the community that would contribute to make that transaction happen.

Dave said that he circulated some bullet point considerations on June 13 to Board members.

Tyler asked him to resend, which he did. Considerations pertain to obtaining tax guidance for Board and what assumptions might be made.

Joe mentioned that he sees topics to review 1} status of Community Roots offer and evaluation and communications concerning the same; 2} status of other Potential interested parties in possible purchase or development, 3} a review of tax structure issues and obtaining input on tax guidance.

Update on Discussions re: Community Roots Offer:

Joe advised Board that he and Charlie reached out to Jeremy Wilkening to get additional information regarding its offer. Jeremy Wilkening indicated that their organization would not, for statutory reasons be able to look at an Entity Purchase rather than an asset purchase. Not clear what  statute is a problem.

Also indicated that Community Roots focus, while would be taking assignment of the Junction Lease, is not interested in paying for parking as its focus would be on affordable housing. City is not interested in providing money for parking area purchase so no guarantee long term to preserve parking.

Joe outlined possibility of looking at selling one of the lots but looking at other prospects for other lots to ensure that parking is preserved and for obtaining better return in development.

Leon observed that Community Roots would honor the BIA lease and reminded the Board of the Community interest in a Community Hospital development.

Dave clarified that in evaluating a prospective offer with respect to Assessed Values that usually the assessed values lag behind the market values and noted the Community Roots offer as significantly less than the 2020 Assessed value.

Other Development Options and Considerations:

Charlie updated the Board that he anticipates that WSTP will likely receive an offer in 3 weeks or so for the 42nd Ave property that would contemplate that WSTP would retain an interest in the parking and likely have equity in the ongoing project.

Perhaps makes sense to direct Affordable Housing component to 44th Ave property only. Leon suggested it makes sense to reach out to Hospital Developers. Charlie and Leon will contact acquaintances in that business.

Many Board members weighed in with need to evaluate whether it is in best interests of WSTP to pursue a Sale or Own as Income property or participate in some combination for the various lots.

Joe and Board members indicated willingness and support for Leon reaching out to Hospital or other prospects, it is worthwhile for the Board to look at various potential projects. Charlie reminded the Board that evaluating to be sure there is adequate parking will be an important factor to weigh for a potential project.

Leon observed that a Hospital project would likely get a lot of special treatment and that Banks would readily finance the same. He also indicated a look at an Animal Hospital would be worthwhile.

Dave pointed out that all of these ideas relate and impact the potential value of the property.

Joe in sum up on this that Leon can do some outreach on potential Hospital developers. Charlie will continue outreach to other developers who may have interest.

Paid Parking Update:

Dave reminded the Board that the WSTP share of the revenue from the Diamond Parking Contract was below $7,600 in April. He advised that WSTP's share in May was approx. $9600 and the share in June was approximately $9,600. Joe observed that this is the revenue while the lots have been relatively empty so there is decent upside.

Tax Structure advice for WSTP:

Dave posed the question to the Board of whether WSTP should be actively seeking tax structure guidance now or wait until potential for a transaction is a bit more developed. Consensus is that Board should move ahead with seeking tax guidance on WSTP structure now. Dave indicated he would revise his "tax issues" question memo to look at WSTP from a broader perspective rather than just the Community Roots offer.

Adjournment and Next Dates

Joe invited a Motion to adjourn and a brief discussion was had about the next meeting. It appeared that August 26th at 9:30 looked to be a good time for the next conference which would remain by Zoom. Charlie moved to adjourn. Tyler seconded. The meeting adjourned at 10:35 am.

Tyler Johnson, WSTP Secretary