Bulletin: Lawsuit filed in West Seattle Whole Foods development

| Development | West Seattle news

A major followup this morning to our status report yesterday on the idled Fauntleroy Place/Whole Foods development at 39th/Alaska/Fauntleroy: WSB has learned that a lawsuit has just been filed. The firm that has been developing the project, BlueStar Management, is suing Fauntleroy Place LLC (the official site owners), Seattle Financial Group, and Seattle Capital Group (one of the governing parties of FP LLC). We are working right now to get a copy of the full complaint, but a watchlist of newly filed lawsuits summarizes this one as alleging breach of contract and defamation. Construction on the site has been idle since last fall, and Seattle Capital disclosed in late January that they were in the process of selling the site, though they have not been available for comment this week and the status of the reported sale is unknown. More to come; we will add comments and documents to this story as we get them. 11:12 AM UPDATE: BlueStar’s Easton Craft referred us to the company’s lawyers for comment, and we expect to speak with them soon. There also is word of an additional lawsuit linked to this project, also filed this week, and we are working to get details on that. 8:09 PM UPDATE: We have a statement from Susan Rae Fox at Ryan, Swanson and Cleveland, the firm representing BlueStar, in response to several questions we asked:

BlueStar Management, Inc. filed the action to recover unpaid management fees incurred in connection with the Fauntleroy Place project and is merely seeking to be fairly compensated for the project development services it rendered. BlueStar has been committed to, and worked diligently for the Fauntleroy Place project from the very beginning and was shocked and saddened to be summarily terminated in December 2008.

The action was filed after a formal request for mediation was rejected and was in no way intended to adversely affect any current activity on the project. BlueStar continues to believe that bringing Whole Foods to West Seattle as part of the Fauntleroy Place development will be good for West Seattle. BlueStar wants to see the project succeed and does not believe that the filing of this action is inconsistent with that goal.

WSMom March 13, 2009 (11:04 am)

This is disappointing, especially for those of us who sew.

meg March 13, 2009 (11:29 am)

Yes. I, too, am very sad that Hancock Fabrics was swallowed up and may not soon re-emerge from this hole in the ground.

Christopher Boffoli March 13, 2009 (11:45 am)

Nice scoop, WSB! Let’s hope they can resolve this in mediation as if it winds through the legal system it likely won’t see the inside of a courtroom until 2011.

aquatic March 13, 2009 (11:51 am)

I heard that Hancock was in bankrupcy, so they may not come back anyway. I sure miss having a local source for fabric and thread.

WSB March 13, 2009 (11:54 am)

We investigated that one several weeks ago. The bankruptcy was years ago. They emerged from Chapter 11 last August:
http://www.reuters.com/article/pressRelease/idUS234289+01-Aug-2008+BW20080801

Judnot March 13, 2009 (11:57 am)

I’m sew disappointed!

aquatic March 13, 2009 (12:02 pm)

I’m glad to hear Hancock is healthy, maybe they will open at another location. Seems like there are plenty of vacant buildings around.

Diane March 13, 2009 (12:48 pm)

what a great opportunity for a small business startup fabric store in one of the many now open retail spaces, along California? or why doesn’t Hancock open an interim smaller store in another location? I love to sew, and agree that with current economy, having local access to sewing supplies is a huge value; please someone?
~
I’m not much a fan of Whole Foods, never shop there; but was looking forward to this development as great new addition to our neighborhood, especially as gateway to West Seattle; hard to say whether big empty hole looks worse than old auto supply & old fabric store; that building was very ugly

JEM March 13, 2009 (12:53 pm)

Yes, I miss Hancock too. They could find so many other locations to fill. Maybe we should all contact corporate HQ and push for that!

Admiral Lady March 13, 2009 (2:54 pm)

Great – more delays in WS getting a Whole Foods… Grrrr…

dlc March 13, 2009 (3:04 pm)

I think of our missing Hancock store every time I go to the JoAnns at Southcenter. I look forward to its return also…

FYI March 13, 2009 (3:11 pm)

Hancocks deal is actually part of the problem…or rather Blustars inability to draft good deal documents. Hancock will pay so little for such a large and overly expensive place, the project was relying on WF and the condos for majority of the returns. This is the exact opposite of how traditional projects operate where the retail supports the residential. Trust me. Hancock is making off like a bandit in this deal considering how cheap their space will be.

The real losers in this are you West Seattlites who have this gargantuan hole…Unless the project was stalled due to community hatred as many other holes around the city are a resultant of.

monroe1200 March 13, 2009 (3:37 pm)

YEAH!!! PLease leave West Seattle to us locals. The very beauty of why we live over here is being sold off and dug up, just like the rest of the city. I don’t mind new people moving here, it’s just that to come here and then to start changing the very fabric of it is wrong. We don’t need another high-end grocery store, we have MM, PCC, and plenty of niche shops to get us through life.

Another proud West Seattle resident that’s glad to see the OVER development stop.

Scott March 13, 2009 (3:47 pm)

If the deal falls through maybe it should be turned into the world’s largest skate park.

rnl March 13, 2009 (4:01 pm)

I wish Trader Joe’s would be here instead on Whole Foods –

quiz March 13, 2009 (4:33 pm)

fill the hole with water…Hancock Lake.

Jessica Smith March 13, 2009 (4:57 pm)

Can’t say I’m too upset. Just give me Hancock Fabrics back, and I’ll be fine.

PSPS March 13, 2009 (5:21 pm)

So now we’ll have our own perpetual hole in the ground like Stone Way. I wish the city would require performance bonds for these projects so this wouldn’t happen. If the horrible “Junction Megaproject” actually begins demolition, what guarantee do we have that the project has complete and irrevocable funding through completion?

BobLoblaw March 13, 2009 (5:42 pm)

I wonder if we could cut that part of town out and simply paste the junction a couple blocks east. Man I wish this was a game of Sim City!

bluecella March 13, 2009 (6:38 pm)

It concerns me that there’s just this little flimsy fence around that giant gaping hole. I hope there are no car accidents that happen near there. It just doesn’t seem safe. BTW Whole (Hole?) Foods is not a union employer.

khatti March 13, 2009 (8:01 pm)

I agree on the Trader Joe’s. Who can afford to shop at Whole Foods anyway? A Trader Joe’s store is badly needed in West Seattle and would make a lot more people happy than an overpriced luxury store like Whole Foods.

sophista-tiki March 13, 2009 (8:30 pm)

NOOOOO not the fabic store!!!!

sophista-tiki March 13, 2009 (8:36 pm)

we dont need a Whole Paykcek as much as we need a Trader Joes! theres pleanty of overpriced food in West Seattle already

Rebecca March 13, 2009 (8:37 pm)

It seems as if there’s just a lot of dead empty space in that general area of west seattle stretching along 39th ave sw/fauntleroy ave sw/sw alaska street and it’s too bad they don’t add some retail stores that cater to the low income community more like a big lots would be cool, or a grocery mart. Just a thought. could care less about a whole foods mart

56bricks March 14, 2009 (7:26 am)

Does this mean Blue Star is also out of the Gateway (Huling showroom) project?

WSB March 14, 2009 (8:07 am)

As we have noted in the previous reports, BlueStar has said the fate of that project – and the mixed-use building at 5020 California – depends on what happens with Fauntleroy Place. So both of those are at the very least up in the air. The Gateway Center project hadn’t gone very far, fwiw – they had options on the property, they told me – and it hadn’t even gone to early design guidance. But 5020 California had gone all the way through Design Review and the buildings on the site had been vacated – TR