(View of The Hole, photographed last month from atop the unrelated Link project)
One week after we reported the start of the trial in the tangle of lawsuits over “The Hole,” aka Fauntleroy Place, aka the 39th/Alaska site once envisioned for Whole Foods Market, Hancock Fabrics, and apartments, till everything fell apart in fall 2008, AFTER the site was excavated for what was to be a big underground parking garage. Yesterday, we went back to court to see how the trial’s going. For WSB, Katie Meyer sat in on yesterday’s session in King County Superior Court, and reports that Judge Susan Craighead estimates there’s enough testimony and cross-examination remaining to continue till at least Tuesday, with closing statements expected that day, and “oral findings” next Thursday.
Witnesses yesterday included BlueStar Management executive Steve Hartley, geotechnical engineer David Cotton, and Bryce Bryan Campbell, who was executive vice president of financier Seattle Capital when it was dealing with various parts of the 2-years-stalled project. Most of what they’re all arguing about (we published the full list of parties involved, from atop the legal documents, here) is who has the right to what compensation and in which priority/order. Ultimately, however this gets settled will affect what happens at the site next – a new entity related to Madison Development has been trying to take over the site, seeking “judicial foreclosure,” but until all the liens are settled, that apparently cannot happen.
Part of what’s being sorted out is how the whole thing fell apart, how BlueStar moved from being the developer to not being the developer (and some of that firm’s circumstances at the time were part of the questioning in court yesterday). BlueStar had told WSB this past spring that they still hoped somehow to be able to take over the project again; executive Hartley noted in court yesterday that they’d worked on it for seven years. Testifying later, former Seattle Capital executive Campbell said Fauntleroy Place had originally been seen as an investment for the firm, not a loan: “At the time, it wasn’t obvious the whole economy was going to come down.” He said SC had no intent to take the project through to completion, but rather to find a new buyer/sponsor for construction expenses, while retaining some ownership interest in the project. They had a choice between two such firms, and UDR won – but the path to finalizing that grew rocky, he testified. Whose fault it was that the project fell apart, is still at issue, as the different parties have different views, and that’s what the judge will have to sort out. Today is the last scheduled day of testimony for the week; we’ll go back to court when it resumes next week.
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