(Top, a “before” view of the building that’s changing; below, an “after” view)

Two followups on our story yesterday regarding the change in the Admiral Safeway site project – not the supermarket itself, but the building to its east that was to be residential units and flex-work spaces. As reported here, it’s now slated for 78 residential units, almost double the original number, because Safeway says financing was not available for flex-work space. Safeway’s Sara Corn has followed up with two things: First, she and architect Bill Fuller will be at the next Admiral Neighborhood Association meeting to talk about the project and answer questions; that’s 7 pm Tuesday, February 8th, at Admiral Congregational Church. Second, she had mentioned there would still be some office-type space in that building, abutting Safeway’s loading dock on the north end of that building (along the east edge of the store). Answering our followup question about how much of that space would be available, she replied: “4 office units on the ground floor. Approximately 489 SF each. Could be used for office or retail (like a gallery use or something of the sort that can fit in that type of space).” P.S. If you missed yesterday’s report, it also included a link to these “before/after” renderings regarding the project change, which the city is reviewing.

(Click for a larger view; photo courtesy Safeway)
Days after Safeway shared that aerial of the Admiral construction site, a project change has turned up in the city Land Use Information Bulletin (a twice-weekly online publication): Instead of 40 residential units plus flex-work spaces, the building on the southeast side of the site (upper right side of the photo) is now proposed for 78 residential units and no office spaces. That building is being handled by a separate developer, not by Safeway itself, as listed on this section of the online documentation. According to the notice published today, comments on the change will be taken through February 10th.

1:12 PM UPDATE: We’ve also received a formal statement from Safeway, with graphics, regarding this change:

Safeway wants to update the community on the status of the redevelopment of its Admiral neighborhood property. Safeway is continuing to move forward with its redevelopment, and it looks forward to reopening to serve the community in August, 2011. Since obtaining its final permit approvals, there has been one slight modification to the project, which was dictated by the existing financing market. As approved, the project included both flex-work units and apartment units. After the approvals were obtained, Safeway’s development partner, who was going to construct the residential and flex work part of the project, learned that the banks would not finance flex-work units. For this reason, Safeway and its development partner have adjusted the project to eliminate the flex-work component and add additional residential units in place of the flex work spaces.

As can be seen in the proposed “before” and “after” renderings, the proposed change will not affect the exterior dimensions or design of the buildings except to add upgraded window treatments and some small balconies. There are also no parking or traffic impacts from the proposed change. In order for Safeway to open on time, it is important that construction continue on both the grocery store and residential phases of the development. Safeway is working with the City to obtain the necessary minor revisions to its project approvals to accommodate the change so that the entire project can be completed on time. If you have any further questions, please contact Safeway’s Real Estate Manager, Sara Corn at sara.corn@safeway.com

Here’s the “before/after” mentioned – 16-page PDF.

(Click for a larger view)
Construction has been under way for the new Admiral Safeway (along with two other buildings on the site – residential and flex-work space to the southeast, a small standalone retail building on the southwest) for four months now. The ground-level progress is easy to see if you drive past, but here’s a different perspective. One of the longtime project point people, Sara Corn, shares an aerial view, photographed during that sunny day earlier this week – top of the photo is the east side of the site, left side is north, right side is south (facing Hiawatha), bottom is west (facing Lafayette Elementary). She notes that the construction webcam is currently out of service for “repositioning”; it’s been part of the project website, which you can see here. The new store is projected to open next summer; we have an inquiry out for more detailed information on the project’s progress.

1:34 PM UPDATE: Corn says the store remains “on track” for the expected August 12th opening.

Six weeks from today, we should find out if anyone’s coming forward to buy The Hole, the West Seattle development site (map) that stalled after excavation more than two years ago, caught in legal skirmishes that are only now starting to play out. As part of said skirmishes, the first trial ended in November with a decision (which has been appealed) that the company that dug The Hole, Aero, has lien priority; King County Superior Court Judge Susan Craighead formally ordered the foreclosure sale two weeks ago, and the official notice was published Thursday in the Daily Journal of Commerce. According to that notice, the sale is set for 10 am Friday, February 25, at the King County Administration Building downtown. The notice also says: “The judgment debtor can avoid the sale by paying the judgment amount of $23,286,974.16 together with interest, costs, and fees before the sale date.” The “judgment debtor” is Fauntleroy Place, LLC, which is still linked to Seattle Capital; the site’s note is held by 3922 SW Alaska LLC, a concern linked to Madison Development, which had sought foreclosure in 2009 without having to pay the construction-company liens (totaling $4 million) that Judge Craighead has since ruled are at the head of the line.

The official “order of sale” is the newest development in the ongoing legal fight over “The Hole,” the two-years-excavated-and-idle site at 39th/Alaska/Fauntleroy that once held Schuck’s and Hancock Fabrics, demolished for a mixed-use project that was to include a Whole Foods Market and a new Hancock store before it all fell apart in legal/financial wrangling.

(Aerial view of “The Hole,” looking westward, September 2010)
In case you missed it, the first trial regarding the site concluded last month with King County Superior Court Judge Susan Craighead ruling that construction companies Aero and Ledcor are first in line to get liens paid off with proceeds from a foreclosure sale of the site. Since the verdict, she has rejected a motion for a new trial, as we noted two weeks ago, and has since rejected a challenge to Aero’s motion asking her to order that sale. Result: As of this past Monday, she has ordered the sale to take place within 60 days. You can see the sale order here.

So now what? Orders like this are handled through the courts and the King County Sheriff’s Office, as explained here. We’re got inquiries out to find out if any further challenges are planned that could hold it up. The two construction-company liens alone, which are first in line for any sale proceeds, total almost $4 million (not counting interest dating back to December 2008). Earlier in the saga, the site’s would-be new owner, an entity related to Madison Development calling itself 3922 SW Alaska LLC (that’s the site’s address of record), had tried to get foreclosure ordered without the liens taking priority. As part of its challenge to the judge’s ruling, 3922 SW Alaska claimed it discovered post-trial that original developer BlueStar had been talking with Aero about resuming the project. BlueStar boss Steve Hartley had told WSB this past spring that he still hoped to find a way to finish it, even though by that time they no longer had any official involvement in the project.

P.S. If you don’t drive through this section of West Seattle often, it’s worth noting, though technically unrelated, that the future Trader Joe’s site (latest update here) is just east of “The Hole.” The newly installed city-permit-notification sign would be in the lower right of our “aerial” photo if we sought the same shot today.

(Aerial view of The Hole, September 2010)
Court records show two notable moves this week in the ongoing legal fight over “The Hole” at 39th/Fauntleroy/Alaska in West Seattle (map; the project once known as Fauntleroy Place and slated for Whole Foods, Hancock Fabrics, and residential units, excavated before stalling in a financial/legal tangle more than 2 years ago).

In the wake of last month’s decision (WSB coverage here) that construction companies Ledcor and Aero have “lien priority,” there was a motion for a new trial. It came from 3922 SW Alaska LLC, trying to buy the site without paying those liens; it claimed it had uncovered evidence that a key witness from the project’s original developer, BlueStar, had been talking with Aero about “reviving” the project, without disclosing that for the trial.

Here are the two new developments: This week, King County Superior Court Judge Susan Craighead rejected the motion for a new trial. Plus, Aero filed a motion asking her to order the foreclosure sale of the site, to get the money to pay off the liens she ruled have priority. The judge is scheduled to consider that motion next week.

If you arent sure what the Southwest Design Review Board is/does, that’s understandable, since it (like the city’s other DRBs) hasn’t made news much this year – only two meetings! It’s an all-volunteer, city-convened board that reviews major development proposals for this area (full explanation here). Just a few years ago, the board was meeting for most if not all of its potential twice-monthly sessions, but if there’s no project to review, there’s no meeting. The board needs full membership, though, just in case, and that’s why we’re sharing a final reminder about an opening; application deadline this Friday. Each member on the board (current roster here) has a role – and the one that’s opening represents the local business community. (You do not have to be a business owner, just able to review development applications through the “how would this affect local business?” prism.) Interested in applying? Get the application here; read more in the original citywide announcement here.

Even after the vote on the California SW rezoning proposal, we stayed at the City Council’s Committee on the Built Environment meeting because one more item of local note was coming up: A vote on another years-in-the-making proposal, changes to the Multifamily Code – as in, zoning for multiple-unit projects such as townhouses.

When the process began back several years ago, the development climate was very different – even here on WSB, it seemed we were publishing a “teardown-to-townhomes” story every day. Now, development proposals are few and far between, as already-built units sit vacant, and developers struggle with financing. But it’s invariably cyclical, so the process marched on, and the committee just gave its approval to the package of changes (including the one about which local architect Brandon Nicholson had voiced concern a few weeks ago on behalf of a regional architects’ group). A breakdown of what it’ll mean to future projects will have to wait till later; you can read copious details in this section of the city’s website. Next step: Final council consideration on December 13th (which likely also will be the date the full council considers the California SW rezone).

We just checked, and this meeting is still on: For those who’ve been following the saga of townhouse design – which traces back more than two years – the City Council Committee on the Built Environment has a public hearing tonight on the proposed changes to the Multi-Family Code. The hearing is at the Wing Luke Museum downtown at 5:30 pm (following a hearing on an unrelated item) – scroll down this page for details. The proposal originally went to the council in January 2009 (WSB coverage here), but it’s been in the works even longer – almost 2 1/2 years. Someone who’s been involved all along the way is West Seattle architect/developer/Design Review Board member Brandon Nicholson – he was at then-Mayor Nickels’ original announcement in summer 2008 (WSB coverage here). He sent around information about tonight’s hearing, on behalf of CORA (Congress of Residential Architects) NW, with this concern:

The word on the street is that business groups will be coming out in force to oppose a specific portion of the bill that creates a new streamlined design review (SDR) process & mandates that all new townhouse projects must participate. They are asking for a set of prescriptive design standards to be used in lieu of SDR.

SDR is a process that provides citizens early notice and an opportunity for meaningful input into development in their neighborhoods. It has been carefully designed to streamline the inefficiencies inherent in the current design review process. Every attempt has been made to balance the needs of developers for speed and predictability against the needs to provide citizens with notice and a forum for input. SDR is the gate-keeping mechanism that allows designers the flexibility needed to design buildings that are sensitive to context, address the needs of the marketplace, and provide a multiplicity of housing types, while at the same time serves to check that this flexibility is not abused.

The prescriptive design standards provide no mechanism for public input, no way to account for context, and no ability to depart from the code when site-specific conditions warrant. They are a cookie cutter formulation that establishes a set of prescriptions that can be copied from one project to the next. Projects that are well designed, sensitive to context, but don’t comply with the prescriptive standards go to the back of the line, while indifferent proposals get an automatic green light.

If these issues are important to you, I encourage you to come to the meeting, write to the council, & let your thoughts be known.

After tonight’s hearing – likely within the next few weeks – the committee and then the full council will vote on the proposal, which you can read along with lots of other information linked here. If you want to go to tonight’s hearing, which starts at 5:30 pm with a hearing on South Downtown Neighborhoods, it’s at 719 South King Street (map).

(Aerial view of The Hole, September 2009)
“The Hole” – the excavated Fauntleroy Place site at Alaska/Fauntleroy/39th – has been sitting there for two years, through the snowy winter of 2008-2009, the not-too-bad winter of 2009-2010, and the rainy-so-far fall of 2010, with no likelihood of any change in its status soon. That was addressed by King County Superior Court Judge Susan Craighead this past Monday when she issued her decision in the first major trial related to the stalled development (WSB coverage here). By the way, the full 53-page decision is now online; we’ve downloaded a copy and re-uploaded it so you can read it – go here. A judgment ordering foreclosure sale – a document that was not available while we were in court on Monday – is also online now; read it here. Meantime, we’ve looked into the safety issues she raised. As noted in our Monday report, Judge Craighead wrote:

… The ongoing viability of that excavation is in doubt. The shoring system that supports the excavation is by design a temporary system. It was neither designed nor intended to be in place for longterm suspension of the Project, and it has already been in place two years, well beyond its intended life span. The City of Seattle is the governing jurisdiction, and can at any time order that it be decommissioned and the excavation filled in, and if the owner fails to perform such an order, the City holds a $1 million cash deposit in pay for that work to be performed. … In the meantime, the shored excavation is subject to potential failure. Even a minor failure, where one of the shored walls shifted inward by just a matter of inches would result in substantial displacement and settlement of soils supporting adjacent streets, houses and other structures.

So, how specifically is it being “governed” by the city? We took the question to two city agencies. First, the Department of Planning and Development, which issues permits for projects. Spokesperson Bryan Stevens told WSB, “Both DPD and SDOT receive a monthly summary report of the shoring monitoring from the private geotechnical special inspector that was hired by the owner (The Riley Group took over from the shoring designer, Kleinfelder). The survey readings are taken twice a week. SDOT also has their inspectors visit the site periodically. To date, things have looked good.”

As for the question of the $1 million bond, and what it would take to order that an excavation like this be filled, Stevens referred us to SDOT, whose communications director Rick Sheridan provided answers to our questions. Read on for that part of the story:Read More

(Aerial view of The Hole, September 2009)
We’re in King County Superior Court Judge Susan Craighead‘s courtroom downtown, where she has just announced her findings in the first trial over the two-years-stalled West Seattle project known as “The Hole” (or “Hole Foods,” before Whole Foods Market announced in July it was no longer part of the project). Among Judge Craighead’s opening remarks this morning: “This case has been my window on the collapse of the financial system and the real estate market. … It seems that all the ‘suits’ were to varying degrees in complicity in a sort of a game that constituted construction financing during this period.” What she was deciding here is whose lien has priority – and she has decided it’s the general contractor, Ledcor Construction, and their subcontractor, Aero Construction (which dug The Hole).

(Photo published on WSB April 30, 2008, courtesy John Cashill)
Various parties argued that what had been done to the site before a certain key point in summer 2008 – including the April ’08 hole-digging to which the above photo is related – did not amount to “work” and therefore Ledcor and Aero were not first in line with their liens – but the judge disagreed with that. She said that former financier Seattle Capital, when trying to make the claim during a potential sale of the site that no work had been done, “should have known and did know (that contention) was false.”

One big loser in her ruling: 3922 SW Alaska LLC, the company related to Madison Development that agreed to buy the note for what remained of the project and its excavated site, then (to boil it way, way down) sought “judicial foreclosure” more than a year ago in hopes of moving on with the site without the burden of millions of dollars in liens to be fulfilled. We are now reading our copy of the 53-page ruling (while about 10 lawyers in the courtroom do the same thing – they have a short window here to ask the judge for clarification before she moves on to an unrelated criminal trial at 10 am) and are going through it – though we didn’t cover the entirety of the 2-plus weeks of testimony in the trial, they are summarized in the ruling, and it affords quite the view into never-before-publicized specifics of how the whole project fell apart. So, what does this all mean for the future of “The Hole”? Depends first on whether the decision is appealed, and what happens with other pending legal action. More to come.

ADDED 11:05 AM: We will transcribe some of this later – since the document itself is not likely to be available online immediately – but one note summarizing the last few pages of the ruling: The judge says that the site should be sold at foreclosure as soon as possible, because The Hole itself was never meant to be permanent, and could either fail or be ordered by the city to be filled in, in which case millions of dollars in work, representing part of the value of the property at sale, would be lost.

ADDED 3:24 PM: The exact language from the judge’s ruling regarding that section is the first transcription we’re adding – read on:Read More

Tomorrow morning, a judge’s announcement is scheduled to be the next step toward the future of The Hole – the excavation (behind the green-screened fence in our photo) for the stalled West Seattle project originally known as Fauntleroy Place, once slated for a new Whole Foods (they’ve since pulled out) and Hancock Fabrics (they haven’t answered requests for comment), plus apartments. The decision is in the first major trial in the tangle of lawsuits over what went awry; what’s scheduled to be decided is who has “lien priority” – the entity that holds the site’s note, 3922 SW Alaska LLC, is arguing against the claims of Ledcor Construction, among other components of the complicated case. If you’re interested in the fine print, here are documents summing up the points made in closing statements (which we covered a week and a half ago) – one from 3922 SW Alaska here, one from Ledcor here.

But The Hole’s future isn’t entirely a matter for a judge and development company to decide.

Read More