City hires more help for surplus properties

The City of Monroe is taking a three-pronged approach to selling the six remaining North Kelsey Street properties sitting along Tjerne Place Southeast north of U.S. Highway 2.

The city council approved Mayor Geoffrey Thomas authorizing contracts with a broker and an architecture and urban design company at Tuesday’s meeting — the city already hired a consultant in November.

Monroe City Administrator Deborah Knight said signing on with Seattle-based Lee and Associates Commercial Real Estate Services and Makers Architecture and Urban Design, LLC is the final piece needed to make the sale happen.

The city also hired on Grubb & Ellis — now Newmark Grubb Knight and Frank — seven years ago to sell the original parcels. Their contract ended in September. Four properties were sold in the last half decade — Galaxy Theaters, Walmart, Lowes and Providence Health were developed on those lots.

Makers Architecture will update materials the city will use to promote the properties, according to council documents. They created the original site renderings and marketing materials in 2010.

“Makers was selected based on the firm’s past experience with the North Kelsey development and existing catalog of drawings that can be amended rather than produced from scratch,” according to council documents.

Knight told the Monitor what makes the situation urgent is that the city will owe a roughly $2 million debt payment for the properties in 2020. Getting them sold off in the next two years is a high priority, she said.

“The goal is to have the marketing materials completed in early to mid-March to generate interest in an offering announcement,” according to council documents. “A delay in updating the marketing materials may postpone the schedule to advertise the properties for sale.”

Stowe has worked as the city manager for both Mill Creek and Bothell. He is largely responsible for the major transformations those cities’ town centers have undergone in recent years. Knight believes Monroe will be hiring his expertise, track record and connections.

Stowe recruited Lee and Associates after a Request for Proposals was sent out late last year. Coldwell Banker Commercial approached the city, according to Knight. They were interviewed by Knight, city community development director Ben Swanson and Stowe.

The team made their recommendations Tuesday. The council was given the option to deny both brokers, approve Lee and Associates as was proposed or ask that a city committee review each application. They approved both unanimously.

Lee and Associates will be the primary broker representing Monroe, according to council documents. They will negotiate the purchases and review offers. Other duties will include recommending pricing for the properties. They will provide tours to interested buyers and post appropriate signage. Coordination and communication with the city is expected throughout the process. 

Stowe will help the broker and the city evaluate the commercial real estate market, review the site’s zoning and the community vision, recommend development incentives and create marketing materials, according to council documents. He will also help negotiate the purchase, sale and development agreements on the city’s behalf.

The fee schedule for the broker contract is for a 5 percent commission split between the selling broker and buyer’s broker, according to council documents. That equates to about $25,000 split two ways for every $500,000 made in the sale.

Working with Makers will cost the city no more than $10,000, according to council documents. That amount and the roughly $42,000 that Stowe will be paid is included in the 2018 budget.

Stowe was also offered 1.25 percent of the final sale for each parcel sold. Knight told the Monitor the added incentive will ensure the properties are adventitiously sold.