The City of Monroe is moving forward with plans to rezone its North Kelsey Street properties as part of its latest effort to sell the land for new development. Meanwhile, debt repayments loom on the horizon.
Proposed code revisions on the remaining parcels north of U.S. Highway 2 would allow for the construction of mixed-use multifamily units, such as apartments above ground-floor retail. The city will first need to study how increasing residential uses there will impact traffic and the environment.
The Monroe City Council approved spending the $95,000 estimated to cover the cost of the studies. The planning commission will assess the results of the studies first, before sending recommended code amendments to the council for final review and approval, said city administrator Deborah Knight.
City staff and an outside team also developed a new site plan. Knight said it was designed to give prospective developers an idea of the potential for the properties.
“It just gives them another option for how to develop that site,” she said.
The city bought about 23 acres from Snohomish County in 2005, according to council documents. The original plan was to pair the land with existing city property to make way for offices, retail and a community commons.
Hardware store Lowes located there in late 2006, but then the Great Recession hit. Galaxy Theaters, Providence Medical Center and a Walmart were built by 2013.
There are 10 parcels remaining — about 11 acres. They sit along Tjerne Place Road, bordered by Chain Lake Road and North Kelsey Street the east and west, respectively, according to council documents.
“The City has not sold any parcels since 2013,” according to council documents. “The market for retail and office space has fundamentally changed since the recession and the growing dominance of on-line sales and ecommerce retailers such as Amazon.”
Knight tells the Monitor the city is currently attempting to sell six parcels next to Lowes.
The city will have to pay nearly $1.4 million in debt this September, and make another nearly $2.9 million payment in 2020. The second will be the final payment for the loan the city took out to buy the properties.
“The City Council’s goal is to market and sell the North Kelsey property and pay off the debt as quickly as possible,” according to council documents.
Knight said the money from the sales will hopefully cover the debt. She has brought multiple proposals before the council since November to support and speed up the process.
In February, the council approved hiring a broker team led by Seattle-based Lee and Associates Commercial Real Estate Services, which includes a representative of West Coast Commercial Realty, as well as a contract with Makers Architecture and Urban Design, LLP.
The city signed a contract in November with Stowe Development and Strategies, LLC, headed by Bob Stowe, who has worked as the city manager for both Mill Creek and Bothell. Stowe has a background in supporting the transformation of major town centers.
The city had hired Grubb & Ellis — now Newmark Grubb Knight Frank — seven years ago to sell the original parcels. Their last contract, which was extended six times, ended last September.
The broker contract includes 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.
Makers Architecture will update design materials the city will use to promote the properties, according to council documents. They created the original site renderings and marketing materials in 2010.
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 will help the broker and 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.
Stowe was also offered 1.25 percent of the final sale for each parcel sold. Knight told the Monitor the added incentive will push for an expedient sale.
Knight said the studies should be completed by the late summer or early fall.
Photo by Kelly Sullivan: The City of Monroe is spending more money in an effort to make its North Kelsey Street properties more desirable to developers.
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