The original developer is officially out of the unfinished parking garage in downtown Kent.
But city officials said it remains uncertain when a new developer might be found to take over the project at Fourth Avenue and West Street that remains entangled in legal battles.
Bingo Investments of Bellevue paid $6.6 million to Centurion Financial Group, of Kirkland, the lender, in a credit-bid sale involving the property June 6 on the steps of the King County Courthouse in Seattle.
That sale removed original developer Plan B Development, of Bellevue, run by Ben Errez, from the project, City Attorney Tom Brubaker said.
“But it’s still an enormous mess,” Brubaker said. “It’s not free and clear.”
A legal fight remains between Centurion and Swinerton Builders of Washington, the primary contractor, over whether the lender or the contractors should be first in line to collect on liens when the property is sold to a final buyer.
King County Superior Court Judge Richard McDermott ruled Jan. 11 this year that the contractor and subcontractors rank ahead of the lender in line to collect on property liens. Centurion has appealed that ruling.
The city of Kent has the first deed of trust on the property, followed by the contractors in the second position and now Bingo Investments in the third spot, Brubaker said.
To further complicate matters, Bingo Investments was one of three investors that backed the original loan by Centurion to Plan B Development.
The 350-stall parking garage, just south of Kent Station, has sat idle since contractors walked off the project in May 2007 when they were not paid by Plan B Development. The lender cut off funds to Plan B Development because the project went over budget
The garage, about 75 percent complete, had been slated to be part of the first phase of a proposed $40 million project to build condominiums, retail stores and a hotel.
With Plan B Development out of the project, fewer signatures would be required on documents for an eventual sale, said Ben Wolters, city economic development director.
“It simplifies the opportunity to resell the property,” Wolters said. “But there are still a number of legal issues to sort out before the property is sold.”
If Bingo Investments and Swinerton can agree on a sale price, the property can sell, Brubaker said.
“But I don’t see that (a sale-price agreement) happening,” Brubaker added.
Until debts are paid to Swinerton and the subcontractors, it remains uncertain when a new developer would step in. Swinerton has filed to foreclose on its lien. That could lead to a foreclosure sale by the King County Sheriff’s Office.
“At that point, one person would own the property and it could get back on the market,” Brubaker said.
Wolters said the credit-bid sale to Bingo Investments marks “a step forward in the ultimate resolution of the project.”
“But we’re still in the thick of it,” he added.
Once construction resumes on the garage, it’s expected to take another three months or so to finish it before work starts on the rest of what’s anticipated to be a mixed-use project. The plans for the rest of the project remain uncertain until a new developer takes over, with a laundry list of projects that must be approved by the city.
Contact Steve Hunter at 253-872-6600, ext. 5052 or shunter@reporternewspapers.com.
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