By Patrick Robinson

The future of the parking lots in the West Seattle Junction remains uncertain following a meeting of the shareholders of the corporation that owns them on Oct. 28. 

Held at the Senior Center of West Seattle the meeting was the first in nearly two years. The corporation, West Seattle Trusteed Partners, did not hold a meeting in 2020 or this past spring explained President Joe Erickson, “Because we were not confident we had the logistics to accomplish it.”

The meeting served a variety of purposes from the election of new Board members to a review of finances, to the discussion of a recent offer to buy and develop the land by Community Roots Housing. Newly elected to the seven member board were Director of the Senior Center of West Seattle, Amy Lee Derenthal, and Jack Menashe, owner of Menashe Jewelers in the Junction.

Treasurer Dave Gowey, said the financial review showed that the corporation is solvent and well in the black.

But the shareholders were most interested in the status of a potential sale, or beyond that, some other future disposition of the land.

An offer was made last April by Public Development Authority, Community Roots Housing (CRH), acting on behalf of the City of Seattle to buy the land (this after they paid for an appraisal) for $14,490,000. If that number seems low it’s useful to understand that the West Seattle Junction Association holds a lease on the land, preventing development, for another 16 years. CRH detailed their proposal in a public Zoom meeting online last week showing their intention to develop affordable housing, senior housing, a community meeting space, a business incubator, mid block walk throughs, street side amenities like benches and garden spaces, and rooftop decks. If approved, the shareholders would get their money within 90 days. The one major drawback to that choice is that CRH cannot pay for the construction of parking. CRH Communications and Philanthropy Manager Jessica Sherwin said, "CRH is looking into creative ways to find funding for the parking. We cannot use any of the city funds specifically allocated for affordable housing on the parking component, but that does not prohibit us from prospecting and securing non-city funds to move the parking piece of the development forward."

Worth noting is the fact that the entire process by which development is pursued would be accelerated dramatically by the fact that any projects built by CRH would not need to go through the same lengthy design, permitting, and financing process as private developers would.

Vice President Charlie Conner of Conner Homes discussed the potential for other developers saying that he’s been in discussion with multiple “seasoned developers” and that WSTP’s goal would be to “preserve parking in the junction” since that as President Joe Erickson also said, “is our mission.”  Conner said that it was WSTP's intention that at least 20% of any development have "an affordability component."

The terms of any potential deal with a private developer remain uncertain of course since they would need to spend a year or more in design, then permitting, and then securing the financing  resulting in likely another year or two before construction could begin. That  process would be done incrementally and each component might take 2 years to complete. 

Conner also discussed the potential of not selling the parking lots but instead retaining ownership as a developer would then either lease the land or simply through a negotiated deal, build on the land with parking as part of it. He and Erickson suggested that the parking could be "condominiumized" meaning the corporation would continue to own it long term.

This might mean the shareholders in WSTP would need to wait several years for any kind of financial compensation.

Additionally while retaining parking was deemed the highest priority for the purpose of keeping the Junction business community alive and vital,  due to the Junction being a designated urban village, traditional developers do not need to build parking. It’s possible that a promise to build parking could be lost in the traditional design review process. 

The concept of selling shares back to the corporation was mentioned “at market value” which no one in the meeting expressed interest in doing.

Board member Leon Capelouto expressed his belief that developing property can carry risk. “I’m a developer myself and I know that there’s a lot of risk involved in developing property.” Vice President Charlie Conner agreed. 

Lora Radford, Executive Director of the West Seattle Junction rose to address the meeting, and explained that she and CRH were looking at a way to provide 150 parking stalls. The Junction has more than 700 parking spaces but 228 of them are on the land that was the focus of this meeting. She also disclosed that the amount that CRH would pay could rise to $18 million. In Conner’s discussion he mentioned that up to 105 spaces would be provided and he noted that the cost to build them now is “around $55,000 each” and that the developers he’s been speaking with were in the range of $20 million for the land. Any higher amount like that would require a formal appraisal, and that the land have no encumbrance.

The question of taxes looms over any of these discussions and the WSTP board is well aware of that. It led them to look into possibly changing the type of corporate structure to explore taxation advantages. The topic of an LLC or Limited Liability Corportation came up as did a Sub Type S Corporation and a partnership. The latter two require that the members be individuals and since some shareholders are companies, that would preclude that kind of change. In any case, the amount being taxed would most likely vary depending on when the deal could be done. That’s based on a number of factors including taxation changes that might take effect in 2022, the value of the land if it did not happen for a few years, and how the proceeds from a sale were handled. 

Conner, Erickson, and other board members indicated they believed a vote on the CRH proposal would be premature even though they said they were talking with several developers, that they were “at the beginning” of the process.