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Federal Way sets deadline for high-rise developer's land purchase
Federal Way moved one step closer to the construction of three downtown skyscrapers.
A revised Purchase and Sale Agreement for Federal Way's former AMC Theatre site has been finalized, and Twin Development is expected to close on the land by Sept. 30.
On Tuesday, the Federal Way City Council approved the agreement in a 6-1 vote. City council member Jim Ferrell dissented. Earlier this year, Canadian developer United Properties backed away from purchasing the land. The city council voted to allow Twin Development to take over. A new agreement was needed to reflect Twin Development's interest.
In the past, Twin Development partner Steve Smith has said the developer will rely on foreign investors to provide the money necessary to purchase the acreage. Smith and his Twin Development business partners, Luke Hwang of Federal Way and Pom Kwak of Tacoma, have not yet secured the money needed to close on the property, but are confident it can be gathered by Sept. 30, Smith said.
"We're working on that," he said. "We have some and we need a little more, but we think it's going to happen."
When the project is completed in 2016, hotel rooms along with residential, retail and office space will be available in one 35-story tower and two 45-story towers. A 1-acre park and a primarily underground parking garage will also be included on the property at 31600 20th Ave. S.
Purchase and Sale Agreement
The city council has been clear in what it expects from Twin Development. Much of what is included in the Purchase and Sale Agreement was also found in the 2007 agreement with United Properties.
Following are some key terms:
• Twin Development will pay $6.15 million for the 4.1 acres.
• Earnest money ($100,000) deposited by United Properties will be credited against Twin Development's purchase price.
• Twin Development will hold onto a multi-family property tax exemption that was laid out in the contract between the City of Federal Way and United Properties.
• The 2009 Building Code Regulations pertaining to high-rises will be followed.
• Attempts to reduce carbon emissions and encourage a walkable and transit-oriented lifestyle will be made.
• The project will be built in three phases. Phase one, to commence next summer, will consist of the public park, one 45-story tower and the parking garage. Each phase thereafter will consist of a tower. Depending on a market study, a commercial or public structure could be built in the third phase.
• The appearance of bulk and height in the towers will be minimized and opportunities to distinguish one tower from another optimized through design and architecture.
• Each tower shall include a grounded three-to-five-story base, with the rest of the high-rise set back from the base, to create a pedestrian friendly environment.
• The buildings will be arranged in a way that captures sunlight and mountain views, makes obvious connections to the nearby transit center, and provides at least three public access points into the site and park.
• Final park design will be approved by the Federal Way City Council.
• Twin Development will involve the public in drafting a design for the park, but the park will not be deeded to the city upon completion.
• The parking garage shall have enough room to accommodate uses of the high-rises and park.
• Traffic impact mitigation fees will be payed by Twin Development.
The agreement is a significant step in the right direction, considering the city council has been trying to launch economic development on the site for the past three years. It granted United Properties five extensions on its Purchase and Sale Agreement. Still, the developer was not able to come up with financing and relinquished the property at the start of the summer.
Once Twin Development has purchased the property, it will rely on foreign investors to help fund the construction of the $350 million project. Federal Way's designation as an EB-5 foreign investment area will help. Foreign investors who pump $1 million into the unnamed project will be granted a legal two-year permanent residency status. Smith expects several investors to pre-purchase a condominium and live in the finished towers.
The full Purchase and Sale Agreement can be found on the city's website, www.cityoffederalway.com, in the city council's Sept. 7 regular meeting packet by clicking the "City Agendas, Minutes, Packets and Videos" link in the blue "Quick Links" bar on the right side of the page.