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Developer gets extension on downtown high-rise project
Canadian developer United Properties Ltd., on Nov. 3, was given its third extension of a purchase and sale agreement on property slated for the downtown mixed-use Symphony project.
In a unanimous vote, the Federal Way City Council granted the company and its South Korean counterpart, Lander Korus, until the end of the year to secure financing and proceed in purchasing the 4.1-acre former AMC theatre site, 31600 20th Ave. S. The developers are currently working to finalize negotiations with two to three South Korean investors.
"Dealing with overseas investors, it takes some time, given the 17-hour time difference," said Federal Way resident and Lander Korus representative Wayne Choe.
The approximately $235 million Symphony endeavor has been scheduled since late 2007. In September, the council gave United and Lander Korus until Nov. 4 to land the investors necessary to get the project off the ground. However, more time is needed, United Properties president Victor Setton said.
"Unfortunately, the seven weeks granted initially was just not enough time to deal with investors internationally," Setton said.
Lander Korus, on behalf of United Properties, agreed to pay $23,836 to the city for carrying costs associated with the extension. This is equivalent to $410.96 plus interest per day until Dec. 31.
If the purchase and sale agreement is completed before this date, the city will refund Lander Korus the appropriate amount. These carrying costs and accrued interest are in addition to the $150,000 United Properties agreed to pay the city following the first extension of the purchase and sale agreement.
The most recent extension to the purchase and sale agreement will not change the city's $6.156 million asking price for the property. Though the project has taken much more time than expected to gather speed, the council members had very few comments or questions for Setton and Choe preceding their vote.
"We look forward to working very closely with you," mayor Jack Dovey said.
Construction of Symphony was scheduled to begin summer 2008. In July 2008, the council granted United Properties an additional year, until Sept. 11, to anchor finances for the project. The tough economy was blamed for the delay. The developer agreed to pay the city to cover escrow costs and hold the land until construction began or the updated contract expired.
This past August, only weeks away from the contract's September expiration date, United Properties proposed to build a performing arts, cultural and conference center at the location — in place of Symphony. It requested until February 2010 to secure funding for that project. The city council chose to reject the proposition in hopes that United Properties could access financing in the remaining weeks before its contract expired.
The day before the Sept. 11 contract was to pass, United Properties announced its desire to team with Lander Korus in an attempt to garner funding for Symphony. Choe approached Setton with the partnership opportunity. The developers have not worked together in the past. In fact, Choe and Setton, who resides in British Columbia, had only just met face-to-face. Choe confidently told the council that the money to construct Symphony would come directly from South Korea.
The city council voted 6-to-1, with council member Jim Ferrell issuing the dissenting vote, to grant United Properties and Lander Korus a six-week extension on the agreement. The move gave Setton and Choe time to further discuss how a partnership between United and Lander Korus would work.
Lander Korus is prepared to become the developer and financial backer for Symphony. United Properties is prepared to serve in an advisory role, helping the South Korean company navigate the city's building regulations.
"Sometimes fate happens at the eleventh hour and things work out," council member Dini Duclos said in September.