The Federal Way City Council is expected to vote Tuesday evening on an $8.2 million purchase of a 7.48 acre property, meant to revitalize downtown, according to the mayor.
The space is one of four properties the city is proposing for “Town Center,” the core of Federal Way’s downtown, which already includes Town Square Park, the Transit Center and the proposed $32 million Performing Arts and Conference Center.
About four-and-a-half months ago the owner of the former Target site was asking for about $6-6.5 million and had been since 2011, according to the Commercial Brokers Association.
The property is owned by Byung Park, the president of Pal-Do Company Inc., and is located on the southwest corner of South 316th Street and 23rd Avenue South.
But on July 14, the status of the listing price changed to $8.5 million, a little over a month after the Federal Way City Council approved the Performing Arts and Conference Center.
“To say the market drove the price is completely accurate,” said Federal Way Mayor Jim Ferrell, agreeing that Park may have changed the asking price because of the performing arts center’s approval. “The PACC is going to cost $32 million but the amount of money spent on the PACC and hotel will represent just shy of $60 million.”
The Mirror could not contact Park by deadline.
Ferrell said that kind of investment made the property more valuable and it will continue to increase in value based on its location.
Although the city had been interested in the property for years, Ferrell said there wasn’t a serious conversation about the acquisition until about seven weeks ago.
“We were very concerned and worried about losing this opportunity because in real estate, for decades, the property in the downtown core has been tied up and you see really the bi-product of that — this is stifled growth in downtown,” Ferrell said.
And they may have lost that opportunity because Ferrell said Park had another offer.
“That offer on the table would have caused the property to be land banked — that means it was going to stay exactly where it was,” Ferrell said. “Nothing would have happened for years and years.”
The company’s offer was for $8 million, he said.
Ferrell wouldn’t disclose what company or who made the other offer but confirmed it wasn’t a company interested in creating a downtown spa — the type of business the city banned with a temporary moratorium over the summer.
“My belief is that had we not acted on this, we would have been looking on the empty lot or a blighted lot for the next 10 to 12 years,” he said.
Ferrell said “it took us quite some time” to have that serious conversation about the property because it has a “key strategic value to the city.”
“I take my responsibility seriously about being a steward of tax payer dollars,” he said, “and what is the best interest for the 92,000 who live here and I strongly believe this investment is going to pay great dividends to the citizens of the community for years to come.”
The Council is expected to vote on the project’s funds at the regular City Council meeting at 7 p.m. Nov. 18. Details on what the site will look like have not been solidified and there will be more time for public input in the coming months.
