South King Fire sells surplus property for $21.5M

Property sold to Portland-based property management company; sale funds will be used for seismic retrofitting of Station 62.

South King Fire and Rescue (SKFR) recently sold 19.05 acres of surplus property in Federal Way to a Portland-based property management company for $21.5 million, according to the department.

The “320th Property” is located along South 320th Street on the east side of I-5 near Station 64. It was sold for $21.5 million to Mill Creek Residential Trust on Dec. 9, as approved by the SKFR Board of Fire Commissioners.

“The property was something we simply didn’t need,” said Fire Chief Dave Mataftin on Jan. 4. The 320th property was initially purchased by South King Fire for $4.7 million in 2010.

The property purchasers, Mill Creek Residential Trust, specialize in the investment, development, construction, and operation of rental communities, according to the company. Mill Creek Residential owns apartment buildings across the country, including several in Seattle, Redmond, Lacey and Everett. The Mirror has reached out to Mill Creek Residential for comment.

The department hoped to build a new multi-purpose Fire District Campus on the 320th plot to house a new administration headquarters, fleet and facilities division, training sites and more.

But “the economic conditions have not supported development of a project of this scope and size,” according to a news release from the department. SKFR estimates the campus project would have cost upwards of $80-100 million to complete, “which is no longer realistic, affordable, or necessary.”

Securing funds for the campus would’ve likely required the department to seek a bond approved by voters and Mataftin said while cost was certainly an issue, they “didn’t want to encumber the citizens with that.”

Instead, plans shifted about four years ago.

The department purchased a separate property — deemed Station 60 — at the corner of Pacific Highway South and South 352nd Street which now houses its fleet and maintenance facilities, and logistics division. In addition, SKFR joined the South King County Training Consortium in 2019, which created a large pool of local fire departments to streamline regional training at various sites.

Even before then, voters approved a $39 million Safety and Improvement Bond in 2015. These funds have allowed the department to renovate every station with seismic retrofitting, except Station 62 (current administration headquarters) and Station 68 (currently used as a training facility).

“We’ve expensed the bond to almost zero with stations 62 and 68 still needing retrofitting,” Mataftin said. “There’s no money in the budget to do so.” He said the main concern is to make sure crews are protected.

Because of this financial and safety predicament, the decision was made to sell the surplus property. And the price tag of $21.5-million helps find several routes to a solution.

“I was pleasantly surprised,” Mataftin said of the sale price. “It’s also a really large [area] of land in Federal Way, there’s just not 20 acres of property to be found in Federal Way anymore.”

SKFR expects to receive full payment for the property by in the first half of 2024. These funds will pay for seismic retrofitting and facility modernization the final two buildings, with Station 62 taking priority.

However, the department cannot expand the building’s size, so all renovations will be done internally. This still poses a problem.

“We are bursting at the seams, we’re running out of room,” Mataftin said.

Department officials are planning what the next phase of renovations will look like, along with how employees will be impacted. Drawing from past station renovation experience, Station 62 crews will likely be relocated to Station 68 once renovations begin, but this should not impact response times or service to calls, the fire chief said.

Plans about the future of Station 68 or the relocation of SKFR’s administration division have not been finalized.

As for a timeline, Mataftin expects the design and permitting phase to take approximately a year beginning in early 2024 before any construction starts.