HomeMy WebLinkAbout_Nicholson Declaration1
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BEFORE THE HEARING EXAMINER
FOR THE CITY OF RENTI ON
In the Matter of:
j SOLERA MASTER PLAN,
A Master 11lan, Preliminary Plat, Conditional
Use and Street Modification Deci 9 sion
I, Kerry L. Nicholson, declare:
LUAw-18-000490, SAmM,, PP, CUawHl., MOD
DECLARATION OF KERRY L.
NICHOLSON
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1. I am Senior Managing Director for Legacy Partners, a privatelyawheld real estate
� firm that awns, develops, and manages multi -family communities throughout the United States. I
� am competent to make this declarafton based on my professional knowledge.
2. I have been an active participant in the Pacific Northwest real estate market since
� 1978.. Prieor to joining Legacy Partners in 1999, I financed the commercial real estate industry for
� over 20 years, holding various sen4b 4,
ior management positions with GE Capital Real Estate, Bank of
� America and Wells Fargo. During tifistime,I made loan and equity commitments in excess of $2
I b4b
illion.
3. Legacy Partners is based in CaliCalifornia,with regional offices in Dallas, Denver
Irvine, Seattle, and Orlando... I direct Legacy's activities i*n the Pacific Northwest,.
McCullough Hill Leary.
701 Fifth Avenue,, Suite 6600
PS
I DECLARATION OF KERRY L. NICHOLSON — 1 of 3
Seattle, Washington 98104
206*812*3388
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4.9 I am familiar with Quadrant Corporation's "Solera Project," a phased, mixed -use
project in the Sunset Highlands area of the City of Renton along NE Sunset Blvd. I have had
numerous discussions with Bonnie Geers, Quadrant's Sr. VP of Community Development, and'
Pete Nichols, VP of Acquisition, related. to partnering with Quadrant to develop the mixed -use
I component of Solera.
5.0 It i*s clear to me that Quadrant is committed to the success of Solera's mixed -use
blocks and highly motivated to identify a partner who will develop ahigh-quality mixed -use
project on schedule.
6.6 I understand that the Ci'ty's Hearing Examiner has approved the Solera Project, but
the City has recommended a condition preventing Quadrant from initiating construction on the
ownhome component of the project until the mixed -use building concrete podium is completed
and passed inspection. I understand the intent behind this condition, but its application will
jeopardize the success of this project. Construction of the podium is a complex and lengthy phase
of construction, which will likely take 6 — 8 months to complete. And the City's inspection
timelines are outside Quadrant's control. The mixed -use developer cannot be successful i*f its
residential partner is prevented from initiating and pursuing construction of the residential
component. The mixed -use and residential construction timelines should be coordinated, so that
46 C�ons'itruetion costs and impacts can be minimized and efficiencies can be achieved.,
7.9 Alternatively, the City has offered that in lieu of completing the concrete podium,
ownhome construction can begin when shoring walls and foundation excavation are completed
for the mixed -muse building, along with a receipt of a cash set aside, letter of credit, or assignment
of finds approved by the city for the entire cost of the mixed -use building. The City has not of'_.ered
a bonding alternative, which in my experience would be typical and reasonable in this situation.
McCullough Hill Learv.1 PS
701 Fifth avenue, Suite 6600
DECLARATION OF KERRY L. NICHOLSON — 2 of 3 Seattle, Washington 98104
206-812-3388
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8. The entire cost of the mixed -use building is estimated to be $75 - $90 million
� dollars. Accordingly, a mixed -use developer would have to obtain and reserve $75 - $on million
dollars to sit in escrow or be held at the City (the mechanics of the City's proposal are not clear).
At the same time, the mixed-use developer would need to expend significant funds to construc
I the building, with this $75 - $90 million dollars not available for actual construction efforts,.
9,W It is my opinion that neither the "cash set aside" nor the "letter of credit" concepts
1 are feasible. Based on my experience,, I would not expect Legacy Partners or any other mixed -use
developer to accept this "alternative" offeredb ythe City. Even the most well -financed (or self
financed) developers in the region cannot afford to have $75 - $90 million dollars sitting in reserve
while expending funds on construction., I would expect developers who are less well -financed
would be unable to obtain such a large letter of credit from a bank.
I 0. It isalonso my opinithat the security "alternatives" proposed by the City are
unnecessary. Once a developer has fully drawn plans, bought land, paid fees and initiated
excavation and shoring activities, all out of equity, it would be ruinous not to complete the project.
In other words, construction of the mixed -muse building would be assured.
110 In my 40 years of experience in the real estate industry in the Pacific Northwest, I
have had direct involvement with hundreds of mixed -use projects in various jurisdictions. It is my
opinion that the phasing condition proposed by City in this case is highly unusual and infeasible,
and it will deter potential mixed -use developers from partnering on This project.
Executed this 18th lay of January,, 2019, at 1 VIC) � � � LAl , �"< w� �' ('
Kerry L. Nicholson
McCullough Hill Lear. PS
701 Fifth Avenue, Suite 6600
DECLARATION OF KERRY L. 11111. ilc iiiii"i 11111so 3 of 3 Seattle, Washington 98104
206.812.3388