After years of planning and tens of millions in public investment, the city of University Place appears to have landed its first retail tenant in Town Center.
The City Council approved Monday selling property to Apple Washington LLC under the condition it build an Applebee’s restaurant at the location.
After the unanimous vote, council members took a brief recess to pop open the bubbly – sparkling apple cider – to celebrate the news with residents who attended the meeting.
Council members were indeed in a celebratory mood.
“This is the first of many steps to come,” Councilwoman Caroline Belleci said. “It’s been a long hard-fought battle, and I think we will see the Town Center plan as designed and envisioned come to fruition.”
Added Councilman Ken Grassi: “We’re going to be moving down the alphabet with a lot more excitement yet to be announced.”
Those could come soon. Interim City Manager Steve Sugg said there’s “heavy-duty negotiations” with other potential buyers, and this agreement could provide momentum to ink more deals.
Councilman Gerald Gehring said he expected high-end and lower-end restaurants will sign onto the development in the future.
“We feel very fortunate to get a restaurant that I think is a very good fit for the city,” he said.
The proposed sale price is $420,000. After paying closing costs and the broker’s commission, the city will receive in the “neighborhood of $395,000,” said City Attorney Steve Victor, who drafted the agreement. The city intends to use the proceeds to pay down its debt.
“We believe that is market correct based on a study of comparables – in fact, it may even be better than market correct,” he said.
The city’s only obligation under the agreement is to extend a natural gas line to the property, Victor said.
Closing of the sale is scheduled to occur within 20 day of the latter of two conditions: buyer receiving permits and approvals, and the substantial completion of the city’s work to extend the gas line.
Once the sale is closed, the buyer will be obligated to commence construction within six months.
Victor said the restaurant will be open by the fall of 2011, at the latest.
He noted the restaurant will be an updated model, with a brick façade, updated awnings and lighting and a planned outdoor seating. It will feature a larger space, with indoor seating of about 200 patrons.
The restaurant will be located on the southern half of Lot 4, which is along Bridgeport Way and next to the market square.
The city has borrowed more than $40 million to begin development of Town Center as an inducement to attract private investment. The goal of the development is threefold: grow the city’s sales tax base, absorb future growth and provide residents a gathering place.
The city originally planned to complete the Town Center project in 2006, but its opening has been delayed repeatedly. The city has worked with four potential developers to bring private investment and retail tenants to the project, but the partnerships ended for various reasons.
Changing tack, University Place officials have planned to sell off the 12 lots individually, intending to develop Town Center in a piecemeal fashion as opposed to all at once in recognition of the ailing lending and real estate markets. It has hired a broker to assist with that effort.
The proposed two-year budget that the council is revising prior to adoption doesn’t anticipate any land sales or revenue from Town Center.
Work continues on the new civic building, which will house the future City Hall and library, served by an underground three-story parking garage on the property. The library is scheduled to open Feb. 12.
Prior to the discussion and vote, Mayor Debbie Klowsowski noted there “should be a drumroll.”
Branches bouncing along the roof of City Hall from Monday night’s windstorm provided something like it throughout the night.