More Town Center housing ahead?
November 24, 2008 · Updated 4:25 PM
The housing and construction boom in the Town Center will not be over anytime soon.
Just northwest of Mercerdale Park are two single-family houses on a hillside stacked with condominiums and apartments. The properties, 2960 and 2970 76th Ave. S.E., are behind Farmers New World Life Insurance Company. They nudge Mercerdale hillside to the south. The Mercerdale Condos, Monaco Villa, Islandaire and Montesano apartments are all on that same block. Both properties contain weathered old houses. Both are also hard to see from the roadside because of the steep slope and tall trees on the landscape.
But one Island developer saw the aging structures and properties as an opportunity to build a new multi-family structure. The weed-covered lots have seen a lot of action in county land rolls over the last two years.
In 2005 Island resident Eric Beckes, the owner of Beckes Construction, applied for permits to rezone the two properties as one. By the end of the year he had paid $5,775 for three permits for the rezoning, according to city records. County records show that on Jan. 10, 2006, Beckes and Kathy Wangen purchased the 2970 property for $550,000 from Renwick Haugland. The following day they bought the 2960 property next door from Nicola Hohn for $1.1 million. On May 1, the rezone was complete.
Now, the property is listed for sale for $4.4 million. According to Tim Conway, Beckes’ agent with John L. Scott Real Estate, the property is ideal for the construction of a 44-unit multi-family development. According to city code, 38 units per acre are allowed. With the two parcels combined, the new property is approximately 1.18 acres. With condos nearby selling for around $375,000, the value of a completed structure could potentially reach $16.5 million. Construction costs will vary according to site conditions and building design.
The actual value of the land will be determined by what a buyer will pay, appraisers said.
“What matters is the amount that the property can be sold for,” said Richard Hagar, an appraiser with American Home Appraisals on Mercer Island.
“It’s a multi-year process so (the owners) will be looking four to five years out (to build) and asking: ‘How much will the property be worth then?’ They’re looking into the future, if you will,” Hagar said. “To determine the asking price they’ll look at everything that has sold recently. Obviously, the most recent sales the better, but they’ll look at every sale of nearby land, even for large scale projects like the JCC.”
According to Carol Hinderstein of Coldwell Banker Bain Associate the asking price of the property depends on the sales of other properties as well as several other factors.
“The appraiser will come in and look to see how many units can sell and for what price. That makes a land value per unit and what they want to know is how much profit is the builder going to make at the end of the day. But determining the value for this amount of units is real difficult.”
After a sale is finalized, permits approved and development begins on the property, the city may want some additional infrastructure included. According to city engineer Patrick Yamashita, he would speculate that such a project in that area would
More than 800 condominiums or apartments have either been completed over the past two years or are under construction in the Town Center.
The Union 76 station at the bottom of the S.E. 24th Street hill at 76th Avenue S.E. has been boarded up and surrounded by a chain-link fence since Halloween.
There is no word on what will become of the property. The city said no permits had been applied for and the station’s distributor isn’t talking.
In December 2005, Suncor Holdings Inc., a fuel distributor, purchased the property from Conoco Philips for over $800,000. But just three years before, in February 2002, the Tosco Corporation bought the station from the Pazis Association for a price of $1.2 million. In 2001, the merger of Tosco and Conoco Philips created a company that would be the second largest refiner and third largest U.S. seller of gasoline.
The station was built in 1958 along Sunset Highway, as were several other gas stations in the area. The Chevron station located on the corner of Sunset and 77th Avenue S.E. is set to be demolished for the new construction of the 7800 building later this year.