I didn't go into the office on Friday so I missed this article from the DJC.
From Fridays DJC.
http://www.djc.com/news/re/12065415.html
May 9, 2014
Wright Runstad's $500M plan for Rainier Square
By NAT LEVY
Journal Staff Reporter
The University of Washington Board of Regents approved two 80-year ground leases and a pre-development agreement for Wright Runstad & Co. to develop a 1.15 million-square-foot mixed-use complex on Rainier Square.
The iconic Rainier Tower would remain on the site, which is bounded by Union and University streets, and Fourth and Fifth avenues.
The new development would include a 50-story tower and a separate but connected 15-story hotel. Wright Runstad President Greg Johnson said the cost will be more than $500 million.
Plans call for 750,000 square feet of office space, 182 apartments, 30,000 square feet of street-level retail, a 198-room luxury hotel and parking for 1,200 cars. The apartments will be on the top floors, giving residents unmatched views, Johnson said.
According to project documents, the plan is to start in 2017 and finish in 2020. The latest the project could start is 2021, with completion in 2024.
But Wright Runstad wants to move faster than that. Johnson said he wants to get a master-use permit later this year and start construction in 2015. Then the building could open late 2017.
“We see a market now,” Johnson said. “There is competition out there that we want to beat. So we are going to get on it.”
Johnson said construction won't begin until Wright Runstad gets an office tenant.
NBBJ is designing the project and Magnusson Klemencic Associates is the structural engineer. Wright Runstad is interviewing several finalists for a general contractor.
Johnson said the site is the “preeminent location in Seattle.” The new buildings should bring employees, residents and hotel guests who will energize the area.
The new complex will be close to transit, walkable and near retail and restaurants, exactly the kinds of amenities residents and office workers want, Johnson said. And for hotel guests, Rainier Square is near the Washington State Convention Center and many top tourist destinations.
“If you think of the threads of energy that crisscross this city, almost every single one goes through that block or right near it,” Johnson said.
The current design shows a wide base that tapers as it rises. This was done, Johnson said, as an homage to Rainier Square's curved, thin base that widens as it rises. Lower level floorplates will be 33,000 square feet, and up high they will be 15,000 square feet.
Wright Runstad has a 60-day due diligence period, then it has two years to go through design and permitting.
Wright Runstad is putting down a $2.5 million deposit. If Wright Runstad gets its master-use permit in three years, it can get the deposit back.
According to project documents, if Wright Runstad does not submit design drawings within three years then the agreement is off.
Johnson said the deadlines and conditions of the ground leases are worth it to build a project on the prime site.
“The university wants to generate more income from the property and control its risk; we understand that,” Johnson said. “They're not going to give away this opportunity, and we have to put up some cash and meet some thresholds to keep our opportunity alive.”
Wright Runstad will pay a base rent of 8 percent of adjusted gross income on the office tower and 3 percent to 4 percent on the hotel.
Wright Runstad is no stranger to downtown high rises. It built 1111 Third Ave., Wells Fargo Center, 1201 Third Ave., 1800 Ninth Ave. and Second and Seneca, among others.
The UW reacquires full control of most of the 10-acre Metropolitan Tract (excluding the Olympic Hotel and garage sites) when Unico Properties' ground lease expires Oct. 31, and said it wants to “maximize value at this premier and underutilized city center location.”
The UW prefers the ground lease option because it protects the university from the risks of construction, financing and leasing.
Several regents said a new building would be beneficial for the block and the university. Right now UW gets $1.5 million per year from Rainier Square, and that is expected to increase to $4 million a year once the new tower is built and leased.
“I think (the new building) is going to bring density and a lot of energy to what has become a little tired part of downtown,” said Todd Timberlake, chief real estate officer at UW.
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