In an unexpected move, at least to some, the owners of Northgate Mall have put the shopping centerıs south parking lot up for sale, and are seeking bids starting at $24.5 million.

While it remains to be seen whether a buyer will step forward, it seems the Indianapolis-based developer is having serious second-thoughts about proceeding with its controversial plan to build a mixed-use project on the 12.5-acre site that would include a multi-screen movie theater, hotel, office building, shops and multi-family housing.

For nearly two years now, Simon has been embroiled in a court battle against two Northgate-area community groups ‹ the Thornton Creek Legal Defense Fund and Citizens for a Liveable Northgate ‹ who oppose the project for a number of reasons, including the developerıs unwillingness to daylight a portion of Thornton Creek that currently flows through an underground culvert beneath the paved south lot site.

With little hope for a resolution to the legal conflict any time soon, Simon has apparently decided to cut its losses. If it can.

³Within the past two months, they (Simon) made the decision to sell it,² said Don Moody, a real estate broker with CB Richard Ellis, one of two brokers who are marketing the Northgate south lot to prospective buyers on behalf of the developer. The other broker is Stanley Kravitz, also of CB.

When asked why Simon wants to sell the south lot, Moody said ³I think theyıd reached the point where theyıd put enough money into the site that it was time to move on to other projects that would probably be easier to develop.²

Simonıs frustrations of having to deal with opposition from community activists may not be the only reason for its decision to bail out of its plans for Northgateıs south lot. Even if it got a permit tomorrow to proceed with the project, finding a movie theater chain willing to sign on could prove more difficult that previously thought. In recent months, several of the nationıs biggest movie theater operators have either filed for bankruptcy ‹ United Artists Theatre Co. ‹ or are teetering near bankruptcy ‹ Loews Cineplex Entertainment Corp. and General Cinema Theaters Inc. and Regal Cinemas to name a few. On Aug. 25, Bloomberg News listed Simon Property Group ‹ the nationıs largest mall owner ‹ among the companies that could lose some of its movie theater tenants as a result.

³Iım sure that was a factor in (Simonıs) decision,² said Moody of the downturn in the movie theater business. ³The market has changed considerably since the (Northgate south lot) project was started.²

If a buyer isnıt found, Simon may opt to resume its efforts to develop the site, said Moody, however, he said a time table has not been set for making that decision.

Moody said Simon would prefer to sell the entire south lot as a single parcel, but isnıt ruling out the possibility of dividing it into smaller parcels to sell to multiple parties. He added that the plan is to approach potential local buyers before attempting to market the property to out-of-state buyers. Marketing the site ³would not be limited to local developers, but that is a logical place to start: with people who understand the area,² Moody said.

Moody said the site should prove attractive to developers because of its ³great location.² ³Itıs like they say in real estate: itıs the location, location, location,² he said. ³Itıs got good transit connections, itıs very close in (to downtown Seattle) and itıs an area where people are attracted to both retail and office uses.²

When asked if a new owner would be bound to carry out Simonıs plans for the south lot, Moody said while the property is being marketed as a mixed-use site, thereıs a ³possibility that they wouldnıt do the same thing that Simon proposed to do.²

He acknowledged that the litigation surrounding the site presents a challenge for potential buyers, but added: ³I think almost any site in the immediate Seattle area is a challenge. This one is probably no more or less a challenge than any other site.²

Community activists involved in battling Simonıs plans offered mixed reactions to the news of the developerıs decision to try to sell the south lot site.

³I donıt know what to think,² said Haller Lake community activist Sue Geving, who was involved in the initial court battle against Simon, but has since withdrawn from ongoing litigation. ³You never know if itıs going to be something better or something worse. I wouldnıt necessarily say itıs a good thing that the developer is selling. They could sell it to someone with a plan thatıs even less appealing, less pedestrian-friendly.²

Jan Brucker of Citizens for a Liveable Northgate, applauded Simonıs decision to offer the site for sale. ³I think itıs great. It provides a real exciting opportunity for citizens, the City, the County and South Transit to work together to make the Northgate Area Comprehensive Planıs vision come alive.²

Brucker added that City Councilman Richard Conlin has told her group that ³no issues are off the table; that we can explore everything² regarding citizensı various proposals on what to do with the south lot site.

Janet Way of the Thornton Creek Legal Defense Fund said Simonıs decision is ³pretty remarkable,² but added itıs too early to tell the developerıs true motive. ³Simon may be just testing the waters or calling the Cityıs bluff or they may be cashing in the chips, which, in my opinion, would be the smart thing to do.²

Way expressed her personal hope that the City can step in to buy the property, which could then be used for a myriad of purposes: affordable multi-family housing, a community park, the proposed Northgate branch library and community center, parking for Sound Transitıs proposed light rail station, a water detention pond that could alleviate downstream flooding problems, ³and then, of course, daylighting the creek, which for us is the crown jewel.²

Bob Vreeland, also with the Thornton Creek Legal Defense Fund, was more guarded in reacting to the news. ³At this point, the supposed sale doesnıt mean anything to us. We havenıt heard from Simon or from the City saying theyıve dropped the (court) case. Weıre proceeding (with pursuing legal action) as before.²

Vreeland added that he isnıt convinced that Simon is ready to throw in the towel on its proposed south lot project. ³I think Simonıs just shopping around. Theyıre fishing to see if the City is willing to buy it from them or if, who knows, maybe they can find another developer dumb enough to fall off the turnip truck.²

Dorothy Douglas of the Victory Heights chapter of PONDERS (Protect Our Neighborhoodsı Design, Environment, Rural feeling and Streams), a group that up until recently was also a participant in the lawsuits seeking to block Simonıs project, said she is ³delighted Simon is selling,² adding that ³I hope the City will purchase the 12 acres and turn it into a park, a Œdaylightedı stream with restored wetland functions and natural plantings for aesthetic as well as detention and pollution scrubbing functions.²

Douglas, whose group is currently involved in spearheading a grassroots campaign to urge the City to convert the south lot site into a community park, reiterated her belief that the property would be ³the appropriate place for the library and community center,² as well as multi-family housing.

Knoll Lowney, an attorney with the Seattle law firm Smith and Lowney, which has been hired to represent the Thornton Creek Legal Defense Fund, said Simonıs decision to put the south lot up for sale isnıt expected to affect the ongoing court cases involving Simon, the City, TCLDF and CFLN. In January, State Superior Court Judge Steven Scott is scheduled to preside over a trail to determine the status of Simonıs revised general development plan for the south lot. ³We already know weıve won this case,² said Lowney, referring to Scottıs May 18 decision to require the developer to conduct a new environmental impact statement regarding its proposed mixed-use project. ³Weıre just not sure of the full scope of the win.² A court date has not yet been set for the second case, which involves separate appeals filed both by Simon and by TCLDF and CFLN regarding Scottıs May 18 ruling. Simon wants Scottıs decision to be overturned, while TCLDF and CFLN wants Scottıs ruling to be expanded to include requiring the developer to consider downstream impacts to development on the south lot as well.

Regarding a possible purchase of the south lot by the City, Lowney believes the City could buy it for less than Simonıs $24.5 million asking price. ³From what weıve heard, that figure is an inflated asking price,² he said. ³Ultimately if the City decides to move forward they will only pay fair market value, either through negotiation or condemnation.² He added that he understands that the City is currently doing an appraisal of the property to determine its true market value. Denna Cline, director of the Cityıs Strategic Planning Office, said Simonıs decision to offer the south lot property for sale is a ³really good opportunity,² but noted that $24.5 million would be a pretty hefty price tag ‹ albeit not necessarily out of the question.

She added, however, that it would be premature to say whether the City would buy the site, even if it could. The City must first decide what would be the best site or sites for its proposed Northgate area branch library, community center and community park, and itıs not a given that the south lot would be that preferred site. Other possibilities include the Northgate North Park and Ride Lot, and the Bon Tire Store site, to name just a couple.

³Everything IS on the table and worth looking into,² she said, echoing Conlinıs comments. ³If it could happen (the possibility of buying the south lot), what would it cost and what are the tradeoffs?²

The City is teaming up with King County and Sound Transit to hold a three-day community workshop Oct. 26-28 titled ³Northgate 2000 and Beyond.² The purpose of the workshop is to seek recommendations from Northgate area residents on developing a coordinated strategy for public investments in their community ‹ i.e., where to locate the proposed library, community center, community park and light rail station. The workshop will be held at Calvary Temple in the Roosevelt neighborhood. For more details about the workshop, including the times for the meetings, call Deidre Grace of the Cityıs Department of Neighborhoods at 206-684-8896.