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Possible buyer found for Northgate south lot


The Northgate area may soon have something in common with the "Center of the Universe":

Security Properties Inc., a Seattle-based real estate development company that is getting ready to build a large housing/retail project in Fremont, the neighborhood known by its residents as the "Center of the Universe," has recently signed a letter of intent to take an option on purchasing the Northgate Mall's 12.5-acre south parking lot.

For more than two years now, the south lot has been the focal point of a legal battle between Northgate Mall's owner, Indianapolis-based Simon Property Group, which has been seeking clearance from the City to build a mixed-use complex on the lot that would include a multi-screen movie theater, hotel, offices, housing and retail, and two community groups that oppose those plans: Citizens for a Liveable Northgate and the Thornton Creek Legal Defense Fund.

The protracted legal battle, which has caused Simon to delay its plans to expand Northgate Mall, prompted the mall owner to put the south lot site on the selling block last fall, listing an asking price of $25 million.

John Marasco, a senior vice president with Security Properties, said his company's agreement with Simon includes a confidentiality clause that prohibits them from disclosing the actual terms of the proposed property sale, but said his company's offer is "in that ballpark" of the asking price.

Marasco added that Security Properties was one of several bidders for the site. "Intracorp (a developer that specializes in housing projects) and Home Depot were among them and I'm pretty sure they (Simon) had two other offers," he said. He added that his company wasn't necessarily the highest bidder for the property.

"I think they (Simon) based their decision (on who to sell the south lot to) on who they felt had the best chance of working with the community," Marasco said.

Security Properties is primarily a developer and manager of housing projects. Marasco said his company currently owns 26,000 apartments in 39 states, only a few of which are located in the Puget Sound area. The company currently owns a senior housing project in Tacoma called Commencement Terrace and developed, but no longer owns, two housing projects in downtown Seattle: Security House and Alaska House. Security Properties was established in 1969 by owner Paul Pfleger, who is no longer involved in the day-to-day operation of the company, Marasco said. That role is now held by CEO John Oreheck. Tom Curran is the company's president.

Marasco said his company's interest in the Northgate south lot is to build an urban village project that would be primarily multi-family housing, along with some retail and office space. He said the emphasis on housing is the opposite of Simon's plans, which focused more on the retail and office components. He also said it was unlikely that Security Properties would want to build a large movie theater complex as Simon had been proposing.

Marasco said his company will be spending the next couple of months "looking for any potential showstoppers that might halt the project," which he explained could be something like finding out that the property was used as a toxic waste site.

"We will also seek to determine whether or not we can get some sort of consensus from the community groups so we can feel we won't be in litigation for the rest of our lives," he added.

Marasco said his company is interested in meeting with representatives of the Northgate area community groups to listen to their concerns. Security Properties would also like to form a citizens advisory group that could meet regularly with the developer to get their feedback on its proposed plans for the south lot.

It's a strategy that has worked well for Security Properties in Fremont, where it recently forged a settlement with the Fremont Neighborhood Council, a citizens group that had previously opposed the developer's proposed Block 40 housing/retail project in their community.

With regards to the Northgate south lot site, the community groups have made it clear that one of their key concerns is the issue of what to do about the stretch of Thornton Creek, which currently runs through the site in an underground culvert. The community groups want the creek daylighted, from 5th Avenue NE, the eastern border of the property, clear through to 1st Avenue NE, the western border, because they say it is crucial to efforts to restore local salmon runs.

When asked about the subject, Marasco said "We know it's a sensitive issue and one we'll have to address. It will be one of the first things we will get on top of."

Marasco said while his company will definitely have a proposal as to how to deal with the Thornton Creek issue, he added, "it's too early for us to comment on specifics. There are engineering issues that need to be addressed first. We have to get an understanding of what does that (daylighting) mean?"

He said his company will also address the need for stormwater detention, which currently does not exist on the completely paved south lot site.

TCLDF member Bob Vreeland said his group has no particular reaction at this time to the news of Security Properties' interest in purchasing the south lot site, but said that Marasco's suggestion that his company is interested in listening to his group's concerns is "certainly more hopeful than anything we've ever heard from Simon, that's for sure."

Janet Way, who also belongs to TCLDF, expressed hope that "we can all win if we play our cards right here ... and I certainly do respect their (Security Properties) need to make a project."

But she added that her group won't settle for anything less than a full daylighting of Thornton Creek throughout the south lot site. "It's not OK to have a 'water feature' on private property. That is not an acceptable solution," she said.

In the next 60 days, Security Properties wants to develop a rough conceptual plan for the site which would include how much housing, retail and office space the project would have, as well as a preliminary configuration. "It will represent what we think we need to develop ... to make it an economically viable project," Marasco said.

Marasco said if his company can gain the support of the community, he expects to gain the City's approval for the project within 12-18 months. The company would be prepared to begin construction within 4-6 months of receiving the City's approval. He added that his company is confident that it would be able to secure the necessary financing to proceed with the project, barring a significant deterioration of the economy.

Should Security Properties decide to back out of the project, Marasco said it's likely that Simon would opt to keep the south lot and keep it as it is for the time being while seeking City approval to proceed with plans to expand its main Northgate Mall property.

Representatives of Security Properties are scheduled to speak at a special noon luncheon meeting of the Northgate Chamber of Commerce on Friday, April 27, in the downstairs meeting room of Northaven Retirement Apartments, 11045 8th Ave. NE. The cost of the luncheon is $10, which includes a buffet lunch. The public is invited to attend. To reserve a seat, call the chamber at 695-4141.

For more information about Security Properties, contact spokeswoman Jeanne Muir at 547-1008. For more information about the Thornton Creek Legal Defense Fund, call Bob Vreeland at 522-5919. Jan Brucker of Citizens for a Liveable Northgate can be reached at 526-5342. (