OLYMPIA - The downtown isthmus property where developer Tri Vo has proposed adding five- and seven-story condo buildings is in foreclosure, casting further doubt on the project's future.
The land, at 505 and 529 Fourth Ave. W., is scheduled to be sold at auction March 18, according to a public notice filed Dec. 3.
First-Citizens Bank & Trust Co. is foreclosing on the properties, which are held under the name Capitol Shores Investments LLC.
Capitol Shores is in default and owes the bank more than $2.48 million in payments, late fees and interest, according to the filing. The company has until March 7 to pay or the auction will proceed.
Vo and Jeanette Dickison, who were managing the project, did not return phone calls seeking comment.
There are two properties in question. Capitol Shores bought the parcel at 505 Fourth Ave. W. from the Housing Authority of Thurston County for $1.95 million in 2008. Capitol Shores bought the parcel at 529 Fourth Ave. W. from Capitol Center LLC for $1.285 million in 2003.
Capitol Shores secured loans from Venture Bank, a locally based bank that failed in 2009. The Federal Deposit Insurance Corp. sold the bank to First-Citizens Bank & Trust Co. of Raleigh, N.C., which assumed the loans.
The foreclosure is the latest development in a three-year saga over the future of the isthmus. It began when Vo’s company asked the Olympia City Council to raise building-height limits on the isthmus to allow for structures as tall as 90 feet. That would have accommodated Vo’s Larida Passage proposal, which would have included 141 high-end condominiums, offices, retail space and parking.
After a year of divisive community debate, the council voted to raise height limits in 2008.
Supporters said it would provide a much-needed jolt to the prosperity of downtown. Opponents said the buildings would block important views of Budd Inlet and the Olympic Mountains.
Opponents helped elect a majority of council members in 2009 who favored dropping the height limits. The council voted in January to reduce building heights to 35 feet, and voted on first reading Tuesday to make the change permanent. A final vote is scheduled for next Tuesday.
Vo’s company maintains that Larida Passage is vested under the 90-foot height limits and can proceed. The application for the proposal is active, according to Keith Stahley, director of Community Planning and Development for the city. He said the city’s hearing examiner might determine next year whether it is considered vested.
But by then, Capitol Shores LLC may no longer own the properties. Stahley said a new owner may continue the proposal, because “our development process is not vested with an individual.”
Capitol Shores’ potential loss is a potential gain for a group of residents who want the area to become a park.
“If in fact it stays in foreclosure, it may present an opportunity to work out a sale either with the owner or ultimately with the bank,” said Gerald Reilly, chairman of the Olympia Capitol Park Foundation.
Reilly, who opposed raising height limits, said his group might participate in the auction if it’s held.
It’s unclear where the money would come from to pay for a park, though. Reilly said the group has raised $100,000 in pledges and contributions. Asked if he would turn to the City of Olympia, he said, “If the city were interested in our foundation being a partner with them, we would certainly be very open and cooperative.”
But “the city has its own set of financial challenges right now that they have to look at this in the context of all of the other financial obligations that they’re facing.”
Mayor Doug Mah said the city could be one of several entities that could buy the land. But he pointed out that an isthmus park is not funded in the parks plan. The plan calls for a public-private partnership.
“There’s a good potential that the city would be a participant assuming a coalition of partnership comes together that addresses the cost and scheduling issues,” he said.
Matt Batcheldor: 360-704-6869 email@example.com