BELLINGHAM - At its Monday, Dec. 5, meeting, Bellingham City Council will be asked to approve the sale of a city-owned parking lot at 1100 Cornwall Ave. for a price more than 30 percent less than what the city paid for it three years ago.
The transaction will be discussed at a 2:25 p.m. committee session and could come up for a vote at the 7 p.m. regular meeting, both in council chambers at City Hall, 210 Lottie St.
According to calculations by Jim Long, executive director of the Bellingham Public Development Authority, the city would eventually make up the difference via taxes and development fees that would be collected once the 0.7-acre property goes back on the tax rolls.
Catholic Community Services, owner of the adjoining Kateri Court and Washington Grocery buildings to the east, is prepared to pay $1.18 million for the parcel and commit to redeveloping it into housing and parking in a first phase, with an eventual second phase that could include office and retail space and additional parking.
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If proceeds from the sale are returned to the development authority, they could be used to develop parking at more centrally located sites that could serve downtown, Old Town and a redeveloping waterfront, Long said.
Catholic Community Services' plans for the property will come into sharper focus in the months ahead, assuming the council OKs the deal, Long said. But he hopes that once redevelopment is complete, the site could provide more than the 62 parking spaces that are there now.
Tentative plans call for both ground-level and underground parking at the site.
Asked if the site could have been redeveloped without the city's investment, Long declined to speculate. He said the city's involvement has enabled the city to make sure the property will be developed in a way that meets city goals to create affordable housing and parking in the central city.
If the new owner can't get the project under way in 18 months, the city has the option to buy it back at a similar price, Long added.
"What we have now is a fairly predictable project that will be under way in a predictable time," he said.
He estimated that Catholic Community Services would invest $15 million to $20 million for the project.
The history of the property reflects the dizzying plunge in the price of commercial real estate, a plunge that has been the undoing of both banks and developers.
In late 2008, before Long arrived in Bellingham to head the newly created development authority, the council unanimously approved buying the property for $1.53 million, using money from the city's parking fund. The seller was Bank of the Pacific. The plan was to build a city parking garage on the site, eventually.
The bank had taken over the property after foreclosing on a developer who had planned a 15-story condo development on the site before the real estate bust.
The price the city paid in 2008 was said to be a bargain based on the most recent appraisal of $1.7 million at that time. Now, Long's report to the council says the $1.18 million sale price matches the fair market value in a July, 2011, appraisal commissioned by the development authority.