The original building permits expired due to 180 days of inactivity. With the new permits, Lend Lease now has one year to restart construction of the 1.4-million-sf mixed-use project and three years to complete the $360-million endeavor, a city planning official tells GlobeSt.com.

Construction of a two-tower office, hotel and condo development began in 2000. When Lend Lease halted construction last August because of the economic downturn, company officials said the company would redesign the project to be completed in stages rather than all at once as originally planned. In October, knowing it wouldn't likely restart construction in time, the company applied for new building permits that would have the project built in three phases rather than all at once as originally permitted.

The first phase is the 41-story hotel and condo tower, which includes a very small portion of the 333,000-sf retail portion of the project. Also included in the first phase is tenant improvement work for the project's 2,100-slip parking garage, which is largely complete. The second phase is the retail portion of the project. The third phase is the 27-story office tower, which given the current office market may be several years in the making.

In January, ArcLight Cinema Company and Lend Lease terminated a lease agreement for an 86,000-sf movie theater that was to anchor the retail portion of the project, leaving a bank branch as the lone signed tenant for the project, located across from Bellevue Square and considered one of the largest mixed-use construction projects in the nation.

According to the documents filed with the King County Recorder's Office, the movie theater terminated a 20-year pre-lease agreement with four five-year extension options for the ground and mezzanine levels of the retail piece. In 2001, when the project was in full swing, Drugstore.com worked out a deal to terminate its 90,000-sf pre-lease there after deciding it would no need the space.

Local real estate sources say Lend Lease in October began hunting for equity investors in that would provide more than $52 million in equity to revive the project. No such deal has been announced.

Lincoln Square was one of three major projects in Bellevue to get caught in the economic downdraft.

The $108 million, 20-story Bellevue Technology Tower was to rise on the corner of Northeast Fourth Street and 108th Avenue Northeast. At one point, the 377,000-sf project was 60% leased, but work stopped shortly after the underground parking garage was complete. Then owner, Eugene Horbach fought with the project's former general contractor and defaulted on the loan. Horbach reportedly owed more than $27 million, including interest and penalties. In June 2002, investment advisor Washington Capital Management, which had loaned $22 million to the project, purchased the property at auction in a foreclosure sale and has mothballed the site until a market opportunity presents itself.

The third major development to stall is The Summit, a would-have-been three-building, 875,000-sf office project in Downtown Bellevue. The first phase of the $250-million project was originally planned as two buildings totaling 530,000 sf. But after the 13-story, 286,000-sf Building B was completed, the second building was capped at three stories due to the depressed office market.

Instant Insights /

Lincoln Square Developer Issued Revised Building Permits

Related Stories

Recommended For You