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SEATTLE-Instead of scaling back a $200-million mixed-use development in Seattle’s South Lake Union neighborhood, Vulcan Inc. and Milliken Development Co. are considering a high-end boutique hotel tower where an office tower was to go.

Originally, the 2.5-acre site at the intersection of Denny Way and Westlake Avenue North have a 238,000-sf office tower and two residential towers containing 237 luxury condominiums encircling 90,000 sf of retail space anchored by a 48,000-sf QFC grocery store. That was December 2000, however, when the office market was still healthy.

Under the proposed redesign, Don Milliken tells GlobeSt.com say the project would look much the same, except a skinnier hotel tower would replace the planned office tower and part of one condo tower that stuck out over a portion of the two-level retail entrance to the property would become 30,000 sf of office space–the only office space now planned for the project. As well, where the office tower stuck out over the other side of the retail entrance to the development, a health club and spa would be added.

“While the office decline cost us time and money having to redo that portion of our development, we are actually ending up with a far superior development in a number of ways,” says Milliken. “The inclusion of a five-star hotel and a day spa would dramatically improve the project’s ambiance, provide a nice amenity for the emerging South Lake Union Neighborhood and, because the hotel tower is skinnier than the office tower, substantially improve the view corridors for residents of the condominium towers.”

Milliken stresses that the proposed redesign must still be signed off on by Vulcan Inc., the majority partner in the project. “We have to prove to them that it makes sense financially,” says Milliken, who hopes to break ground for the project this fall and complete it by the end of 2005.

The property is one of some 25 city blocks in the South lake Union area that Billionaire Paul Allen’s Vulcan Inc. has acquired over the past five years at a cost of $200 million. Vulcan Spokesman Michael Nank acknowledged that a redesign of the Westlake and Denny development is in the works, but declined to comment on specifics.

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