August 12, 2004

Work to start on Tower Records site

After seven years of planning and market research, construction of a mixed-use project on Tower Record's prime Seattle site is about to begin.

The four-story project, which will have 100 condos above 75,000 square feet of retail and two levels of below-grade parking, will be built of concrete. Typically, all-concrete construction is reserved for highrises.

"I can't think of a similar building that is not either wood frame or all steel," says Dean Jones whose company Real Estate Applied Logics is marketing the condos.

The condo portion has been dubbed Lumen, named for the interplay of light and space, according to Jones. He says the finished product will be akin to a glass box.

Construction will begin in about a month and be finished by the end of 2005.

Using concrete will drive up the cost, but it will be worth it, says Alan Winningham, whose company, Landstar Real Estate LLC, is the developer.

"It was clear to us in our market research that most condo buyers did not want to live in a wood-frame building," Winningham said. "They highly valued the long-term security and quality" of a concrete building.

Due to a variety of city requirements, Winningham had plenty of time to do research.

On the Mercer and Taylor Avenue North sides of the property the developer must leave space for a pedestrian and bike path. Ten percent of the units must be set aside as affordable housing. There were design review requirements, and Landstar had to get the city to vacate an alley on the one-square-block site.

"That's why this has taken seven years," says Winningham, who says he was not frustrated by the wait. In fact, he believes the project will benefit from it.

"It is very important to obtain community input," he says. "To ignore that not only does the neighborhood a disservice but your project a disservice. My personal philosophy is to get involved and be engaged in the neighborhood and be thoughtful about what it is you're proposing."

Winningham's business partner is Gerhard Kleinschmidt, who lives in the Dallas area. Landstar, which has offices in Washington and Texas, has done build-to-suit retail projects.

Now it's branching out, working on a master-planned community in Fort Worth, Texas. In addition to Lumen, the company is working on two more mixed-use projects in the Seattle area, though Winningham declined to provide details.

500 Mercer Partners LLC — composed of Winningham, Kleinschmidt and two unnamed individuals — owns Lumen. The group paid the city $4.5 million for most of the site and $1.4 million to MTS, the parent company of Tower Records, and has taken out a first phase development loan of $4 million.

Frontier Bank and Pacific Northwest Title are the grantees, according to the deed of trust.

MTS initially wanted to build a larger store for Tower on the site, but was tripped up by the Internet music revolution. In February, MTS filed for Chapter 11.

Among the residential units will be 18 town homes. All residences will have high ceilings, some as tall as 20 feet. Lumen will have an interior courtyard with views of the Space Needle.

Hewitt Architects designed the project, and Garret Cord Werner is handling the interior design. "We will most likely be using Skanska USA" as the contractor, Winningham said.

Final pricing of the units has not been completed, but Winningham said they will range from about $200,000 to $600,000.