A Kirkland, Wash., investment and development firm has submitted the winning bid for Metropolitan Mortgage & Securities Co.’s 77-acre Summit property on the Spokane River just north of downtown.
Matt Aatai, managing partner of Seawest Investment Associates LLC, said his company’s plan is to develop some of the property and sell some of it. He declined to disclose his offer, but Metropolitan’s chief financial officer and the listing broker who handled the sale implied the offer equaled or exceeded what the bankrupt Metropolitan owes on the property.
Slightly more than $10 million remains on that note, held by Western United Life Assurance Co.
“It will make the lien holder whole, but I don’t anticipate there will be much residual left over,” said Maggie Lyons, Metropolitan’s CFO. “Right now, I think it’s absolutely the best offer we could have. The benefit to the creditors is we don’t anticipate a deficiency.”
The deal is contingent on Aatai’s company conducting due diligence on the site to determine a development plan. The sale is scheduled to close in February.
Aatai said he hasn’t determined precisely what will be done with the land. He also is president of Atcon Construction Co., of Kirkland, and said he has 25 years of development experience, building residential and commercial projects.
“We obviously have looked at it and based on what we can see there, we feel like it’s a do-able project,” Aatai said. “Now we’re going to confirm that.”
However, the president of Nitze-Stagen and Co., of Seattle, which spent two years working with Metropolitan to develop the property before the bankruptcy ensued, suggested the deal was unlikely to close.
“Given that we have spent more time and money over the last two years on Summit than anyone else and can’t come close to what they offered for the property, they must be magicians or have a rabbit in their hat,” Kevin Daniels wrote in an e-mail. “If they close, (Daniels’ emphasis) this is certainly a great price for the creditors and the mortgage holder.”
Many of Metropolitan’s properties, including the Summit parcel, the Metropolitan Performing Arts Center in downtown Spokane and the Metropolitan Financial Center, are being sold in an effort to liquidate assets and pay off creditors. More than 16,000 people had $580 million invested in Metropolitan. Most were elderly residents of the Inland Northwest. The company’s most recent estimate for the potential return on their investment is about 15 cents on the dollar.
Prior to the bankruptcy filing, Nitze-Stagen and Metropolitan had announced plans to build 1,500 housing units and 780,000 square feet of commercial and retail space on the Spokane River property. It was proposed as a “New Urbanism” village that would mix lofts, high-end condominiums and apartment buildings in a neighborhood where people would live, work and play. The project had the support of Mayor Jim West and a West Central neighborhood association.
The language Aatai used to describe the property implied that a similar vision was being considered.
“It has a potential for being able to create a real urban village that would be used by people who work in downtown and also people who want to be close to other activities,” Aatai said. “There are some other community needs that would possibly dictate what else goes there.”
Metropolitan’s development agreement with Nitze-Stagen was scuttled when the bankrupt company could not make a $1.5 million payment needed for environmental cleanup of the former railroad site.