by Ralph Nichols

Condo sales have resumed at Burien Town Square.

The sales, which began in October, are the first since ST Residential became owner of the seven-story condominium/retail complex with 124 residential units.

They are also the first since building developer Urban Partners was forced to suspend sales in 2009 when the Federal Deposit Insurance Corp. (FDIC) shut down the bank holding their construction loan.

“Since re-launching sales at Burien Town Square in October, we are pleased to report that there have been 11 contracts executed, of which five are with buyers who previously had pre-sale contracts in place,” Peter Marino, spokesman for ST Residential, told The B-Town Blog.

“We have closed three of the 11 contracts at this point,” Marino noted.

“Throughout the country, sales traffic typically slows down during the holiday season and in the early winter months,” he continued.

“We are encouraged by the response and interest in Burien Town Square. We look forward to a strong year of sales in 2012, but we don’t anticipate sales traffic to really pick up until late winter or early spring.”

These new sales are “good news” for the city, said Burien Economic Development Manager Dan Trimble. “I think it will help move completion of the Town Square project forward.”

The second and third phases of Town Square remain undeveloped. Urban Partners owns both parcels, located north of the condo/retail complex and the Library/City Hall building.

Urban Partners has until late January to submit plans for phase two development to the city.

“The other impact” of renewed condo sales “is that merchants on 152nd and 153rd streets and elsewhere downtown will have more customers,” Trimble added.

“That was one of the intentions” for the Town Square project. Merchants and restaurants “have been very patient and hopefully they will see that pay off.”

Only six condos in the complex, which includes 20,000 square feet of still-vacant ground-floor retail space, were sold before sales were halted in 2009.

The resumption of condo sales is ST Residential’s primary focus. The investment group has yet to announce leases of retail space.

In August, David Ploger, first vice president of ST Residential, told Burien City Council members that, even with lingering uncertainties in the housing market, they hoped to have a public launch of condo sales before year’s end.

Expressing confidence at that time in the marketability of the condos, Ploger described them as “very efficient. The floor plans are state of the art. I’ve looked around and I’m not aware of a better condominium complex in the South Seattle area.”

But to help move sales, he also said then that ST Residential would respond to market conditions by lowering condo prices well below the original 2009 prices.

Construction of the Town Square complex, then owned by Urban Partners, the city’s private developer for the project, was completed in June 2009.

But that September, condo sales were halted when the FDIC closed Corus Bank, which had financed construction of the building with a $38.5 million loan.

After the FDIC seized the bank’s assets, including Urban Partners’ loan, ST Residential became holder of its residential construction loan portfolio.

ST Residential is comprised of the FDIC, which holds a 60 percent share of that portfolio, and Starwood Capital Group and four other several private investors.

Urban Partners eventually transferred ownership of the condo/retail complex – avoiding a trustee’s sale of this property, which was in foreclosure – to ST Residential. The FDIC earlier had rejected an offer by Urban Partners to buy back its construction loan.

Urban Partners has since been waiting until after ST Residential resumed condo sales to propose a development plan for phase two of the Town Square project.

Read more of our extensive coverage of Burien Town Square here.

by Ralph Nichols

Urban Partners will inform Burien by early next year about its plans for a “marketable” new development at the city’s Town Square.

Construction by Urban Partners of a second multi-use Town Square facility was to begin by mid-July – two years after the private developer’s condominium/retail complex was certified for occupancy.

Since then, however, the current recession has frozen the condo housing market – and due to circumstances beyond its control, Urban Partners no longer owns its first Town Square building.

ST Residential, which now owns the six-story building, has yet to sell a condo or lease ground-level retail space.

Urban Partners asked the city in June for an extension of time to break ground on its next Town Square project, Burien Economic Development Manager Dick Loman recently told The B-Town Blog.

After reviewing that request, the city asked Urban Partners “to provide information on what they think will be marketable,” Loman said.

“Urban Partners has agreed to supply this information to the city 45 days after the first sale closes at the Town Square condos, but no later than Jan. 21. Urban Partners will key off ST Residential because that [sale] will be a local market indicator.”

Still owned by Urban Partners for anticipated development are the vacant Town Square parcels north of the condo/retail complex and the King County Library/Burien City Hall building, and a narrow property east of the post office between S. 150th and S. 151st streets.

ST Residential is still penciling out prices for the 118 unsold Town Square condos “that are fair to us and give value to the owners,” First Vice President David Ploger told Burien City Council members Aug. 15.

Those prices are expected to be “more than 35 percent below the original prices” when the seven-story complex opened over two years ago. The new prices may be approximately $120,000 to $420,000, compared to the original $200,000 to almost $700,000.

While ST Residential “looks forward” to its public launch of condo sales, “I can’t guarantee it will happen yet this year,” Ploger told the city council at that time. No mention was made of the building’s 20,000 square feet of vacant retail space.

Just six condos were sold by Urban Partners before sales were placed on hold when the Federal Deposit Insurance Corporation (FDIC) closed Corus Bank of Chicago in September 2009.

Corus Bank had financed construction of the building with a $38.5 million loan in 2007 to Urban Partners, the city’s partner as developer of the private components of the Town Square project.

But the nation’s housing market began to collapse a year later, eight months before the condo/retail complex opened along with the library/city hall building and Town Square Park.

After the FDIC seized the bank’s assets, including Urban Partners’ loan, ST Residential became holder of its residential construction loan portfolio.

ST Residential is comprised of the FDIC, which holds a 60 percent share of that portfolio, and Starwood Capital Group and four other private investors.

Urban Partners eventually transferred ownership of the condo/retail complex to ST Residential – avoiding a trustee’s sale of this property, which was in foreclosure. The FDIC earlier had rejected an offer by Urban Partners to buy back its construction loan.

“We fully expect that once [ST Residential] gets this thing off the ground, they’re going to sell many more units than just one,” Loman continued. “There is a lot of interest in them” and the first sale should result in a “domino effect.”

In the meantime, “the city is limited in what it can do” to assist Urban Partners in moving forward, he said. Burien’s role is “largely speculative at this point, but we’re anxious to do whatever we can.”

And if Urban Partners is still unable to present a phase two development plan by January, the city will probably re-negotiate with them.

Urban Partners “remains committed to our investment in Town Square with a ground up development” in the future, principal Paul Keller told The B-Town Blog earlier this year.

“As the economy continues to heal, we are optimistic that at some point in time we will be able to move forward” with the second phase of private development there.

by Ralph Nichols

Mark Twain famously once remarked, in response to an obviously erroneous news story, that “reports of my death have been greatly exaggerated.”

More recently, an announcement that ST Residential would begin marketing and selling housing units in the Town Square condo/retail complex it has owned since late October was modestly exaggerated.

The reality is that determining what asking prices for these condos should be – balancing the interests of ST Residential and prospective buyers – given current market conditions is akin to shooting at a moving target while blindfolded.

And Aug. 1 turned out to be too soon for this mega condo seller to pencil out numbers that work. “I’m still not convinced the [real estate] market is settled today,” David Ploger, first vice president of ST Residential, told Burien City Council members Aug. 15.

But ST Residential is looking toward a public launch of condo sales, “although I can’t guarantee it will happen yet this year,” Ploger added. Still, he voiced confidence in their product and the marketability of the condos.

No mention was made of the building’s 20,000 square feet of vacant retail space on the ground floor, nor did council members inquire about it.

The Town Square condominiums are one of three such properties “we hope to bring to market yet this year,” Ploger said. “I’m very pleased with it…. We’ve concluded over and over that Burien Town Square should be what it was intended to be – owner-occupied units.”

Noting he’s “very pleased with it,” Ploger described the 118 unsold uits as “very efficient. The floor plans are state of the art. I’ve looked around and I’m not aware of a better condominium complex in the South Seattle area.”

About 40 prospective buyers signed contracts and made deposits on units while the property was still owned by Urban Partners. ST Residential reportedly is contacting these buyers individually with modified terms.

Ploger said sales prices established by ST Residential will be “fair to us and give value to the owners.” Those prices are expected to be “more than 35 percent below the original prices” when the seven-story complex opened over two years ago.

In July, new prices for the Town Square condo were placed at approximately $120,000 to $420,000, compared to the original $200,000 to almost $700,000.

Six condos were sold before sales were placed on hold when the Federal Deposit Insurance Corporation (FDIC) closed Corus Bank of Chicago in September 2009.

Corus Bank had financed construction of the building with a $38.5 million loan in 2007 to Urban Partners, the city’s partner as developer of the private components of the still-unfinished Town Square project.

The nation’s housing market began to collapse a year later, eight months before the condo/retail complex opened along with the Burien Library/City Hall building and Town Square Park.

After the FDIC seized the bank’s assets, including Urban Partners’ loan, ST Residential became holder of its residential construction loan portfolio.

ST Residential is comprised of the FDIC, which holds a 60 percent share of that portfolio, and Starwood Capital Group and four other several private investors.

Urban Partners eventually transferred ownership of the condo/retail complex – avoiding a trustee’s sale of this property, which was in foreclosure – to ST Residential. The FDIC earlier had rejected an offer by Urban Partners to buy back its construction loan.

Urban Partners still owns undeveloped parcels within the Town Square area north of both the library/city hall building and the condo/retail complex. It has yet to announce plans for the second phase of private development there.

by Ralph Nichols

Marketing of condominiums in the Town Square complex will take place over the next couple of weeks, with sales resuming on Aug. 1 for the first time since late summer 2009.

Condo prices will average 35 percent below what they were when the seven-story building opened to great expectations two years ago.

The long-anticipated announcement was made Tuesday (July 12) by ST Residential, managing partner of the public-private investment group, which acquired ownership of the condo/retail complex from developer Urban Partners on Oct. 29.

“After carefully studying the market, we have decided to re-open sales at the property,” ST Residential said in a statement released by spokesman Peter Marino. “We look forward to selling these homes and infusing new life into this wonderful property.”

Marino said a market analysis indicates the new lower prices – about $120,000 to $420,000, compared to over $200,000 to almost $700,000 in 2009 – “can support sales.”

While not all of the 118 available condos will initially go on the market, “the majority in the first release of homes are on the top three floors of the building,” he added. “With 30 floor plans, we will be flexible depending on buyer needs.”

Six condos were sold before sales were placed on hold when the Federal Deposit Insurance Corporation (FDIC) closed Corus Bank, which issued the construction loan, in September 2009.

Marino noted that ST Residential has “been actively trying to lease … for a number of weeks” the 20,000 square feet of vacant retail space on the ground floor of the complex. “That marketing program is distinct from the home sales program.”

There has been “considerable” interest, but no retail lease agreements have been closed so far.

The announcement by ST Residential appears to end a lengthy chapter riddled with uncertainty in the history of Burien’s still-young Town Square.

Urban Partners – developer for the private components of the Town Square project – financed construction of the building with a $38.5 million loan from Corus Bank of Chicago in 2007.

The nation’s housing market began to collapse a year later, eight months before the condo/retail complex opened along with the Burien Library/City Hall building and Town Square Park.

After the FDIC seized the bank’s assets, including Urban Partners’ loan, ST Residential became holder of its residential construction loan portfolio.

ST Residential is comprised of the FDIC, which holds a 60 percent share of that portfolio, and Starwood Capital Group and four other several private investors.

Urban Partners eventually transferred ownership of the condo/retail complex – avoiding a trustee’s sale of this property, which was in foreclosure – to ST Residential. The FDIC earlier had rejected an offer by Urban Partners to buy back its construction loan.

Burien City Manager Mike Martin told The B-Town Blog on July 13 that, as of then, ST Residential hadn’t informed the city of its plans to resume condo sales at reduced prices.

But, Martin said, he looks forward to increased retail activity in downtown Burien, which new condo sales are expected to generate.

ST Residential will adhere to requirements of the original development agreement with Urban Partners, he added.

Earlier this year, there was speculation that ST Residential might propose marketing at least some of the units in the condo/retail complex as apartments for rent – a change that would have required an amendment to the development agreement by the city council.

That idea was set aside when the market analysis indicated condos will sell with the new pricing.

Urban Partners still owns undeveloped parcels within the Town Square area north of both the library/city hall building and the condo/retail complex. It has yet to announce plans for the second phase of private development there.

In addition, original developer Urban Partners will be retained to manage the property.

As we’ve previously reported, Urban Partners financed construction of the six-story Town Square complex with a $38.5 million construction loan from Corus Bank of Chicago.

But the bank, a major construction lender, was closed and its assets seized by the FDIC on Sept. 11, 2009 – just three months after the building opened.

The nation’s housing market collapsed about a year before Corus Bank failed and only eight months before the complex opened at the same time as the new Burien Library/City Hall building and Town Square Park.

ST Residential – an investment group formed by the FDIC, which retained a 60 percent interest in the Corus construction-loan portfolio, Starwood Capital Group and four other private investors – acquired Urban Partners’ Town Square project loan.

Burien Town Square includes 124 condominiums and 19,700 feet of retail space. Only six of the condos have been sold, and none of the retail space has been leased.

Urban Partners' Paul Keller.

In an August interview, Keller told The B-Town Blog that “Urban Partners anticipates [a settlement] will happen.

“Very simply put, Urban Partners anticipates its continuing participation in this project through the sale of condominiums and the leasing of ground-floor retail space.”

In a statement released Friday, Keller said:

“We are extremely proud of what we’ve accomplished with the city and the extraordinary building we have given the community; we want to continue to be involved in its success.”

Also from the same release:

“We feel a battle over the property or a contentious bankruptcy proceeding is not in the best, long-term interest of the project, its residents, the City of Burien or Urban Partner’s long-standing investment in the community,” said Matt Burton, Principal and Chief Financial Officer of Urban Partners, LLC.

Read our previous coverage of Town Square here.

by Ralph Nichols

Despite recent notice of a pending foreclosure action against the condominium/retail complex in Burien Town Square, negotiations between Urban Partners and ST Residential have progressed to the point where a settlement appears imminent.

“We’ve completed our negotiations and the final agreement and various exhibits are being circulated and reviewed now,” Paul Keller, managing partner of Urban Partners, the private developer of Town Square, told the B-Town Blog on Aug. 17.

“I firmly believe that within a couple of weeks, the agreement will be signed,” Keller said. “When I stood before the city council in May, I told them we would see this to fruition. Today I stand by that statement.”

He declined to discuss specifics since the agreement is still under review. “I can only tell you what Urban Partners anticipates will happen.

“Very simply put,” Keller continued, “Urban Partners anticipates its continuing participation in this project through the sale of condominiums and the leasing of ground-floor retail space.”

Urban Partners built the Town Square complex with a $38.5 million construction loan from Corus Bank of Chicago. But the bank was closed and its assets seized by the Federal Deposit Insurance Corporation on Sept. 11, 2009 – three months after the six-story building opened.

The nation’s housing market had collapsed about a year before Corus Bank failed – as the complex was nearing completion and only eight months before it opened in June 2009, along with the new Burien Library/City Hall building and adjacent park.

“I firmly believe that within a couple of weeks, the agreement will be signed" - Paul Keller.

The FDIC kept a 60 percent interest in the Corus construction-loan portfolio and sold the remaining assets to Starwood Capital Group and four other private investors. Together all parties formed ST Residential, which is holding and renegotiating those commercial loans.

When Keller updated the city council on the progress of negotiations in May, he noted, “The FDIC entity does not lend itself to any quick resolution.” Yet in the meantime, “We have people waiting to close escrow and move into the building, but they’re stymied.”

He added this week, “There are all kinds of internal processes they [ST Residential] have to go through that I’m not privy to and then they have to report back to the FDIC” before resuming discussions with Urban Partners.

ST Residential also has its home office in Chicago and a former employee of Corus Bank, who managed Urban Partners’ Town Square construction loan, has continued to be involved with the developer during the negotiation process.

“That’s who we have had to deal with,” Keller said. “So there’s been a continuity.”

With negotiations between Urban Partners and ST Residential, which were initiated last fall, moving slowly, a legal notice of foreclosure was filed on July 26, stating that if Urban Partners does not pay $3.5 million by Sept. 1 its Town Square complex will go into foreclosure.

Urban Partners still owes approximately $34.8 million on its loan from Corus Bank. Foreclosure would affect the 118 unoccupied condos that have not been sold as well as ground-floor retail space and parking. Six condos sold last year would not be impacted.

Keller noted that the foreclosure action and the $3.5 million payment “are all included in the agreement.”

During negotiations with ST Residential, Urban Partners has attempted to renegotiate down its construction loan so prices of condos and retail space can be reduced to reflect current market rates.

Peter Marino, a spokesman for ST Residential, said in response to an inquiry from The B-Town Blog, “at this point, we are a few weeks away from being able to comment publicly about [the Town Square] property. We will let you know as soon as we have something to say.”

Urban Partners may bring a 10-screen cinema, with an additional stage for community theater and dance, to downtown Burien.

Town Square Cinema Next?
Beyond the anticipated agreement – and resumption of condo and retail-space sales – Keller said Urban Partners is “absolutely” committed to continued involvement in the private development of Town Square.

“Urban Partners has been diligently working with Galaxy Theatres for a transaction that can be advanced and can satisfy all the requirements of the downtown plan.

“I’m cautiously optimistic that very soon I will be able to report back to the Burien City Council and the Burien Economic Development Partnership of fruitful progress on a Galaxy Theatre” for Town Square.

The recent approval of financing for Burien’s Transit-Oriented Development parking garage by Sound Transit and the King County Council “is a big step forward, a critical component,” for the proposed multiplex cinema project, he said.

If built, it would bring a 10-screen multiplex cinema, with an additional stage for community theater and dance, to downtown Burien at the southwest corner of SW 150th St. and 4th Ave. SW where the old city hall building is located.

A 10-screen cinema would be built at the corner of SW 150th St. and 4th Ave. SW where the old city hall building is located.

The parking garage, which would provide needed evening and weekend parking for movie goers, will be built near the northeast corner of SW 150th St. and 4th Ave. SW. Construction is expected to begin in late summer or early fall with completion in about a year.

Council approval would be required for a cinema, since it would represent a significant change in plans from Urban Partners’ current Town Square agreement with the city for development of another condo/retail complex on that site.

PREVIOUS COVERAGE:

• REPORT: Burien Town Square Facing Foreclosure
• “We Can Be Proud Of What We Did” Town Square Developer Dan Rosenfeld
• Is Town Square’s Urban Partners Becoming A “Silent Partner” To Burien?
• What Is Urban Partners Planning To Do With Burien Town Square?
• Here’s Why Burien Town Square Sits Vacant Less Than A Year After Opening
• 10-Screen Multiplex Theater May Be Built At Old City Hall Location
• Cinema Reps Make Their Pitch To Burien City Council
• Will Condo Prices Be Lowered Now That Burien Town Square’s Lender’s Assets Have Been Sold?
• Are Reports Of The Demise Of Burien’s Town Square True? Take Our Poll
• Over 1,000 Witness Burien Town Square Grand Opening

The Seattle Times reports that Burien’s Town Square is facing foreclosure.

According to the report:

The firm that holds the note on the construction loan for Burien Town Square Condominium filed a legal notice late last month that it intends to foreclose on the property Oct. 29 unless developer Urban Partners comes up with $3.5 million by Sept. 1 to cover missed monthly payments and related charges.

We’ve been following the travails of Town Square’s financial difficulties probably closer than anyone (read our previous coverage here), and rest assured, we’re on this news like white on rice.

We’ll have our own full, in-depth report within the next few days.

PREVIOUS COVERAGE:

• “We Can Be Proud Of What We Did” Town Square Developer Dan Rosenfeld
• Is Town Square’s Urban Partners Becoming A “Silent Partner” To Burien?
• What Is Urban Partners Planning To Do With Burien Town Square?
• Here’s Why Burien Town Square Sits Vacant Less Than A Year After Opening
• 10-Screen Multiplex Theater May Be Built At Old City Hall Location
• Cinema Reps Make Their Pitch To Burien City Council
• Will Condo Prices Be Lowered Now That Burien Town Square’s Lender’s Assets Have Been Sold?
• Are Reports Of The Demise Of Burien’s Town Square True? Take Our Poll
• Over 1,000 Witness Burien Town Square Grand Opening

We’d like to welcome our latest Advertiser, Whispering Brook Condominiums, to The B-Town Blog.

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Whispering Brook is an apartment-to-condominium conversion in Des Moines that been around for a few years, but sales stalled with the recession. A new seller has taken over to finish sales.

The new seller has lowered prices and they are quite aggressive, with one-bedroom homes starting from $94,950, and two-bedroom homes from $119,950. They will have FHA approval in two weeks, which makes financing easy with down payments as low as 3.5%. Monthly payments on the one-bedroom homes are as low as $799/month.

The property has been completely renovated, and homes feature Pergo kitchen floors, stainless steel appliances, wood-burning fireplaces and private decks. The community backs to a treed area with a stream running through. There is a community clubhouse and swimming pool for entertaining.

Interior Features:

• Pergo flooring in kitchen
• LG combo unit (washer & dryer) in each home
• Side pieces with tile surround fireplaces
• Decks off each home or ground floor patios
• Brushed nickel bathroom accessories
• Wall to wall carpet in living room, bedroom(s) and hallways
• Ground floor patios have professionally landscaped garden area

Added Amenities:

Community backs up to a treed area with a small stream rushing through..
Clubhouse features an entertainment room, and large common room with kitchenette and big screen TV
Private swimming pool

Whether you’re looking for your first home, or downsizing, take a long serious look at living in Whispering Brook Condominiums in Des Moines. Sales specialist Sara Wright is available for showings Thursday-Mondays from 11-5pm. She can be reached at 206-870-3893 to set an appointment.

[Would you like to have a "Blogvertorial" story, Ad and/or Event Listing like this on a popular, fast-growing website seen by over 51,000 interested Local Readers every month? Email us for more info, or check out our Advertise page!]

by Ralph Nichols

With only five of the 124 condominiums at Town Square sold to date, more than five months after the grand opening of this complex in June, prospective buyers and those anticipating future downtown development in Burien wonder if condo prices might be lowered.

This question has been raised in the weeks since Chicago-based Corus Bank – the construction lender for Urban Partners, the private developer of the condo/retail complex in Town Square – was seized by the Federal Deposit Insurance Corporation (FDIC) on Sept. 11.

Corus Bank’s deposits were sold, then the FDIC conducted a private auction for the remaining assets. Now Starwood Capital Group, TPG Capital, Perry Capital and WLR LaFrak have acquired an equity interest in a limited liability corporation that will hold the construction loans and real estate-owned assets of Corus.

“The $4.5 billion portfolio consists of more than 100 loan and (real estate-owned) assets linked to high-quality condominiums, multi-family housing, office properties, and land representing nearly 23 million square feet,” according to a recent news release from this investment consortium.

Urban Partners, however, has yet to comment publicly on whether it might reduce the prices of its Town Square condos’ phase one of the planned Town Square project. A primary reason for this is that it’s not a simple matter of lowering those prices, despite the fact that the investment consortium purchased the construction loans of Urban Partners and others well below their original value.

Two or three or even more banks usually are involved in large construction and real estate loans, notes Burien Economic Development Manager Dick Loman. This, in turn, creates a slow and involved process for a developer to obtain permission from lenders before it can make a corresponding reduction in its housing prices.

In the meantime, Loman says, Urban Partners is “hanging in there. They’re not leaving town. They’re trying to do the right thing. I know that Urban Partners wants to meet the market, but they can’t act until they receive a green light for moving forward. This means that (Town Square condo) prices aren’t going to go down without permission from the bank.”

Burien City Manager Mike Martin emphasizes that “no public money is involvedâ” in the Town Square condo-retail complex. “There is no financial to the taxpayers” because the Urban Partners’ development is privately financed.

But, he adds, “We do want to see them fill up sooner than later.”

by Ralph Nichols

Borrowing a phrase from Mark Twain, reports of the demise of Burien’s Town Square condominiums, which opened for occupancy in June, are vastly exaggerated.

So declares Dan Rosenfeld, principal of Urban Partners, developer of the privately owned condo and retail complex in Town Square at the corner of SW 152nd Street and Sixth Ave SW.

“We are holding on,” Rosenfeld said this week, responding to a rumor that Urban Partners is barely hanging on. “We are very proud of the quality of our project and the effect that it’s having on the revitalization of downtown Burien.”

Together with the public part of the Town Square project, he added, which includes the new King County Library/City Hall building and a downtown park.

“We couldn’t have built a better project,” Rosenfeld continued. “We did this in a very challenging market. We are working buyer by buyer on closing sales. We are making progress. In the long run, I think we will be very successful.”

Un-leased retail spaces sit empty at Town Square.

The Town Square complex includes a mix of one- and two-bedroom condos, two-story Homes on the Park, and live/work lofts. There is 20,000 square feet of ground-level retail space in addition to 122 condos.

None of the retail space has been leased to date. And, said Burien economic development manager Dick Loman, five of the condos have been sold and closed to date, according to the most recent number provided him.

“They’re selling slow for reasons we all understand,” Loman said. “No development company is making money today but they have the resources to hang on.”

Rosenfeld underscored Loman’s assessment, stating that Urban Partners plans “to stay the course – literally 20 potential buyers are having trouble selling their (existing) homes. Everything’s difficult. That is not a reflection on what we have (at Town Square). Quite the contrary. We’ve received many compliments on the project.”

Underwriting standards have been tightened as lending markets adjust to new criteria, he noted. Urban Partners is “fine tuning our lending program and our marketing activities in response to changing circumstances in the capital markets. We are constantly trying to find ways to do it better.”

Burien City Councilman Gordon Shaw quashed another rumor, which suggested Urban Partners was considering renting some of the condos as apartments. The developer is prevented from doing that in their agreement with the city, which states they must be”for sale” units, he said.

With only five condos sold, and all retails spaces still "for lease," it's no surprise that rumors have started.

But, Shaw said, “It’s concerning to me that more of the residences have not been sold and closed. I’m also distressed about no retail leases – I just don’t know how (Urban Partners) can weather this storm.”

As a councilman, he continued, “I’m just sitting here holding my breath. Urban Partners is telling us nothing about their financial condition.”

For his part, Rosenfeld says they still hope to build the other two condo/retail complexes long-planned for Town Square, “but we have to sell the first phase first. The mortgage markets are challenging, the appraisal markets are challenging. The good news is, there are real signs that a turnaround in housing markets is beginning to appear. Things are edging upwards.”

So…what do YOU think will happen to Burien’s shiny new Town Square? Please take our poll, or leave a Comment below…