Midtown Center The Stencil… and East Union is coming… soon

It is a riskier bet than most $23.25 million land deals in Seattle. But new neighbors and longtime community members are probably happy to see real progress. Africatown, again in partnership with sustainability nonprofit turned in-city housing developer Forterra, will still be part of inclusive development component in the deal. And the buyers seem to know what they are doing.

Lake Union Partners announced Tuesday that it is surging ahead with a plan to redevelop 23rd and Union’s Midtown Center block and has already closed on a purchase of the land — a riskier approach than national shopping center developer Regency Centers and its partner Lennar were apparently willing to take in their failed deal to acquire the property and build a grocery-focused project.

“Given our other investments at 23rd and Union, we’ve worked hard to connect well with the neighborhood and as always, we simply try to do good work with our design, be respectful of the community, and create projects with neighborhood retail that residents of the area need and want,” Patrick Foley of Lake Union Partners said in the announcement.

“It’s an honor for us to be part of this historic partnership between our company, Forterra and Africatown. It’s a huge responsibility and we take it seriously.”

Lake Union’s Midtown deal means a full 180-degree reset on the unpopular grocery development plan and the immediate change of ownership represents a fresh start for Africatown and community groups and neighbors frustrated by the management of the property by the block’s longtime family owners. Lake Union expects a new design review process to begin this fall.

The new plan for the block will create 520 to 555 apartments “with approximately half of the unit count dedicated to affordable housing.” Earlier this month, Mayor Ed Murray’s office announced legislation to implement Mandatory Housing Affordability requirements along 23rd Ave. “The agreement would allow taller buildings in exchange for contributions to affordable housing,” is the mayor’s simple description of the city’s hot button rezone issue. The City Council must still approve the rezone and incentives.

Here is how the affordability plan will break down on the project:

Lake Union Partners intends to develop between 400-420 apartment homes on their portion of the site, including approximately 125 affordable housing units allocated for households earning between $40,000 and $65,000 per year or 60% to 85% of area-median income (AMI). The affordable housing would be built as part of both the city’s Mandatory Housing Affordability (MHA) program and the Multi-Family Tax Exemption Program (MFTE). There are also plans for approximately 20,000 sq. ft. of ground-level commercial retail and restaurant space. Africatown/Forterra will develop 120-135 affordable apartment homes, affordable to individuals with income as low as $26,880 – or 40% AMI. The building will also include about 3,100 sq. ft. of ground-level retail. Combined, roughly 50% of the housing on the full-block would be affordable to people earning between 40-85% of area median income.

Lake Union is already the developer on three buildings around the intersection with a combined 275 apartment units and some 25,000 square feet of commercial and restaurant space. Included in that is the 18,000-square-foot grocery store planned to anchor the under-construction East Union building on the intersection’s northwest corner. CHS reported earlier on the interest from Portland-based New Seasons in being part of the project.

Long held by the Bangassers, in 2016 a family legal fight sabotaged a previous $23.5 million deal to sell Midtown to developers. The first Midtown parcels were purchased by the Bangassers’ father 75 years ago. Paul Bangasser was active in the neighborhood’s fight for racial equality and fair housing, according to his 1992 obituary. With the sometimes nasty court battle mostly resolved, the Bangasser family partnership that owns the property said it was doing more to address safety and use of the shopping center with improvements to the property and an effort to bring in new tenants. But disputes over the removal of Omari Garrett from his home on the Midtown property and a fight over the presence of Africatown’s Black Dot work space in the shopping center soiled the latest hopes for a better future for the block. Then, in February, the second big land deal with Lennar and Regency fell through. May now brings more than hope for the block.

As part of the Midtown announcement, Lake Union said it plans to sell 20% of the property to Forterra on behalf of Africatown. “Forterra will work with Africatown to transfer the property into a community development partnership entity,” the announcement reads. It’s the same framework that was in place on the previous project. “We need more positive development, more investment,” K. Wyking Garrett, CEO of Africatown, told CHS at the time. “There is a need to support and grow black-owned businesses.”

Forterra and Africatown made an offer to purchase the Midtown block outright after the last deal caved in but that bid was rejected. With cash up front, Lake Union Partners was able to seal the deal and still offer Africatown a place in the project.

“Bold partnerships like this are necessary if Seattle is to truly mitigate displacement, nurture diversity and create lasting business and residential affordability,” Africatown board member Andrea Caupain said in the announcement of the new Midtown deal.

If it ultimately comes to fruition, the Africatown portion of the development could be some of the first housing to rise in Seattle from a Forterra development project as the nonprofit fosters partnerships around the city — and tries to outmaneuver the commercial market — for the city’s high-demand real estate.

Meanwhile, the Midtown purchase marks the second major partnership entered into by Africatown around the redevelopment projects in the 23rd and Union neighborhood.

In the Liberty Bank Building, Africatown joined The Black Community Impact Alliance, and Centerstone in a memorandum of understanding with nonprofit developer Capitol Hill Housing. The Liberty partnership has been held up as a template for inclusive development in Seattle with a respect for history and the empowerment of the African American community. The group is working to incorporate the site’s historical significance and create housing that is home to black residents and commercial space with black businesses. The agreement also includes a path to black ownership of the development. The affordable housing project with plans for 115 studio, one-bedroom and two bedroom apartments and four commercial spaces passed through its first design review in late November and is slated to break ground in June.