Developers miss deadline to salvage Bothell hotel project

The city council set a deadline of July 20 for Bothell Hotels LLC to submit a new plan.

Plans for two hotels that were slated to be constructed in downtown Bothell appear to be dead in the water after the city council voted to attempt to repurchase four lots of property the city had previously sold to a developer.

Council voted on June 19 to repossess properties that Bothell Hotel LLC, a subsidiary of Lynnwood-based 360 Hotels, had purchased to build two separate hotels on. At the meeting, Bothell city manager Jennifer Phillips said the city signed a purchase and sale agreement with the developers in March 2017, which laid out the city’s expectations. Since the city owned the land — which included plots along Northeast 183rd Street and Bothell Everett Highway — it set guidelines through a development agreement that dovetailed with its overall plan to build out the city’s downtown core.

Last November the developers asked for a six-month extension for construction that was approved by council. Construction was supposed to start by June 15 of this year and be completed by September 2019. However, as of June 15, 360 Hotels still hadn’t received all the permits needed to begin construction. In a previous story in the Reporter from March, city staff said they hadn’t received permit applications from the company at that time. The hotel company had previously agreed to purchase the four lots from the city for $1.635 million.

“Basically they’re in default on the development agreement,” Bothell spokesperson Barbara Ramey told the Reporter in a phone interview.

Council voted to give the company until July 20 to develop a new plan and present it at a meeting for approval. However, no plan was presented at either of the council meetings before the July 20 deadline. The city will now attempt to repurchase the property under the claim that the company broke contract.

At a July 17 council meeting Alif Nurani, vice president of 360 Hotel Group, said the company remained committed to the hotel projects but claimed the city mismanaged the process and never provided guidance on how to proceed following the June 20 meeting.

“We were optimistic that things were moving in the right direction,” Nurani said.

Shaiza Damji, managing director of 360 Hotel Group, said that their company was not a land speculator and would not re-sell the property at a profit. Additionally, Damji said they were ready to start construction on Sept. 1. Nurani stated on June 20 the company had spent around $3 million already on the development.

“We invest in our communities, we support our communities,” she said.

Bothell deputy mayor Davina Duerr said at the July 17 meeting that she couldn’t comment on the council’s decision after 360 Hotel Group had threatened to sue the city. The law firm Byrnes Keller Cromwell LLP is representing 360 Hotel Group. Its attorney Josh Selig did not confirm whether they would sue. However, he said his clients would not sell the property back to the city on July 20.

“Bothell Hotel is disappointed in the city council’s decision. It remains fully committed to building a successful hotel that would be an asset to the Bothell community,” Selig said. “The city, we don’t believe, had the right to exercise that repurchase provision, and we remain optimistic that an agreement can be worked out.”

Ramey confirmed that Bothell Hotel LLC would not be cooperating with the repurchasing on July 20. Buying back property is like buying a house and both parties must agree to the transaction.

“So basically that means that the closing will not proceed as scheduled,” Ramey said.

The properties the hotel company had agreed to purchase and develop on were part of a sweeping land buy the city undertook in order to redevelop the downtown center. This included bringing in McMenamins Anderson School, moving SR 522 and implementing commercial business requirements on the ground floors of new buildings. The Downtown Revitalization plan was adopted by the city in 2006.

The hotels project would have seen the 360 Hotel Group build a six-story and another five-story hotel adjacent to City Hall that would have offered around 190 rooms. The hotels were slated to be a Mariott SpringHill and a Marriott TownePlace and house a drugstore and commercial space. Ramey said she wasn’t sure how the city repossessing the hotel properties would affect the downtown plan.

“The city is looking at basically all of their downtown parcels and the city council with community input will determine how best to use the property in the future,” she said.

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