City Manager Rob Karlinsey will recommend two buyers for the Kenmore Village commercial properties during the city of Kenmore Council meeting at 7 p.m. on June 10.

He will present a purchase and sale agreement for the Kenmore Village Shopping Center, 3.3 acre lower portion for consideration and possible approval during the meeting. The 4.75 acre upper parcel agreement remains under negotiation and will likely be presented for council consideration in July.

Karlinsey recommends Benaroya Company and Real Property Investors as the buyer of the Kenmore Village lower parcel. MainStreet Property Group LLC is the expected buyer of the upper lot, formerly the King County Park & Ride.

“We were very pleased to see the strong interest in these properties,” said Karlinsey. “Clearly, the investment community is bullish on Kenmore. Many other high quality buyers with strong access to capital aggressively competed for these properties.

The two projects could bring at least $25 million in new investment to the downtown area. The new construction will include retail, office, high density residential, and a high quality, signature public gathering space. According to Karlinsey, the benefits to the community and the businesses will include:

• Enhanced development and aesthetic appeal with new construction.

• A heightened sense of place-making with the public gathering space, walkable design and other improvements.

• New quality housing near major bus lines and local amenities in the downtown core.

• More retail choices for residents and visiting shoppers.

• New office space for businesses and a resulting increase in job opportunities in Kenmore.

• A stronger tax base for the city, including sales tax during construction and ongoing new property and sales taxes after construction.

The city will likely see more than $8.2 million in direct economic value from the sale and development of these properties, including the Kenmore Camera expansion location.

Direct economic value to the city will come in the form of purchase price for the properties, public improvements such as the town green, sidewalks, etc., and new tax and permit revenue to the city. Approximately 200 jobs are expected to be generated from construction.

“These are valuable new partners for our downtown,” said Mayor David Baker. “We’re glad to have them on board because they understand the city’s goals, and they want what we want.”

Real Property Investors and the Benaroya Company will partner to form an LLC called “BCC-RPI Kenmore” in order to purchase and develop the Kenmore Village commercial site. BCC-RPI Kenmore plans at least 20,000 square feet of new construction for the property with planned uses, including retail, medical office and general office space. There are ongoing discussions with potential new tenants, but no confirmed tenant announcements are available at this time.

The major purchase and sale agreement points include the following:

•  Purchase of the Kenmore Village Shopping Center, including the Post Office building, but not including the future expansion building (former Grocery Outlet building) for Kenmore Camera.

•  $1.8 million and $100,000 earnest money applied to the purchase price.

• 90-day environmental review period with a feasibility review period of 180 days.

• Real Property Investors and Benaroya will dedicate a public gathering space or town green for public use.

• The partners will construct at least 20,000 square feet of new commercial building space and at least 5,000 will be used for retail.

During the feasibility review period, the partners will also work to secure tenants and a more detailed plan for the site. The plan will include the location of the public gathering space or town green. Timing of new construction is tenant dependent; however, assuming tenant commitment is achieved over the six months, construction could begin as soon as summer 2014.

As for the Kenmore Village upper lot, the city manager’s office and real estate broker Jones Lang LaSalle (JLL) are completing negotiations with MainStreet. MainStreet is the recommended buyer based on its offer price, experience, financial wherewithal, ability to execute in a timely manner, and alignment with the city’s goals and position statement for the property.

It is anticipated that the purchase and sale agreement will be ready for council consideration at the July 8 council meeting.

MainStreet plans to develop and construct at least 160 quality rental apartment units on the former park & ride site. A portion of the units will be affordable under King County definitions and in keeping with the current deed restriction for the site.

Assuming the purchase and sale agreement for the property is executed in the near future, MainStreet hopes to be under construction on the site in June 2014.