Property Development & Acquisition Case Study
Situation:
In the 1880s, hundreds of gas lamps lit up downtown Seattle, burning fuel that came from a gas manufacturing plant in the south end of town. In the early 1900s, the plant shut down, and a railroad station took its place. After Union Pacific Railroad stopped running the trains in 1971, Union Station and its surrounding land remained vacant for more than twenty years. The old station and the land around it began to deteriorate.
Several potential buyers did feasibility studies to determine the economical viability of renovating the 7.5-acre site. At first glance, the property's proximity to downtown Seattle and sports arenas, plus its view of Puget Sound, made it appear quite desirable. But developer after developer turned away, discouraged by the contamination left behind by the prior uses of the property.
In 1996, Nitze-Stagen, an innovative real-estate investment firm, obtained an option to purchase the property. Nitze-Stagen had successfully developed a former Sears warehouse into the corporate headquarters for Starbucks Corporation. Nitze-Stagen knew the attorneys at Marten Law Group had successfully helped a client redevelop a landfill on a hill overlooking Lake Washington into a premier 36 hole golf course.
Challenge:
To design and obtain approval of a cleanup plan for the old gas plant and railroad station that would have the support of regulators at the Department of Ecology ("Ecology"), the City, investors, neighbors, and, eventually, tenants. Nitze-Stagen and its investors needed to feel confident that they would not be held liable for undefined damages brought on by past environmental practices.
Solutions:
Marten Law Group negotiated a prospective purchaser agreement with Ecology which released Nitze-Stagen from past environmental liabilities at the site in exchange for a commitment by the developer to carry out an agreed upon, cost-effective, cleanup of the property.
To design this plan, we worked with environmental consultants, Ecology the Office of the Attorney General, EPA, the City, and the public.
Results:
Nitze-Stagen and its investment partners converted a former abandoned industrial property into a thriving, attractive 1.1 million square foot office complex with 35,000 square feet of retail space. The project won numerous awards and helped transform the south end of Seattle from a vacant industrial area to a center of Seattle's high-tech business community. The new development is home to many of Seattle's most prominent high-tech companies, including Paul Allen's Vulcan Ventures and Amazon.com.