The yearslong fight over fixing a prominent condo tower on Westlake has reached its most visible phase. Also, a local public company will simply dissolve and give shareholders a check — that’s really rare.
Massive white plastic sheets blanket the northeast face of an 18-story tower in Seattle’s Denny Triangle neighborhood, the last phase of a yearslong repair project at 2200 Westlake.
Built by Vulcan in the mid-2000s, the mixed-use commercial condominium consists of three buildings — originally named Aria, Azur and Arte. The most prominent is the Aria tower that houses retailers Whole Foods and Tutta Bella, the Pan Pacific Hotel and, at the top, luxury condominiums.
In late 2012, the owners at 2200 Westlake reached a construction-defects settlement with Vulcan — worth about $26 million, according to Windermere broker Jeff Reynolds, who blogs about the condo sector. A 12-phase repair project began in fall 2013 and is scheduled to be finished by March.
Marco Kronen, a 2200 Westlake condo owner who is also a Windermere broker, said most developers of new condos built during the last housing boom have been sued for construction defects.
Most Read Business Stories
- Downtown Seattle's troubles go beyond the pandemic
- Oregon company's iron battery breakthrough could eat lithium's lunch
- Former Boeing pilot indicted on fraud charges related to 737 MAX crashes that killed 346
- New apartments are built, but renters can’t get in. Here’s what is causing the logjam in Seattle
- For Pike Place Market and its vendors, COVID was yet another test of survival
The state’s condominium act gives buyers of new condos up to four years to bring a claim against the builder and developer for construction defects. Homeowners associations typically hire a consultant to inspect the property before the four years pass.
“They’re always going to find something wrong,” Kronen said. “I think any builder is going to have issues with the current state statute.”
The condo owners at 2200 Westlake alleged water intrusion, inadequate fire-stopping materials and other construction-quality problems.
Repair work also is getting started on another Vulcan residential project built in 2008.
The homeowners association at Veer Lofts, a six-story building at 401 Ninth Ave. N., filed a construction-defect lawsuit against Vulcan in 2012.
The 99-unit condo reached a settlement last summer for an undisclosed sum, said HOA treasurer Patricia Shelby, who declined further comment.
Vulcan, asked about both the 2200 Westlake and Veer Lofts settlements, said in a statement that it’s “committed to provide a high-quality product to homebuyers” and has “worked collaboratively with homeowner associations to amicably resolve these issues.”
— Sanjay Bhatt: firstname.lastname@example.org
Through some five decades in business and several permutations, Ambassadors Group of Spokane hasn’t done much to make headlines.
Its planned demise, however, deserves notice because the company is doing something extremely rare for a struggling public company: It has decided to go out of business and send each stockholder a check for a slice of the assets.
The small — and shrinking — company, with a market capitalization of about $50 million, will ask shareholders to OK the plan Sept. 10. It estimates the owner of each share will get $2.50 to $2.85 initially, and maybe a bit more once all the company’s obligations are settled.
Ambassadors, which organizes trips abroad for student and professional groups, traces its history back to President Eisenhower’s 1956 People to People initiative to get Americans out into the wider world for educational, cultural and humanitarian exchanges. Its first student group traveling to Europe in 1962 was “briefed by Robert Kennedy,” the company says.
“Students don’t travel as tourists — they get immersed in local cultures and make meaningful connections,” according to the sales pitch on Ambassadors’ website. “Students come home inspired, confident and more connected to the world and possibilities around them.” But that message apparently failed to resonate with potential customers in recent years.
After what it calls “a lengthy and intensive evaluation of potential strategic alternatives,” Ambassadors declared this summer that “it is in the best interests of the company’s shareholders … to dissolve, liquidate and distribute to stockholders its available assets.”
Company officials could not be reached to discuss the decision. But it’s not hard to see why they might be discouraged.
Only one brokerage was issuing reports on Ambassadors, according to Bloomberg data, and that firm, D.A. Davidson, dropped coverage when an analyst left about three years ago.
He wrote before leaving that 2012 was “destined to be the fifth annual decline” in the number of travelers on its programs, which had fallen from a 2007 peak of 52,000 to less than 24,000 in 2011.
By last year, travelers had dwindled to 16,000. In July, Ambassadors said that after “declining revenues and declining travelers for several years,” it would cancel trips scheduled for 2016 and begin dismantling its staff, which numbered 155 at the end of last year.
Stockholders were told that if a better offer comes along, the company may take it — even after shareholders approve the dissolution — but nobody’s betting on that.
Thanks to the liquidation plan, no doubt, Ambassadors shares have held up better than the jittery market in recent weeks. On Friday the stock, at $2.67, was up 19.7 percent for the past month, versus an 9.4 percent decline in the Nasdaq.
— Rami Grunbaum: email@example.com