A developer who proposed a 32-story condo tower two years ago on the site of Watermark Credit Union's downtown Seattle headquarters now...

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A developer who proposed a 32-story condo tower two years ago on the site of Watermark Credit Union’s downtown Seattle headquarters now wants to build an office building less than half that tall instead.

Schnitzer West of Bellevue submitted a preliminary application last week for a 14-story office building on the site at Eighth Avenue and Stewart Street, city records show.

Watermark’s five-story, 30-year-old building, across the street from the Greyhound bus terminal, would be demolished.

Schnitzer submitted preliminary plans for the condo tower in 2006 but did not pursue them.

A Schnitzer representative did not return calls Wednesday seeking information about the project’s use and height changes. But the downtown condo market has cooled in recent months while the office market has remained tight.

Zoning allows nonresidential buildings up to 500 feet tall on the site. But some of the development rights were transferred in 2006 so that Schnitzer’s 36-story office tower, 1918 Eighth, under construction on the same block, could be taller.

Schnitzer, one of the region’s biggest developers, also is building a 14-story office project in the same square block, at 818 Stewart.

Watermark still owns its headquarters property, but Schnitzer has an option to buy it.

The new building would have 10,000 square feet of retail on the ground floor and parking inside the building, according to a city notice.

The downtown Design Review Board is tentatively scheduled to consider it June 24.

Watermark, once known as Seattle Telco Credit Union, is moving its administrative offices to new space on Howell Street.

Vice President Sherry Lotze said the credit union will continue to operate a branch in the old headquarters until later this year, when it will move into 818 Stewart.

Members will experience no disruption in service, she said.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com