Kemper Development has pushed back the timetable for its proposed Lincoln Square expansion in downtown Bellevue by at least 15 months. The company had planned...
Kemper Development has pushed back the timetable for its proposed Lincoln Square expansion in downtown Bellevue by at least 15 months.
The company had planned to break ground on the high-rise, mixed-use project by next spring. But Chairman and Chief Executive Kemper Freeman Jr. said Monday that construction won’t start until summer 2010 at the earliest.
He attributed the delay to the slowdown in the local condo market and to logistic complications the company would have encountered if it had expanded Lincoln Square while it was building a major addition to its Bellevue Square mall across Bellevue Way Northeast.
“We thought we could do it all at once,” Freeman said. “We finally said, ‘That’s nuts.’ “
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Kemper Development’s plans for Lincoln Square call for two towers atop a three-story base containing more than 350,000 square feet of retail and restaurants.
One tower would house 200 condos and a 120-room luxury hotel. The other tower would have about 545,000 square feet of office space.
The site is at the northeast corner of Bellevue Way and Northeast Fourth Street.
Across the street, at the northwest corner, Kemper plans a “luxury village” wing for Bellevue Square, called The Bellevue, with more retail and another high-end hotel. A 500-stall mall parking garage now occupies the site.
Building The Bellevue and expanding Lincoln Square at the same time could have created parking problems for Bellevue Square, Freeman said.
The current plan calls for work on The Bellevue to start first — sometime in 2009, perhaps as soon as next spring.
When the existing garage is taken out of commission, the Lincoln Square expansion site will become a temporary parking lot with about 400 stalls, Freeman said.
It should take about 15 months to finish The Bellevue’s seven-level underground garage, he said.
When that garage is available, work on the Lincoln Square expansion will begin.
“This thing is like a juggling act,” Freeman said.
The Lincoln Square expansion site was home for 45 years to the downtown Bellevue Safeway. The grocer moved out last week, into larger space in the new Avalon Meydenbauer mixed-use project across Northeast Fourth.
The once-hot regional condo market has cooled in recent months, with many proposed projects delayed.
By pushing back the Lincoln Square expansion, “I think we’ll be on the front end of the next wave,” Freeman said.
The delay probably makes sense, said Dean Jones, principal with Realogics, a Seattle condo-marketing firm.
“He’s got time on his side and he owns the property,” Jones said. “A lot of developers are taking a breath. There are new rules in real estate now — the credit crunch, rising construction costs.”
Freeman also may want to wait to gauge market response to Schnitzer West’s Bravern project, another big retail-residential-office development in downtown Bellevue that is scheduled for completion next year, Jones said. Jones’ firm is marketing The Bravern’s condos.
Freeman said he regrets that he can’t build the office portion of the Lincoln Square expansion sooner, to take advantage of a tight Eastside market.
With one exception, all the office buildings under construction in downtown Bellevue are completely pre-leased. Microsoft has taken more than 1 million square feet.
In addition to The Bellevue and the Lincoln Square expansion, Kemper is building a 351-room addition to the Hyatt Regency at its Bellevue Place development.
That project is scheduled to open in about a year.
Eric Pryne: 206-464-2231 or email@example.com