Talks are under way to save Montlake Boulevard Market, despite upcoming interchange and lid construction for Highway 520 nearby.

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Negotiations are under way that could save the 80-year-old Montlake Boulevard Market, despite future construction of a wider Highway 520 interchange and a landscaped lid nearby.

The Seattle neighborhood worried this summer when the Washington State Department of Transportation (WSDOT) revealed that the market and a Union 76 gas station might be torn down for the next phase of its $4.6 billion bridge-replacement project.

WSDOT officials told neighbors at a meeting Wednesday the gas station must be demolished, but the market’s future was still being discussed.

“I walked away thinking, we’re around the bend now, we’re going to save the market,” said Kathleen Laughman, a Montlake Community Club volunteer tracking the issue.

If the store were to stay, though, about half the parking could be lost.

“The market has asked us to explore whether operations can continue, and we’re exploring it at this time,” Suanne Pelley, spokeswoman for the 520 project, said Friday morning.

Both businesses sit on a triangular parcel owned by Kemper Development, the downtown Bellevue-based firm founded by Kemper Freeman that owns Bellevue Square mall, the Hyatt Regency Bellevue and high-rise Lincoln Square.

The gas station on the point of the Montlake-520 junction must go, the state says. Access from the offramp will close because the new ramp will be 4 feet higher and need some retaining walls. There also would not be space for petroleum tanker trucks to make deliveries.

The state also said in the past the whole area was needed to stage construction equipment, but neighbors have persisted, even holding a storefront rally last month.

WSDOT made an offer to Kemper Development to buy the whole triangle, Pelley said. The property is assessed at $2.7 million.

If the Montlake parcel were split, to leave only the market, the store could lose roughly 15 parking spaces in the back.

The market would thrive anyway, said Laughman.

“It’s an integral part of the community, the majority of the shoppers there are walk-ins,” she said.

A Kemper Development manager involved with the talks wasn’t immediately available, and the store’s owners earlier this year said they intend to stay. Store manager Aaron Gepner said Friday he hasn’t posted any recent updates for curious customers, and it could be a few weeks before he receives further information.

The market, formerly known as the Hop-In, is the only full-service grocery in its neighborhood. Without it, shoppers might have to drive to University Village or bus to Capitol Hill. The Montlake Community Club hasn’t give up on saving the gas station, too, Laughman said.

The new interchange and lid were on hold for years, but funding for those and a Portage Bay bridge to Interstate 5 became available through the $16 billion “Connecting Washington” plan, passed by lawmakers last year, that included gas-tax increases of 11.9 cents per gallon.