Kemper acquired Lincoln Square from a group of investors led by Lend Lease Real Estate Investments' Value Enhancement Fund IV. The purchase price was not disclosed. The project includes a 380,000-sf, multi-story retail podium with a 27-story office tower at one end and a 40-story hotel and condo tower at the other, all over a 2,142-slip underground parking garage that is nearly complete. The project got under way in 2000 and was halted in mid-2002 because of the economic downturn, leaving a hole in the heart of the city.
The project site is located at the corner of NE 8th Street and Bellevue Way. Across Bellevue Way is Kemper's 1.3-million-sf Bellevue Square mall. Across NE 8th Street is Bellevue Place, Kemper's 500,000-sf office and retail development that wraps around the Hyatt Regency Bellevue.
When the acquisition of Lincoln Square was announced as pending earlier this year, Kemper Development chairman/CEO Kemper Freeman Jr. said his company is "uniquely qualified" to develop the project given its neighboring developments. "We understand what a project of this magnitude requires and are prepared to take on the challenge," he said.
The company became more prepared this week, hiring former Bellevue mayor and city council member Ron Smith as vice president and general manager of the Lincoln Square project. Smith, more recently a developer and investor, is now responsible for all aspects of its management and development. Smith's development and investment experience includes 12 years as co-owner of the Kirkland Building Company, a residential building and land development firm. Smith spent two years after that forming Solstice Investments, a commercial real estate investment and asset management firm based in Bellevue.
The original building permits for the project expired in February due to 180 days of inactivity but were promptly reissued by city planners, this time with approval to develop the project in phases rather than all at once. The permits were immediately reissued because Lend Lease, knowing it wouldn't likely restart construction in time, had re-applied for them in October. With the new permits, Kemper Development has until next February to restart construction and three years to complete the project.
Work to complete the parking garage and develop the retail podium and the residential/hotel tower is anticipated to start in early 2004, with completion slated in fall 2005. Interest in the condominiums remains high with about 100 of the 148 units pre-sold. Kemper Development's Jim Melby told GlobeSt.com earlier this year that a pad for the office building will be prepared during one of the phases, with the office building itself being delivered into a market "more receptive than current conditions."
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