"A year ago, the public-private partnership for the convention center hotel made sense because there were no other markets," says Ivanoff. "Now that the office market is back, not being involved in the public-private venture makes the most sense."

In place of the convention center hotel, the company now proposes to develop a 190,000-sf office tower atop a 90,000-sf open-air retail center. Also in the first phase would be a 430,000-sf office building and with that another 35,000 sf of retail. Both projects would front Northeast 8th Avenue.

The goal is to start excavating for the underground parking next fall, says Ivanoff. By that time, Ivanoff says he would expect to have the retail for that phase fully pre-leased and the office for that phase between 30% and 50% pre-leased.Subsequent phases of the superblock development would include two additional office towers, each about 400,000 sf, and another 110,000 sf of retail. A small boutique hotel also could be part of the project, either in the first phase or the second phase, says Ivanoff. All told, the estimated value of the development upon its completion is in the $500-million range.As for the convention center hotel, Ivanoff says the city could still develop the hotel on a publicly owned parcel on the NE 6th Avenue side of the convention center. "It could be a great solution for them," he says. "I'm sure there are qualified national hotel development firms that would listen."The would-be convention center hotel is a key piece of the proposed $62-million expansion of the convention center. The Port of Seattle, which derives 25% of its revenue from the Eastside, has proposed a $25 million investment in the expansion, but has said the investment wouldn't make sense without a convention center hotel to support it. Bob Wallace, a developer and a board member of the Bellevue Convention Center Authority, which runs Meydenbauer, says not cutting a deal with Schnitzer is not a life-threatening setback. "There are three other sites that would be acceptable for a headquarters hotel and there is a palpable demand for more hotel rooms," he says. "Usually, when a deal wants to happen it ultimately happens, and when demand exceeds supply there is usually somebody who steps forward with a plan to meet that supply; I'm optimistic that ultimately will be the case."