After years of planning and tens of millions in public investment, the City of University Place appears to have landed its first private tenant for the Town Center development: an Applebee’s restaurant.
The City Council on Monday night approved selling a 14,000-square-foot piece of one Town Center lot to Apple Washington LLC, which is connected to the nation’s largest Applebee’s franchisee.
After the unanimous vote, the meeting room broke out in applause and council members took a brief recess to pop open the bubbly – sparkling apple cider – to celebrate with those in attendance.
“This is the first of many steps to come,” Councilwoman Caroline Belleci said. “It’s been a long, hard-fought battle, and I think we will see the Town Center plan as designed and envisioned come to fruition.”
The city conceived the project in 2003 as a mix of condominiums, townhomes, office space and high-end retailers, floating names such as Williams-Sonoma, Banana Republic and Pottery Barn.
Applebee’s casual dining and midrange menu may not rise to that level, but veteran council members said Tuesday its arrival fills an important niche at Town Center. They said it will provide a new option in a community with a dearth of restaurants where patrons can sit down and eat late.
“On the surface, you could say this is not what they envisioned,” Councilman Gerald Gehring said. “Well, it’s just a small piece of the puzzle.”
Mayor Debbie Klosowski said the excitement that Applebee’s generates could initiate a “domino effect” of more retailers signing on.
Added Councilman Ken Grassi: “Food will get people to stop. The more choices that you can give them, you entice families, and they will stay for other uses.”
The city still has more than 12 acres ready to sell and develop. Officials said serious talks are under way for the sale of other properties, but they declined to discuss specifics, citing the sensitive nature of the negotiations.
The sale price for the Applebee’s parcel is $420,000. After paying closing costs and the broker’s commission, the city will receive in the “neighborhood of $395,000,” said City Attorney Steve Victor, who drafted the agreement.
The city intends to use the proceeds to pay down its debt.
“We believe that is market-correct based on a study of comparables; in fact, it may even be better than market-correct,” Victor said.
It’s unknown how much sales tax revenue the restaurant would generate for University Place.
“I think it’s a pretty healthy number, but I don’t want to speculate what that number is,” Interim City Manager Steve Sugg said.
The proposed 2011-12 city budget doesn’t anticipate any land sales or revenue from Town Center.
The city’s only obligation under the agreement is to extend a natural gas line to the property, Victor said. Once the sale closes, the buyer is obligated to start construction within six months.
Victor said the restaurant will open by fall 2011, at the latest.
He noted the restaurant will have a brick faade, updated awnings and lighting, and a planned outdoor seating area. It will have indoor seating for about 200 patrons.
The city has borrowed more than $40 million to begin development of Town Center as an inducement to attract private investment. The goal of the development is threefold: grow the city’s tax base, absorb future growth and provide residents a gathering place.
The city originally planned to complete Town Center in 2006, but its opening has been delayed repeatedly. The city has worked with four potential developers to bring private investment and retail tenants to the project, but the partnerships ended for various reasons.
Changing tack, UP officials now are striving to sell the 12 lots individually, intending to develop Town Center in a piecemeal fashion as opposed to all at once in recognition of the ailing lending and real estate markets. The city has hired a broker to help.
Work continues on the new civic building, which will house the future City Hall and library, served by an underground three-story parking garage. The library is scheduled to open Feb. 12.
Christian Hill: 253-274-7390