Defining Moments: Lincoln Square [December 2016 Breakfast Recap]

That which doesn’t kill you, makes you stronger! Attendees at the December Breakfast meeting for NAIOP were treated to a vivid example of this at our Fifth Annual Defining Moments program.

Outgoing President John Teutsch began the meeting with a very nice rendition of Silver Bells. This was John’s last Breakfast meeting as President and we thank him for his great service and singing voice! John also thanked our sponsors, Venture General Contracting, GLY and The Broderick Group. We thank them for their continuing support.

The Seattle area NAIOP chapter is now the fifth largest in the United States and growing the fastest. Steve Cory presented the new member list, highlighting our 850th member, who won a free breakfast meeting registration. We also heard about the Developing Leaders and the mentorship program.

Tom Abbott, Managing Director with Colliers International, moderated the meeting. Tom introduced the topic – Lincoln Square - and we were honored to hear from two of the prime movers on this project: Richard Leider, Principal of Trinity Real Estate and Jim Melby, President of Kemper Development.

The Lincoln Square project began in 1998 with a proposal that included an office tower, a hotel, residences, retail and parking. The City of Bellevue required a concurrent build of all of these elements under a single permit. The parking garage and a few floors of the elevator core were built prior to 2001. Then, things took a turn! The prime tenant for the office tower fell victim to the dot-com bust, and as most of us remember, a number of other prospective tenants followed. Then came September 11 and the hotel project lost its luster.

The investors and lenders had a real problem on their hands. They reached out to Richard and Jim to see what could be done. With Jim’s background in retail development and Kemper Development’s physical proximity to the project site, he was a natural to review the project. Jim felt that the retail elements needed a rework.

Richard had been contacted by the investors and lenders to bring his expertise to the table. He analyzed the project and reached the difficult decision in the spring of 2002 that the it needed to be put on hold. This was the first of Richard’s Defining Moments. Jim met with the principals of the project and was asked to give advice. He formed a relationship with Lend Lease, the main investor.

Jim’s experience with retail really helped during this time as he was convinced that Lincoln Square could not be “Bellevue Square Lite.” Through the relationship with Lend Lease, Kemper Development was invited to bid on the project through an auction process and although Kemper’s bid was in second place, they were selected to take over the project in 2003. The rest is history. Lincoln Square is very successful and Phase II of the project is being built currently.

Jim related that for him the Defining Moment was the dinner that he had with Lend Lease in August of 2002. He recognized the severity of the issues facing the investors and through skill and hard work put his company into a position to pick up the pieces and create a success.

We are indeed fortunate to have industry leaders like Richard and Jim impart the lessons learned through this process. To borrow another old saying, those that do not learn from history are doomed to repeat it. The attendees of the breakfast got a one hour crash course in how to respond to the crazy world we call development!

Read coverage of this event:

Geekwire: How a tech bust almost killed one of North America’s biggest real estate projects — and what saved it

This article was written by NAIOP Washington State and Programs Committee member Edward Scherer, Account Executive, Avidex Industries, LLC. 

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