See the Summary of the Hospital's Laurelon Offer
Worth noting: The Hospital requires full approval for its massive upzone of this residential parcel before it will close:
"Final approval of Children's MIMP [Major Institution Master Plan], including inclusion of the Laurelon property within the MIO [Major Institution Overlay] boundaries with development standards acceptable to Children's, by the City of Seattle (with exhaustion of any appeal periods)."In other words, the Hospital will pay only the market rate for Laurelon units up front. It will pay an added premium only after it has received full go-ahead for upzoning the parcel from residential to "Major Institution." And yet... city home owners do not own the zoning of their land, so they cannot guarantee changes to their zoning.
See the Laurelhurst Community Club's Preliminary Review of the Hospital's Offer
The Laurelhurst Community Club identified many important questions the proposal left unanswered for Laurelon residents (bold highlighting added):
"Will Laurelon owners really benefit from sale of their homes to Children’s, how long will they have to wait, and what will happen to their properties and values in the meantime?
Children’s has offered $93 million to purchase Laurelon Terrace—a price per unit close to three times the approximate current value. For a young family that would like to buy a house, older residents interested in moving into assisted living, and investor-owners seeking a profit, the offer sounds appealing.
But, there are many contingencies that make the potential windfall very uncertain and meanwhile leave Laurelon owners as hostages to Children’s plans. All of these contingencies would allow Children’s to back out of the deal.
First, the Legislature would have to pass House Bill (HB) 3071, a measure that would change the condominium law to require 80 percent, rather than 100 percent homeowner approval to dissolve the complex. If the bill passes and the other contingencies are not met, Children’s could back out of its offer to purchase the units at a premium price. This means that Children’s would have secured a valuable right to purchase the Laurelon Terrace complex but owners would not get the premium price cited by Children’s to get the law changed.
Second, the deal is contingent upon final approval of Children’s master plan AND the plan must include expansion of the major institution boundaries to include Laurelon AND must include development standards AND all of this must be to Children’s satisfaction or it does not have to pay. Some kind of master plan will eventually be approved. One question is whether the major institution boundaries will be expanded—something strongly discouraged in the Major Institutions Code. The other more important question is whether the development standards meet with Children’s approval. What if Children’s prefers 240 foot or 160 foot towers and that height is not approved? What if Children’s does not want to agree to the 75-foot setbacks as proposed or eliminating roadways through the setbacks? There are dozens and dozens of development standards and any one that isn’t acceptable to Children’s could be a basis for Children’s to back out of the deal. There is nothing in the summary of Children’s proposal to protect Laurelon owners.
Third, the City must approve street right-of-way vacations on terms acceptable to Children’s. This is yet another opportunity for Children’s to back out and an extremely complicated and contentious process.
Why are there no explicit protections in the deal for Laurelon property owners? What would happen to the homeowners who put a down payment on a house and are never able to realize the windfall? What about older residents counting on the windfall to afford assisted living who then don’t have the funds to pay? What if the whole offer falls through due to the many contingencies and residents can’t then afford to move, yet will be forced to? Where will they go?
Why weren’t owners told how long it could take for the many conditions to be realized? The master planning process according to the Major Institutions Code takes about 24 months. This means that final approval might not take place until July 2009. This does not take into account any possible appeals during this process, which could substantially lengthen the process. During this entire period, there would be uncertainty for homeowners.
It should be noted that Children’s is paying the bulk of the attorneys’ fees to make the deal happen. Does that make a difference as to how the deal was worked out? This is an important question for residents to ask.
Finally, where is the concern about the loss of affordable housing in the area? Manageably-sized moderate income apartments suitable for seniors in walking distance of shopping and services and on reliable bus routes are a precious commodity, especially in Laurelhurst. The preliminary draft environmental impact statement estimates a loss of 21 percent of the moderate income housing in the area if Children’s succeeds in its Laurelon takeover. While it is said that Children’s would be required to propose comparable replacement housing, that could be anywhere in the city and “comparability” is an elusive concept."
