Lynnwood residents antsy over developer’s delay

Published 11:41 pm Thursday, August 6, 2009

LYNNWOOD — Despite the faltering economy, a lease agreement that is expected to bring the Edmonds School District hundreds of millions of dollars from a Texas-based developer appears solid, district officials say.

Still, some Lynnwood residents expected to see construction at the old Lynnwood High School campus and have questioned whether the deal will still go through.

Cypress Equities could have taken possession of the campus in July to begin clearing the land for a retail and housing development. Instead, the school district has maintained control of the old school while Cypress Equities continues preparation work, assistant superintendent Marla Miller said.

While the company can still back out of the deal, Miller said she doubts that will happen, and she expects Cypress to start paying rent by June 30, 2011 at the latest. If the company backs out, it would lose the $500,000 it placed in escrow, Miller said.

The lease on the site — about 40 acres across from the Alderwood mall — is estimated to bring the district $500 million over 99 years. Because the district will eventually receive a portion of the development’s appraised value, it works in the district’s favor to be patient while Cypress Equities looks for tenants, Miller said.

“It’s in our interest to have them build a development that’s going to be successful,” she said. “We’re supportive of them building a development that will be profitable in this economy.”

A spokeswoman from Cypress Equities did not return calls Thursday.

Bob Meador, a retired Lynnwood fire chief, is skeptical that Cypress will ever develop the property. Because the company is charged with destroying the old school, he fears it will sit around for years, collecting dust and becoming an eyesore.

“I think it’s bad,” he said. “I think they’ve got themselves a problem for the city. They’re going to have a gigantic vacant building.”

Meador also is concerned about the fate of the ball fields at the old Lynnwood High School. The city helped build the fields in 1979 and has long paid staff to maintain them and schedule games there.

The city was originally expecting to abandon the fields in early July, but because Cypress hasn’t taken possession of the land, city staffers plan to continue working on the fields through the end of the year, said Katie Anderson, assistant director of the Lynnwood Parks, Recreation and Cultural Arts Department.

The new Lynnwood High School is scheduled to open this fall on a site east of the city. Because of budget cutbacks, the city doesn’t plan to be involved with the fields at the new school, Anderson said.

In June, the school district announced that Cypress may change the details of its development, which was to include a mix of hotel and apartment rooms and retail space. Miller said Thursday that Cypress is talking with different potential tenants than it was initially, but she still expects a comparably sized project with a mix of residential and retail space.

The district is counting on $140 million from the lease and a few smaller land sales to pay to rebuild Alderwood Middle School, Madrona K-8 School and Lynndale Elementary School. The money also is needed to find homes for the district’s alternative education programs and other projects.

Those projects will wait until the school district starts receiving rent money from Cypress, Miller said.

State law forbids school districts from using lease money to pay for day-to-day school expenses.

While the economy has plummeted since Cypress signed a deal with the district in 2007, school board president Ann McMurray said she believes there is still a market for the kind of development Cypress is planning.

“The information we’ve got is that everything is still proceeding at pace,” she said. “Cypress is a big company. They have financial resources even in the economic downturn.”

Kaitlin Manry: 425-339-3292, kmanry@heraldnet.com.