The city of Bothell has repurchased four parcels of land adjacent to city hall from 360 Hotel Group after they failed to begin construction on two hotels in June. (Aaron Kunkler /Bothell-Kenmore Reporter)

The city of Bothell has repurchased four parcels of land adjacent to city hall from 360 Hotel Group after they failed to begin construction on two hotels in June. (Aaron Kunkler /Bothell-Kenmore Reporter)

Bothell buys back proposed hotel land

A development deal to bring two hotels to downtown Bothell has fallen through.

Bothell City Council has approved a settlement agreement with a development company to repurchase four lots the city had sold them in 2017 after Bothell Hotel LLC failed to begin construction this summer.

In the settlement, neither the city nor Bothell Hotel LLC, which is owned by 360 Hotel Group, admitted liability for the development plans falling apart. The city re-purchased the property for $1.27 million, the price it was sold for, and additionally paid the developer a settlement fee of $865,000 to avoid the costs of litigation. The city sold property adjacent to Bothell City Hall to 360 Hotel Group in 2017 to build two hotels as part of the city’s downtown development plan.

Bothell staff notified 360 Hotel Group on June 20 of this year that it believed since the company had failed to begin construction by the deadline, the city was justified in using its repurchasing option. However, in July, the company said it disagreed and that the city did not have a right to repurchase the property and filed a notice of claim with the city. It additionally drafted a complaint to be filed in King County Superior Court.

The disagreement was mediated and an agreement was reached for the city to buy back the property. In emails obtained by the Reporter, Shaiza Damni and Alif Nurani of Bothell Hotel, LLC wrote the city on July 12. The company’s representatives expressed concerns about Bothell’s decision to begin the repurchasing agreement. In it, the company wrote that Bothell had failed to notify the state Department of Ecology of the sale until Jan. 31, 2018, when the company said the city was supposed to notify them 30 days prior to the sale.

“Because it was not raised and addressed before our transaction closed, it has caused significant (but not insurmountable) complications. For example, our lender (which had completed its environmental review in December 2017) has now reopened the matter,” the letter read.

The company had not responded to a request for comment on this story by the time of publication. This story will be updated if 360 Hotel Group responds.

Also in the email, the company said they had requested to lease nearby lots for a staging area, but had not made it a condition of their development agreement. City lots EFG are currently undergoing an environmental cleanup.

In previous coverage it was discovered that the developers asked for a six-month extension for construction that was approved by council. Construction was supposed to begin by June 15 of this year. However, 360 Hotels still hadn’t received all the necessary permits by that date. A representative of 360 Hotel Group said during a July council meeting they had spent $3 million on the project and would be ready to start construction on Sept. 1.

It is unclear what will happen to the property now. A press release from Bothell stated that the city will begin looking at what to do with the land beginning early next year. The property was purchased by the city as part of a downtown development strategy. The city has been selling off parcels in recent years to developers. This has included bringing in McMenamins Anderson School, realigning SR 522 and implementing mixed-use development requirements downtown.

If the hotels project had progressed, it would have built a six-story hotel next to a five-story hotel adjacent to City Hall that would have offered around 190 rooms. The hotels would have been a Mariott SpringHill and a Marriott TownePlace along with a drugstore and commercial space.

This story originally appeared in the Bothell-Kenmore Reporter, a sibling paper of The Daily Herald.

Talk to us

More in Herald Business Journal

‘Better with Boeing’ campaign aims to keep 787 assembly here

A new marketing effort hopes to persuade the company to keep Dreamliner work in Everett.

Panel blasts Boeing, FAA for ‘horrific culmination’ of failures

Investigators found that the company had a financial incentive to avoid more pilot training.

An update: We’re proud and humbled by our readers’ support

The Daily Herald investigative fund has grown, and now we’re working to expand environmental coverage.

Commentary: The 737 Max debacle won’t be the end of Boeing

The plane may actually be the bright spot in Boeing’s airliners business.

Marysville offers another round of CARES Act grants

Funds are available for those who need help paying for housing or business expenses amid COVID-19.

Port again wins millions in grant money for mill site revamp

The Port of Everett successfully reapplied for federal funding after losing $15.5 million last year.

737 Max engineer didn’t know details of flight control system

The program’s leaders only assumed pilots would react differently to the triggering of the MCAS.

Everett company faces $230,000 fine for safety violations

State inspectors allege that Chilos Builders exposed workers to hazards at area construction sites.

Unemployment system overwhelmed by users and new claims

The state Employment Security Department couldn’t process all the new information, leaving users frustrated.

Boeing 737 Max moves another step closer to returning

Test flights were performed from Vancouver to get around coronavirus-related U.S. travel curbs.

Light rail’s Lynnwood Link inches forward, with massive beams

The massive columns and girders that will hold the track are popping up along I-5.

What slowdown? Amazon seeks to hire 33,000 people

It’s the largest number of job openings Amazon has had at one time.