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

Snohomish County manufacturers sew 27,000 masks for nurses

Two Mukilteo businesses, and others around the county, have shifted their focus to fight COVID-19.

Most building sites have shut down, but there are exceptions

The state Senate Republican Caucus has asked Gov. Jay Inslee to lift the ban on residential work.

During this outbreak, let’s be warriors

Amid the coronavirus pandemic, it’s time for a renewed focus on making a difference.

Trump uses wartime act but GM, Ventec are already moving fast

The carmaker is working with the Bothell company to produce up to 10,000 ventilators per month.

Comments welcome on the proposed Lake Stevens Costco

The company’s permit to fill wetlands is under review. Public comment is open until April 12.

Trump stops deal for Bothell’s Ventec to produce ventilators

The project would have had the company producing more than 1,000 ventilators a month.

As Boeing shuts down, an employee’s family is left to grieve

To his family, Elton Washington is much more than a statistic in the growing COVID-19 pandemic.

Paine Field passenger volume plummets; flight changes likely

Despite a 68% drop, the passenger terminal’s owner expects to weather the coronavirus crisis.

Inslee signs the law repealing a Boeing tax break

The move, which the aerospace giant sought, aims to resolve an international trade dispute.

Inslee signs law allowing sharing of sales tax with tribes

It also helps end a legal fight over taxes involving the county, the state and the Tulalip Tribes.

Boeing plants here to close; infected Everett worker dies

To the relief of anxious employees, the company said it will shut down factory operations for two weeks.

Not everything is closed as businesses evolve to stay alive

Places are offering curbside pick-up and online orders and are banding together to draw wary customers.