Lease brings dual benefits

  • By Eric Fetters Herald Writer
  • Tuesday, October 30, 2007 10:45pm
  • Business

LYNNWOOD — A developer with big plans for the Lynnwood High School property has signed a development agreement with the Edmonds School District for the land near Alderwood mall.

That clears the way for Cypress Equities to move forward with plans to put a combination of retail space, multifamily residential units and potentially a hotel on the 40-acre property. Conceptual plans drawn up by Cypress last year envisioned a development that could cost nearly $250 million.

Because Cypress will lease the land below the mixed-use development, the property will continue to bring revenue into the Edmonds School District.

The district, meanwhile, is building a new Lynnwood High School at 18218 North Road, east of I-5. The school is set to open in the summer of 2009.

“We are thrilled to see this agreement with Cypress Equities come together. We look forward to having them as an integral part of our community,” Superintendent Nick Brossoit said in a written statement announcing the agreement’s signing.

Representatives of Texas-based Cypress could not be reached for comment Tuesday.

While Cypress waits for the school to move, it will have plenty to do. Prior to obtaining any building permits, the developer has to complete an environmental study of the site and obtain approval for a land-use change from the city of Lynnwood. Public hearings will be part of both those processes, according to the school district.

So far, Cypress’ early plans include a couple of large retail spaces, a hotel and a combination of small shops and upper-floor residences.

David Kleitsch, economic development director for the city of Lynnwood, said he was impressed with Cypress’ credentials when he sat on the committee that helped choose developers for the school land.

“They have a lot of experience with complex projects such as this,” Kleitsch said.

The development agreement and accompanying 99-year ground lease calls for Cypress to pay the school district an annual rent that equals at least 8 percent of the land’s appraised value, said Marla Miller, the district’s assistant superintendent. There are guarantees of increases at least every 10 years, and the district also could collect up to 10 percent of the net operating income generated by development on the property.

Other provisions include $1 million paid up front to the school district, as well as $1 million payments during years of construction on the new mixed-use project.

“I think this is a very significant deal for the school district and the taxpayers because this will continue to generate revenue for us,” Miller said.

She added there are contingencies allowing the school district to continue using the land past summer 2009 if needed, but everything’s “on track” with construction of the new school. New athletic fields also are planned at the North Road site to replace those being lost to Cypress’ development.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.

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