NOAA Marine Operations
Kidder Mathews received the exclusive disposition assignment for this 8.5 acre Lake Union property, consisting of approximately 2 acres of uplands and approximately 6.5 acres of submerged land with 870 lineal feet of waterfront. This sale offering represented one of the largest single parcels ever brought to market on Lake Union-Seattle, WA. Included with this property were 2 commercial piers totaling nearly 2,500 lineal feet, a commercial wharf of approximately 370 lineal feet, and office and laboratory building measuring 17,100 sf and a 12,000 sf warehouse building.
The challenge of the assignment was to maximize the value of the property and to entice investors, developers and companies that plan on purchasing the site to pursue various approaches to value. The property valuation was greatly influenced by its end use. Such uses ranged from large waterfront parks funded by private donations to biotech laboratories, office developments, retail centers, corporate headquarters and even just land bank investors. Each potential purchaser struggled with the same unique issues relative to the zoning code. Although the code is fairly lenient as a heavy industrial site, the marine dependent overlay expressly prohibited any use that was not water dependent to occupy the site without a conditional use permit in place. In addition to the zoning code complexities, the City of Seattle was in the process of updating its Shoreline Management Act as required by federal law. The update would require that new development take place recognizing increased setbacks off the water line and numerous other new ordinances designed to protect marine habitat and limit development potential on the site. The property was exposed to over 40,000 accredited investors worldwide. Throughout an extensive marketing campaign, the listing team brought forth nine offers representing a $16 million delta in pricing. None of these offers met seller expectations for a variety of reasons. Offers ranged from straight over tackle purchases to partnerships and development structures with “preferential yields” and long-term payouts. Needless to say, it was frustrating for the sellers and listing team to stand by and wait for that one perfect buyer to step forth while promoting a continuous and multifaceted marketing campaign. This marketing effort yielded tremendous interest worldwide, however concerns for risk associated with the zoning code or new shoreline regulations proved challenging.
In order to add additional value to the site, it was decided the land on the northerly tip of the property should be sold separately so it could yield its highest value on a stand alone basis. A new tax lot was created and sold to Ride the Ducks of Seattle so they could build a private boat launch. However, this tax lot cut straight across the end section of the commercial piers and extended parallel to the former NOAA Marine Operations Center. Because this tax lot was immediately adjacent to the Department of Natural Resources land lease, it now had priority over this lease going forward. The listing team went back to market and secured another buyer, United States Seafoods. United States Seafoods had outgrown its corporate office building in South Seattle and needed a place to consolidate moorage for its nine vessel fleet and future boats. It was determined early on that this site would not work for United States Seafoods unless a boundary line adjustment was put forth allowing for the recapture of the piers that were previously sold to Ride the Ducks of Seattle. In order to successfully negotiate the proper boundary line adjustment, a new value had to be put on the land that would be sold back to United States Seafoods after the boundary line adjustment was recorded. After extensive due diligence and investigation, including complete environmental core sampling and well monitoring, depth soundings, acoustic testing, land-use and entitlement investigation, traffic studies, permit compliance, zoning code compliance, and a plethora of other investigative work, the newly selected buyer was finally ready to close.
The former NOAA Marine Operations Center Pacific was transformed into the new United States Seafoods corporate headquarters and stands adjacent to the newly proposed Ride the Ducks of Seattle Lake Union launch ramp.