HarborsidePlace project put up for sale by developer

Published on Thu, Apr 27, 2006 by Tara Nelson

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Harborside Place project
put up for sale by developer

By Tara Nelson

Plans for the proposed Harborside Place have been postponed after developer Rick Osburn put his 19,000-square foot condominium building up for sale.

With only the foundation built, the mixed residential/ retail project, located at 715 Peace Portal Drive, stands as evidence of the rising construction material costs that Osburn said rendered the project more expensive than originally planned.

“There’s been all kinds of stumbling blocks,” he said. “We got caught up in an rapidly increasing construction cost climate, which is on par with the other costs that are increasing across the board. So what began as a project that penciled out, over the course of a year we couldn’t justify the cost to pay for the project. There’s just not enough high value space created to justify the expense.”

The original Harborside Place plan calledfor a four-story mixed-use building with underground parking, basement offices, ground level retail spaces and nine condominium units ranging from 844 to 2,200-square feet. A 2,200-square foot penthouse was planned for the fourth floor.

Osburn said he had applied for a conditional use permit to expand the fourth floor from a single penthouse into a full-floor, multi-unit build-out, which, he said, could make the project more economically feasible. At the time, there was no language for such a permit within the city’s code.

“Not only is the top floor the highest value but it’s also the least expensive to build,” he said. “You’ve taken space that would have otherwise been consumed at pedestrian level and put it on top of a building where it has the least impact on the public.”

Earlier this year, Osburn, along with Blaine city manager Gary Tomsic, spearheaded a campaign to change the language of the city zoning ordinances that would allow for conditional use permits in the downtown business areas. The amendment, which passed 6-1 by city council members in March, could allow developers more flexibility in their development projects.

One of the clauses in the new ordinance allowed for a possible increase in building height within the central business district as long as the developer can prove that improvements will minimize view obstruction, add architectural detail to the roof line, and include site improvements such as view corridors or other open space that benefits the community, along with other requirements.

Even with the new ordinance, Osburn said the time it took to pass has created lost revenue and diminishing value for his project and did not apply for the permit.

“I think the city has done a good job but there’s just so much red tape,” he said. “Gary Tomsic was instrumental in accommodating our request to get that language on the books and I think that was significant because it was written to help stimulate some new proposals in the downtown business areas. It was passed finally but it was just the time that it took to get it done.”

Tomsic, however, disagreed, adding that only three months had passed from January 23, the time he was originally notified that a group of property owners were concerned about downtown building regulations, to March 13, the time when the amendment was approved.

“To a developer, any amount of time is too long,” he said. “As far as government works, it didn’t take long at all. We didn’t even put the ordinance through the planning commission. Rather, we just took it straight to council, had a couple of public hearings and got it through.”
Regardless, Tomsic said he was disappointed that Osburn could not make the project work for him.

“It is unfortunate that Rick and Doug have elected not to do their project in Blaine,” he said. “It was a great building at a prime location and many of us were hoping that the project would be the catalyst for additional development in our downtown.”

Tomsic said that while increasing construction costs and poor soil conditions have been a problem, he did not understand why Osburn chose not to apply for a conditional use permit after the changes to the city’s zoning language were passed.

“The council amended the city’s code to allow for conditional uses and his project was one that we had hoped would apply however, he has chosen not to do so,” he said. “We are hopeful that Rick and Doug find a buyer that has been as cooperative, professional and easy to work with as they have been.”

Although he would not mention names, Osburn did say a private developer has already agreed to build Harborside Place as originally permitted if that developer can make the project profitable.
Harborside has already obtained the building permit for the original proposal, Osburn said.

Osburn said the developer is scheduled to complete a cost feasibility study by April 26 that will determine if he can make the project go.

In the event the project doesn’t add up, he said Harborside LLC will maintain ownership of the project and apply for a conditional use permit from the city to expand the top floor.

In the meantime, Osburn said he is looking forward to the possibility of his vision being built – even if by another developer.
“I hope he can make it pencil,” he said. “I hope he can.”

Osburn also said he will continue pursuing the development of a second property at 865 Peace Portal Drive, near Bella Marina. Osburn said he is looking at a mix of San Francisco-style rowhouse design and new century design for that project.

“We intend to give the public lots of open space,” he said. “We also intend to get some additional height out of that and we’re not talking about a 20-story building here.”