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Riverfront Apartment Plans Nixed by Bellevue Committee

Plans for 180 new apartment units on along Bellevue's riverfront were denied last week by the city's planning and zoning commission.

"The city has systematically tried to drive multifamily rental owners out of business with fees and incentives and then we're going to turn around and approve one hundred or two hundred more apartments to the city?," asked commission member George Rasmussen. "That particular location is a premium location and we should be trying for a premium product since there are so few waterfront properties available."

The location of the proposed apartments along with what the original plans for the site were prompted five of the commission's seven members, including Rasmussen, to oppose the development.

The development of Harbor Greene has included several different visions since it was first proposed in 2002 when sixty-three condominiums were to be spread across three five-story mid-rise residential buildings near sixteen three-story townhomes and one two-story retail building. In 2004 the plans were adjusted to include the construction of 108 condos in three buildings along with a seven-story office building and two restaurant pads. 

In 2004, the first phase went up, with more than thirty condos in one building and three years later a commercial phase was developed, both near the riverfront north of Fairfield Avenue.

Then two things happened: the economy and real estate market tanked, and Bellevue adopted its strict form based code, an effort at spreading its historic architectural character into other parts of the city, particularly where new developments are involved.

Suddenly there was no market for condos.

In 2011, the Ackerman Group, Harbor Greene's developers, revised its plans to include 218 rental units in one five-story building. The planning commission denied the proposal in 2012, citing that the density and dwelling units far exceeded what was anticipated by Bellevue's comprehensive 2008 plan, it did not reduce traffic congestion per the form based code requirements, and did not preserve views of the Ohio River.

On Thursday, new plans were presented to the planning and zoning commission following a lengthy public hearing weeks before. Most of the public opposed the new plans, which included a four-story building with 39 units in a building on Fairfield Avenue, a five-story building and 124 units and two townhomes on Lafayette, and fifteen units in a four-story building on Harbor Greene Drive.

Those changes reduced the density from 2011's plans and increased on-site parking, developed a parcel along Fairfield Avenue, and preserved the view to the river down Berry Avenue. 

Zoning Administrator John Yung presented his findings to the planning and zoning commission and said it could approve the plans with the revisions as is, or approval the plan with revisions that would include revision to the Fairfield Avenue building to conform to code and include retail space, allow an easement for the development of Riverfront Commons, and allow review by the Historic Preservation Commission.

The planning and zoning commission went instead with option three: full denial.

"The doubling of the number of residential units, as proposed, is an unreasonable change to the original design and quality," said Jim Dady, a member of the commission. He is convinced that there is a market for high-end condos in Bellevue.

"We would have to take on faith the developer's representation that the reason the project cannot be built out as condominiums as originally approved is because the market has changed and that condominiums aren't selling," Dady said. "All around us, evidence is contradictory." He cited two headlines in local media that called the high-end condo market "sizzling" and pointed toward a development in Cincinnati's Hyde Park where some condo units recently sold for $2 million.

"In our own city, in a location not as advantageous as this one, Water's Edge sold out in short order while we've been waiting for a decade for this applicant to finish what we approved."

Rasmussen agreed. "How are we to know that a year from now or five years from now that it's not premium property again and people will be begging to get single family homes or condos and we will have killed an opportunity to probably make a lot more money for the City of Bellevue," he said.

In a 5-2 vote, members Adam Amann and Sean Fisher were the two members who voted against the full denial. "I feel that this development would bring the diversity to this city, bring people to the Avenue, to the shopping, food, whatever the case may be," Amann said. "If the development doesn't go through, it could be a dagger in the financial well being of our city and hard to recover from."

Numbers provided to The River City News by Bellevue City Administrator Keith Spoelker show that the city would gain financially from the apartment development. The original plan would have brought in over $6 million for the city over the life of the 30-year bonds used at the beginning of construction. With the current situation of just one completed condo building, the city would bring in substantially less at $1.7 million. The apartment proposal rejected Thursday would have been worth $4.2 million to the city according to Spoelker's forecast. If the city waits an estimated ten years for a full condo market recovery, the city would bring in $1.9 million.

Spoelker is also concerned that the developer could end up suing the city. Because the city's regular attorney represents the developer in other cases, Bellevue has hired outside counsel during this process at $250 an hour. Thursday's meeting lasted two hours. Litigation could drive a legal bill up into the tens or even hundreds of thousands, Spoelker said.

Meanwhile, residents of the completed building at Harbor Greene have already started litigation and are in the process of a settlement agreement about which none of them is permitted to speak currently. Two residents, Mr. and Mrs. Bruce Ross, have not signed on to the settlement and have hired attorney Mark Guilfoyle to represent them.

"We're concerned that city staff is looking for a way to give in to the developer," Guilfoyle said. He predicts a traffic nightmare if the apartments are approved along the busy Route 8 corridor. "You're really going to change the character of that neighborhood down on the river and Bellevue is not going to get what it bargained for in the development agreement. Promises were made and there is a big difference between fifty to seventy units that are owner occupied and 190 apartments. There's a lot of concern with that."

Guilfoyle also discounted the city's financial concerns. "I think that's a red herring, quite frankly. It appears to me that they can certainy afford to hold the developer's feet to the fire and right now the development is in default on making payment in lieu of taxes but yet the city hasn't done anything to go after the developer to get that money," he said. "It seems like they're crying wolf to say, we have to do this or else."

"We think the position of the city ought to be to enforce the agreement you have. The developer owes you money now. Go after him instead of trying to go for a drastic change that long-term is going to have incalculable negative effects on the city."

Yung, the city zoning administrator, explained Thursday that the developer agreed to plat the units as condos so that they could possibly be converted to such in the future. As apartments, some of the units would go for as high as $1,500 a month.

Spoelker said that today's renters could become tomorrow's buyers and could choose Bellevue after a possible positive experience at Harbor Greene. "At some point, these people may want to buy a house. Have you looked at some of our housing stock?," he said.

But that's not what Guilfoyle's clients are concerned about. "They live in a building that has thirty-six high-end condos in it and they were one of the last, if not the last, to buy in that building and when they bought the condo - and this is not cheap - these are high-end - they bought into not only buying the condo but buying the development itself and the promise to build two more buildings that looked exactly like the building they were going to move into. They looked forward to being neighbors with seventy-two other owners, people with skin in the game."

"We appear to have this rush to give (Ackerman) what (it) wants and we need to slow a little bit," Guilfoyle said. "If you want to spend all your chips on an apartment building on the riverfront, in our view, that's a miscalculation."

Spoelker said the city is exploring additional options on how to move forward. It is possible that there will be discussion on the issue at Wednesday's city council meeting.

Correction: An earlier version of this story indicated that there would be 190 units instead of the correct number of 180 and also neglected to include the appropriate heigths of the proposed buildings. Changes have been made.

Written by Michael Monks, editor & publisher of The River City News