Brenneke's Downtown Hotel Plans Moving Along

SEATTLE-Paul Brenneke expects to start moving dirt here next spring for a $130-million luxury hotel project at Second Avenue and Pine Street in Downtown. The Portland, OR-based developer tells GlobeSt.com he is close to selecting a hotelier to joint venture with on the entitled project, and has begun tweaking the design to accommodate a planned extension of the city’s monorail line that clips a corner of the site. Brenneke’s application for the hotel dates back to 2000. As approved, the 21-story project includes an ultra-luxury hotel, penthouse and pied-a-terre condominiums, and 100,000-sf fitness club and spa. Brenneke says designs for the hotel could change further if it appears a planned increase in height for Downtown buildings continues to move through the approval with efficiency.”If it stays on track, we will probably go back and get a revised MUP [Master Use Permit],” says Brenneke. “If they get sidetracked, we probably will forego the opportunity.”With regard to a hotelier, Brenneke says a decision could be made within the next couple of weeks. In Portland, Brenneke recently sold a 50% interest in his Avalon Hotel and Spa to Grand Heritage Hotel Group, which entered the Portland market last year with the acquisition of the Governor Hotel in Downtown Portland, where it now keeps its headquarters.Brenneke conditionally sold the Downtown Seattle hotel site last fall to University Village developers Stuart Sloan and Matt Griffin in order to extract it from foreclosure proceedings. As part of the sale agreement, Brenneke held an option to purchase the property back from the duo for what they paid ($9.6 million) plus interest. Brenneke made it happen by partnering with the Benaroya Cos. of Seattle, which provided equity to repurchase the property rights for $10.3 million. The investment banking firm RM Watson Co. of Seattle also holds stake in the investment partnership. The investors’ loan is convertible to equity, but only if Brenneke does not buy them out, which is his plan.With regard to the monorail, Brenneke says after a long wait he now knows how much the Monorail Authority will be taking, if not how much they will be paying him for it. Condemnation negotiations are underway. If Brenneke doesn’t like the price, he may push it to the courts where a final decision will be made.