Deal is reached to sell property in Wallingford

King County has negotiated an agreement to sell a valuable Wallingford property to a developer who plans to build a three-story office building.

If the deal is approved by the County Council, Touchstone Corp. would pay just over $3 million, clean up underground contamination and relocate Metro Transit maintenance shops in exchange for the former "tank farm" near Gas Works Park.

Some neighbors have vowed to fight the deal, which would obstruct some views of Lake Union and end their hope for a community center on the site. But because Touchstone's offer is the best one received by the county, opponents may have an uphill battle.

Douglas Howe, president of Seattle-based Touchstone, said he expects to develop the 1.7 acres as technology offices or biotech research labs. Detailed plans won't be developed before the company gets input from neighbors, he said.

But preliminary plans submitted to the county show street-level retail space on North Northlake Way and North 34th Street, technology office space elsewhere in the building, benches on the sidewalks and a public viewing space of Lake Union.

"It's going to be a commercial site for obvious reasons," Howe said. "It's a commercial zone and it's contaminated. I would like to think it will be a significant improvement to the neighborhood from a tank farm, which has been an eyesore."

The property was used by Standard Oil of California to store diesel and home-heating fuel, and later by Metro Transit — now part of county government — to hold fuel for buses. Metro later removed the storage tanks and used the property for maintenance of bus stops and signs. Touchstone beat out the only other bidder, Wellesley, Mass.- and Walnut Creek, Calif.-based Renova, which proposed to pay up to $4.3 million for the property but didn't offer to build a new home for Metro Transit shops.

The Touchstone offer, including cleanup and replacement property on Aurora Avenue North, is valued at $11 million. The negotiated deal would limit buildings on the tank-farm property to 45 feet even if rezoning raises the allowable height, said Bob Thompson, a real-estate project manager for the county.

The county had not sought to sell the property before Touchstone made an unsolicited offer. Then, after Wallingford neighbors objected to the offer, the County Council last year called for purchase proposals.

County Councilman Bob Ferguson, who represented Wallingford before redistricting, was the only council member who voted against selling the property, saying it should remain in public ownership.

Bob Quinn, who lives just uphill from the site, said there is "no pressing need" for the county to sell it. He said the land would make an ideal community center.

"In the short term, $3 million in cash is nice for the King County budget," Quinn said. "In the long term, look what you're giving up for that."

But Seattle Mayor Greg Nickels doesn't intend to stand in the way of the property sale, said Deputy Mayor Tim Ceis.

"The city does not have a need to purchase that property," Ceis said. "It's an expensive piece of property, needs some cleanup, and if it needs to be cleaned up to a standard for public park use, that gets pretty expensive. There is just no funding for it."

Keith Ervin: 206-464-2105 or kervin@seattletimes.com