Children's Hospital agrees to buy condos

The board of a 136-unit Laurelhurst condominium has struck a tentative deal to sell the entire complex to neighboring Children's Hospital & Regional Medical Center for what backers say is more than 2 ½ times its market value.

If the $93 million sale of Laurelon Terrace goes through, it would give the hospital room to expand while providing condo owners with a windfall.

Owners of one-bedroom units that have been selling recently for an average of $241,000 would get more than $614,000, said attorney Peter Buck, who represented the Laurelon Terrace board in negotiations with Children's.

The hospital would pay $729,000 for two-bedroom units that have been selling for about $287,000.

But the sale isn't a done deal. It hinges on favorable actions by both the state Legislature and Seattle City Council. And it faces opposition from neighborhood groups concerned about Children's ambitious expansion plans.

Buck said the sale, even if approved by the board, wouldn't close for at least six months. Lisa Brandenburg, Children's chief administrative officer, indicated it's unlikely to happen before next year.

She called the tentative agreement "a very exciting opportunity ... this could be a win-win for everyone."

Laurelon Terrace, built in 1949, is just west of the hospital's campus.

Children's has bought more than 20 units in the 19-building complex in recent months. Buck said the condominium's board approached the hospital about six months ago, thinking units might be worth more to the hospital as a package deal.

The tentative agreement was presented to owners Wednesday night. Several people who were present say no one spoke against it. A straw vote is scheduled Tuesday.

Jim Cole, who has lived at Laurelon Terrace for 20 years, said he supports the deal because it would provide money that older owners could use for retirement and younger owners could use to buy houses.

"Seattle has been kind of crazy pricewise, lately," he said.

The buildings are aging, Cole said, and fees have risen recently to pay maintenance costs.

But Lois Jones, 64, who moved into the complex four years ago, said she doesn't want to sell.

"Everything I'm interested in is here," she said. "I just don't see anything out there that's comparable."

Under current state law, each owner would have to agree to dissolve the condominium for the sale to proceed. A bill, backed by the Laurelon Terrace board, that would reduce the requirement to 80 percent, was approved Monday by the state House. A Senate committee is scheduled to consider it Tuesday.

The sale is contingent on that bill passing, Buck said. Based on the feedback Wednesday night, "certainly 80 percent of the people are going to want to vote for this."

The deal also depends on City Council approval of a growth plan for Children's that would allow the hospital to expand onto Laurelon Terrace's six acres. That isn't likely before spring, Brandenburg said.

Children's plans to add 1.5 million square feet to its 900,000-square-foot campus over the next 20 years to meet anticipated demand. Expanding onto the Laurelon Terrace site could happen more quickly and be less disruptive to neighbors than other alternatives, Brandenburg said.

But Jeannie Hale, president of the Laurelhurst Community Club, said the proposed deal doesn't assuage neighbors' concerns.

"This part of town was not intended for the kind of growth that Children's is proposing," she said.

The sale also would eliminate relatively affordable housing, Hale said.

The Laurelhurst Community Club and other Northeast Seattle community organizations are working to block the bill that would loosen condominium-dissolution rules.

Children's would pay all closing costs and Buck's fees under the proposed deal. Owners who have already sold to the hospital would get the higher prices retroactively. Children's would take possession of the property no earlier than Jan. 1, 2010.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com