Children's, condo complex make tentative deal for sale

Children's Hospital and Regional Medical Center has reached a tentative deal with neighboring Laurelon Terrace condominiums to buy the entire complex for $93 million.

The deal would allow Children's to expand into the 6-acre site along Sand Point Way over the next 20 years. The hospital started buying individual Laurelon units in October and has bought 22 of the complex's 136 condos so far; five more purchases are pending.

Owners would get about 2.5 times the value of their units, with payouts ranging from slightly more than $614,000 to nearly $964,000.

The premium is necessary to get approval from owners who do not want to move, and worry about finding a new home, said Peter Buck, a Seattle lawyer representing Laurelon. "We need to give them the incentive to do it."

Owners who already sold to Children's would get the difference between that price and the new deal. Children's would have the right to take possession of the complex Jan. 1, 2010.

Laurelon's board presented the proposed deal to owners at a closed meeting Wednesday evening, Buck said. "Not one person spoke against it."

The board plans to take a straw vote of owners next week and would schedule the formal vote in a couple of months, Buck said. The hospital is paying 75 percent of Buck's fees -- a common arrangement when a large entity is negotiating with a smaller one.

Jan Kirkwood, a Seattle lawyer who grew up in Laurelhurst and rents out the Laurelon condo that has been in her family since the 1970s, was a consultant for the board in the negotiations.

"I think it's good for the Laurelon owners, I think it's good for the Laurelhurst community and I think it's good for the hospital," she said. "It's a good solution to the friction over there related to the hospital's expansion."

But Leonard Gost, an 83-year-old who has lived in Laurelon since 1996, called the deal "lousy" -- not necessarily because of the money.

"I'm tired of moving," he said. "It's beautiful out here. I like it. I've got open air."

Allene Caddy, who has lived at Laurelon Terrace for 30 years, also does not want to move.

"All the new buildings have nothing that compares to this," she said, noting Laurelon's hardwood floors and plaster walls. "The newer ones, unless you find a good one, are really shoddy."

But Caddy, who agreed that everyone who spoke at Wednesday's meeting seemed to support the deal, didn't see a better alternative.

"It's a very fair offer," she said. "I'm resolute that I'm going to have to move. If not, then I'll sit here and the hospital will continue to pick us off one at a time."

Resident Christine Barrett, who does not want to sell and previously predicted a vote would be close, said the proposed price changed many minds.

"They fell like matchsticks last night," said Barrett, who plans to abstain.

There are still some hurdles to the sale. First, the state Legislature must approve a legal change to allow such a sale with approval of 80 percent of the owners. The state changed this requirement from 100 percent to 80 percent in 1990 but did not apply it retroactively to existing complexes such as Laurelon. At the Laurelon board's request, the House already passed a measure applying the lower requirement to all complexes, and the Senate is now considering the bill.

The deal then would depend on a successful vote. The city also must approve the Laurelon site as part of Children's growth plans. City officials and a citizen advisory committee are reviewing the plans that would allow the hospital to more than double the number of beds and building sizes on its main campus over the next two decades.

Buying Laurelon sooner could allow Children's to expand with fewer disruptions and less impact on neighbors, and create better access to the expanded complex, said Lisa Brandenburg, the hospital's chief administrative officer.

Suzanne Petersen, Children's vice president for external affairs and guest service, said possibilities include eliminating proposed 45th Street entrances, which neighbors fear would bring more traffic into residential areas, and moving the tallest buildings downhill to lessen their visual effect.

Petersen also noted that the city would require Children's to make up for lost affordable housing as part of the process. She said the deal could ease the opposition many Laurelhurst residents have expressed to Children's plan.

But Laurelhurst Community Club Board President Jeannie Hale remained critical.

"There has been a suggestion that Children's might consider eliminating hospital entrances on residential streets, but there is nothing in writing," she said on Thursday.

Hale wondered whether the lost affordable housing could be replaced in Laurelhurst, saying: "There are few areas, if any, that could accommodate a garden townhouse development with 136 units."

Barrett said increased traffic from Children's expansion and the loss of the Laurelon housing would ensure continued neighborhood opposition, although most Laurelon residents thought the sale would help.

"Ninety-nine percent of the people in the room last night truly believed that they were saving Laurelhurst," she said.

HOSPITAL EXPANSION

For more information about Children's Hospital and Regional Medical Center's proposed expansion, go to masterplan.seattlechildrens.org.

STATE LAW CHANGE

The Legislature changed the requirement for sale of an entire condominium complex from 100 percent of owners to 80 percent as of July 1, 1990, but did not apply this change retroactively to existing complexes. At the request of the board of Laurelon Terrace, the Legislature now is considering a bill that would apply the 80 percent requirement to all complexes. The state House has passed the measure and it is now in the Senate.

For more details, go to leg.wa.gov and search for House Bill 3071.