Quadrant acknowledges build out slowdown
August 28, 2008
By Ed Farrell
After more than 20 years from its inception, Quadrant Homes’ development of Snoqualmie Ridge is well into its final phase, but progress is being measured at a far slower pace than anticipated.
David Dorothy, Quadrant’s vice president and general manager for Snoqualmie Ridge development, who has spent much of his career shepherding the firm’s massive development that has the potential of placing more than 4,000 units on the Ridge upon completion, confirmed that the economy is taking a heavy toll on new home construction.
“We’re definitely slowing down,” Dorothy said in an interview. “It’s all being driven by the economy, and everywhere is in a slowdown.”
Dorothy confirmed the opinion of Harry Oestreich, Snoqualmie’s city Finance Director, that “build out” on the Ridge - when the last homes will be constructed - will now be much farther down the road from the predicted completion date of 2012.
“That was always kind of a target,” Dorothy said of 2012, “based on what the market was doing.”
Dorothy would not, however, say he was in agreement with Oestreich’s new assessment that build out could possibly stretch as far as 2020.
Even a slowdown of several years would pale in comparison to the struggle Quadrant had to survive just to turn the first shovel of dirt on the Ridge.
It took nearly a decade for Quadrant and parent Weyerhaeuser just to get through what Dorothy termed the “entitlement,” or approval process for the massive project, including a hearing before the state Supreme Court.
With the first permits being issued in 1995, Quadrant has now sold off all of the parcels available in Phase I’s 1,350 acres.
Dorothy said once final construction is completed, Phase I will account for 2,268 residential units, including single-family and multiple-family residences.
Evidence of the economy-driven slowdown can be seen with progress in Phase II of the project, Dorothy acknowledged.
At 750 acres, Phase II carries the capacity for up to 2,150 more residential units, but that total will depend on whether Snoqualmie Valley Schools choose to utilize land that was dedicated for new school sites, Dorothy said.
All told, Quadrant agreed to provide 75 acres, spread over three sites, for future schools, Dorothy said, which represents just the tip of the ice berg of public improvements bankrolled by the developer.
The construction of Snoqualmie Parkway from I-90 to Railroad Avenue is the most visible of the infrastructure improvements provided the city by Quadrant.
Unseen are the miles of water, storm water and wastewater pipes, well fields and equipment to process the water residents drink and dispose off, that has been paid for by Quadrant.
Former Public Works Director Kirk Holmes once estimated the value of infrastructure improvements built by Quadrant and conveyed to the city as in the tens of millions of dollars.
There’s also the 50 lots, and infrastructure, Quadrant conveyed to Habitat For Humanity, as well as more than 20 parks, ranging in size from mini to community - the developer provided under the terms of its agreement with the city.
Quadrant is currently engaged in constructing a new sludge treatment facility that will be integral in the city’s wastewater treatment program.
Quadrant is also a major player in the city’s ongoing effort to build a community center on Snoqualmie Ridge.
The City Council authorized the placement of a $10 million bond measure question on the Nov. 4 ballot that would authorize the sale of bonds to be used to construct a 30,000-square-foot community center with an indoor swimming pool.
Quadrant currently holds more than $3 million earmarked for the new center, a unique twist on how the city and developer have come together to allow the Ridge to develop.
Typically, when mitigation or development fees are collected, they go to the city for control and ultimate dispersal.
Not so with the community center fees, which were collected on a per-unit basis but remain with Quadrant.
Dorothy said initially the collected fees were turned over to the city, but when much of the collected revenues were expended in failed efforts to gain voter approval for bonds, the developer reworked the agreement with the city.
The city’s failed bond bids “alarmed us,” Dorothy said. “The majority of the mitigation money was gone. So we modified the agreement with the city: We’d hold the cash until the city was ready to go.”
Snoqualmie City Attorney Pat Anderson has a different recollection of the circumstances, but acknowledged that the agreement does allow for Quadrant to retain control of the funds until the city is ready to move forward.
That Quadrant would hold the money was included in the initial agreement, Anderson said, and remained a constant through three various revisions of the contract.
Anderson acknowledged, however, that the failed “capital campaign” effort of 2001, with an expenditure of $207,000, was likely the incident Dorothy was referring to.
The bond effort, Anderson said, was “culminated in the disastrous defeat of the first bond issue in November 2002. Of course, it is easy to question with 20-20 hindsight exactly what the city got for that money. But there was no amendment of the agreement based on the poor results of the money the city spent …”
As before the failed bond effort, Anderson said Quadrant’s responsibility would be to pay the collected funds “as close in time as may be feasible to the city’s proposed expenditure of the funds.”
The deal has cost the city; instead of controlling the fees and collecting interest of the principle, Quadrant is only required to pay the amount it collected.
Still, Dorothy said Quadrant is committed to a community center. Homeowners on the Ridge have long been promised such a center will be provided “and it’s still very important to our customers,” he said.
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