Time short on PacMed lease
Wright Runstad's 99-year lease on the landmark PacMed Center could end Saturday if back rent isn't paid.
Seattle Times business reporter
The quasi-public agency that owns the Beacon Hill landmark popularly known as the PacMed Center is set to terminate Wright Runstad's 99-year lease on the mostly empty tower in the next few days unless the Seattle developer pays about $380,000 in back rent.
The quarterly payment was due in early June. Wright Runstad's lease, negotiated in 1998, will end Saturday unless the firm pays up by the close of business Friday, said Rosemary Aragon, executive director of the Pacific Hospital Preservation & Development Authority (PDA).
The timetable is spelled out in the lease, she said, but the PDA's board also has scheduled a vote Thursday on a termination resolution.
It should be pro forma, Aragon said: "Our board knows pretty well what the situation is."
A Wright Runstad spokesman declined to comment.
The company subleased most of the 16-story brick tower in 1999 to Amazon.com for 12 years. The giant online retailer departed for South Lake Union last year, leaving Wright Runstad with no revenue to pay the PDA or lenders who provided $23 million in 2000 to turn the former hospital into an office building.
The developer still owed more than $20 million on that loan when it stopped making payments a year ago. The nonperforming mortgage was sold at a steep discount last month in an online auction, but both the price and the buyer's identity remain a mystery.
That new note-holder could take over the lease after Wright Runstad's rights are terminated, Aragon said -- the contract gives that entity an additional 30 days to pay the overdue rent. But the note-holder hasn't identified itself to the PDA, Aragon said, and the authority has no clue about its intentions.
One possibility: The new mortgage-holder, who presumably bought the note for pennies on the dollar, could sublease the tower to new tenants and charge lower rents than Wright Runstad, whose debt-service payments topped $181,000 a month.
While Wright Runstad has defaulted on its lease on the tower, Aragon said the company remains current on a second long-term lease on the north parking lot, where up to three office buildings could be built
The PDA, a nonprofit, uses lease revenues to fund access to health care for the uninsured and underinsured.
Eric Pryne: email@example.com or 206-464-2231