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Originally published April 22, 2013 at 9:32 PM | Page modified April 24, 2013 at 6:16 AM

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Can Seattle Central land old Beacon Hill landmark PacMed Center?

Seattle Central Community College is trying to win state support for a deal to occupy about half of the iconic, but mostly empty, Beacon Hill landmark popularly known as the PacMed Center — and it’s running out of time.

Seattle Times business reporter

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Seattle Central Community College is trying to win state support for a deal to occupy about half of the iconic, but mostly empty, Beacon Hill landmark popularly known as the PacMed Center — but it’s running out of time.

Since Amazon.com vacated the art deco-style building in 2011, it has been hurting for a tenant big enough to fill 13 floors totaling 205,000 square feet.

The building’s owner, the Pacific Hospital Preservation & Development Authority (PDA), also has been hurting: Money from leasing the building is its major source of funding for its grants to nonprofits that support charity medical and dental services.

If a tenant can’t be found soon, some worry the authority will hire a developer to convert the former public hospital on the 9.5-acre campus to tony apartments. Formally called the Pacific Tower, the 16-story tower at 2100 12th Ave. S.has sweeping views of the Seattle skyline, Elliott Bay and beyond.

Seattle Central wants to move its health training programs into the space if the Pacific Tower undergoes $27 million in renovations funded by the state — but the Senate and House must reach a deal, and the legislative session ends Sunday.

A 2013-15 capital budget approved by a state House committee earlier this month allocates $20 million for preparing the Pacific Tower for “community college health career training programs, offices for the department of commerce or other appropriate state agencies, and other nonprofit community uses.”

The House measure authorizes the state to sign a 30-year lease, including “an option to buy the property, if available,” with the PDA.

There is no companion measure in the Senate, however.

Under one proposal still being developed, the State Department of Commerce would hold the master lease and sublease space to Seattle Central and smaller nonprofits in the social-services field, according to people familiar with the matter.

“It’s a complex deal to lease a big building,” said Dan Aarthun, the Commerce Department official working on the proposal. “We’re trying to put ideas on paper.”

Jill Wakefield, chancellor of Seattle Community Colleges, said Monday that Seattle Central Community College and Seattle Vocational Institute would occupy five floors of the building.

The gaping vacancy at Pacific Tower is an opportunity not only to preserve the building’s original purpose but also to take the colleges’ current health-care training programs “to the next level,” Wakefield said.

Seattle Central and Seattle Vocational, currently offering two-year degrees, are creating four-year degrees in nursing and other health-care occupations in anticipation of shortages in the health-care workforce.

The community colleges and its nonprofit partners envision the Pacific Tower as a “Community Care Innovation Center,” Wakefield said, where they can develop new ideas for improving health care in the community.

Mark Secord, CEO of Neighborcare Health, the largest operator of community health centers in Seattle, said nonprofits like his have heard from the PDA’s board members and its executive director that a developer has proposed converting the building to apartments.

“It’s been represented to us that it’s a firm proposal, so the risk here is that they might opt for that given that it is something that is concrete,” Secord said.

He’s been told leasing the building to the group of college and local nonprofit tenants would bring the PDA an additional $1.5 million to $2 million in revenue annually.

Last year the PDA made about $306,000 in grants.

Its only tenant on the campus now is Pacific Medical Centers, a nonprofit primary and specialty-care physician network.

Rosemary Aragon, executive director of the Pacific Hospital PDA, didn’t respond to requests for comment.

The historical landmark began in 1933 as a U.S. Public Health Service hospital for servicemen and then for injured veterans.

In 1981, the community stopped a federal effort to shut the hospital down. Instead the federal government transferred the hospital to the locally controlled authority.

In 1998 the PDA signed a 99-year lease with private developer Wright Runstad, which borrowed $23 million to convert the former hospital into office space and subleased it to Amazon.

After the tech giant moved out in 2011, Wright Runstad was unable to sublease it and defaulted on its lease payment. The PDA has been running the space since Oct. 1 and trying to find a tenant to absorb the bulk of the space.

After the spring 2014 opening of the First Hill Streetcar line, commuters will be able to ride from the light-rail station in the International District to a stop near the corner of South Jackson Street and 12th Avenue South.

“You can walk four blocks south and you’re at the Pacific Tower,” said Steven Wood, managing director of Century Pacific, which has been marketing the building to prospective tenants.

Wood declined to comment on any prospective tenants, but said there’s no signed lease yet for the space.

Earlier this month, Paul Killpatrick, the president of Seattle Central, told the campus in a memo that the college had proposed moving its allied health programs, such as dental hygiene, nursing, respiratory, surgical technology and opticianry, into between 86,000 and 106,000 square feet of Pacific Tower.

The space vacated by the allied health programs in the college’s buildings would be remodeled for “much needed” additional classroom space, Killpatrick wrote.

Local nonprofits that might move into the remaining space, his memo said, are Cross Cultural Health Program, Neighborcare, Neighborhood House, Philanthropy Northwest, 501 Commons and FareStart.

However, he added, “everything is contingent upon the Legislature approving the capital funding for this project.”

While the city designated the building and site as a historical landmark in 1992, a developer could make alterations to it with approval from the city, officials said.

Secord said he can understand why the PDA, in the absence of viable alternatives, might opt for a developer turning the building into apartments.

That would “certainly be better than having the building stand empty, generating no revenue and not providing any substantial benefit to the community,” said Secord.

However, he added, “I think there’s a better alternative.”

Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com. On Twitter @sbhatt

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