A Hilton Garden Inn could be built in 2021 at the city of Kent’s Naden property just north of Willis Street and east of Highway 167.
City staff reached a tentative agreement with representatives of Boise, Idaho-based Braintree Hospitality to sell 2.2 acres on the south end of the property for $2.6 million so the group can build a four-story, 136-room hotel on the vacant property, according to city documents.
The City Council’s Committee of the Whole heard a staff report about the sale at its Dec. 17 meeting. The council is expected to vote Jan. 7 about whether to approve the purchase and sale agreement.
City staff put several conditions on the sale, including Braintree will construct a new Naden Avenue along the east side of the hotel that will connect to a new right in/right out at Willis Street, which the developer also must build.
Braintree put down a deposit of $100,000 for the property, said Bill Ellis, city economic development manager, during his report to the council. He said the group still must receive franchise approval from Hilton, which it is expected to get early next year. It will take about a year for Braintree to get permits and do a feasibility study on the property.
Christina Schuck, assistant city attorney, told the council that the purchase and sale agreement contains protections for the city and developer and that it will take about a year before all the permits are gathered.
“It will tie up the property for at least a year,” Schuck said.
Braintree must hit certain milestones during that period to show it is moving forward with the project by submitting permits. The company also must receive approval for a Hilton franchise within 120 days after the purchase and sale agreement is approved or the city could terminate the contract.
Since Braintree must also build a road that will take additional time for permitting.
“We didn’t have the funding to do that,” Ellis said about city paying for the new street.
Ellis said talks began with Hilton about two years ago. The city needed approvals from the state Department of Transportation for the right in/right out access to Willis Street as well as a land purchase from Puget Sound Energy to make the property easier to sell.
A few council members raised concerns about whether the city will get to keep the $100,000 deposit if the deal falls through. City staff said that will depend, but that the amount paid upfront is typical in these type of deals.
“I’m very excited to see this come to the point where we are at,” Council President Bill Boyce said.
City staff is pushing the developer to build conference space at the hotel, possibly as much as 2,000 square feet to provide meeting space for up to 200 people.
“We need a room for 200 to gather in the downtown area,” Ellis said.
The city started to purchase property along Naden Avenue in 2006 with plans to build an aquatic center. But after spending $8 million to acquire properties, the council later abandoned that proposal because of the bad economy and high costs of a new pool. City leaders later worked out an agreement with the YMCA to build a facility on the East Hill that opened in September. The council agreed in 2016 to try to sell the Naden property.
Construction will start next year on a roundabout at Willis Street and Fourth Avenue South, part of a decision by the council to improve access to the Naden property and attract developers.
The city owes $1.04 million in principal related to debt issued for the Naden property, according to an email from City Finance Director Paula Painter.
“We expect we’ll use the proceeds from the sale to repay debt and any other expenses associated with the property,” Painter said.
City staff and a real estate consultant will continue to market the remaining 5 acres of the property. Ellis said the sale to the hotel developer should put the city in a better position to sell the rest of the property.