When Jerry O'Leary, 54 and retired, put down over $100,000 dollars toward a new million-dollar condominium in February 2005, he thought he was buying his way into an innovative downtown lifestyle proposed by Vulcan Inc. Vulcan Real Estate's $200 million 2200 project on two and a half acres at Westlake Avenue and Denny Way houses 261 units in three towers: Azur, Arte, and Aria. It's located near REI to the northeast and Denny Park to the northwest. The development combines high-end retail, a Whole Foods grocery, and the Pan Pacific Hotel into one self-sustaining community designed to redefine the possibilities for density in downtown Seattle. O'Leary was delighted by Vulcan's vision of a "first-class, high-end building."
However, on March 26, 2007, O'Leary filed suit in King County Superior Court against the developers after a series of delays and construction disputes left him with a condo that, according to the complaint, was "substantially [different] from the scope, nature, and extent of the project as it was described" when he signed a sale agreement in February 2005. Expressing his hopes for the development, O'Leary recounts, "The quality, as promised, sounded great." Instead, he describes the building to The Stranger as "basically a Motel 6. It was not high quality and I did not get what I paid for."
O'Leary, who never moved into his condo, says some of the problems include irreparably damaged door and window frames; a poured concrete deck that sloped toward his apartment, causing leaks in the unit below; mounting construction delays; and unmet expectations. O'Leary filed suit asking for the return of his deposit and attorney fees. Are these just the complaints of an unsatisfied yuppie? Maybe, but O'Leary is not the only person to encounter problems with 2200.
According to resident Jim Dierst and another condo owner who wished to remain anonymous, tenants have dealt with minor annoyances such as low water pressure and leaky shower doors and pipes, as well as major design flaws like incorrectly positioned halogen lights that threatened to ignite kitchen cabinets. The problems were compounded, they say, by promises of room service from in-house restaurant Marazul, a rooftop "garden"—which according to a third resident is nothing more than "a big cement area with a couple of trees stuck in it," and an in-building spa that all have yet to fully materialize.
As of press time, several real-estate websites list 38 condos being resold in the building, and Craigslist reveals at least a dozen units available for rent or sale. It is not unusual for investors to purchase units for immediate resale, termed "flipping." However, according to John L. Scott Real Estate agent Ben Kakimoto, the number of units being flipped by investors "seem[s] like a lot" when compared to other condo projects of similar scope. Some of these units have sat unsold for months, with several of the pricier units remaining on the market even after $100,000-plus price reductions.
Vulcan is a premier developer in Seattle, and its mixed-use projects in the South Lake Union area are the kinds of projects that have been pitched by city leaders like Mayor Greg Nickels as a smart way to increase Seattle's growth. With opponents of Nickels's pro-density plans constantly citing crappily designed condos as evidence against development, advocates of urban growth had hoped a project by the high-profile Vulcan would turn the tide.
O'Leary's lawsuit is not atypical for a new condo development, but it calls attention to some unflattering complaints from residents of 2200, a showcase development that was supposed to inaugurate Seattle's future.
While Vulcan would not release information on its vacancy rate, anecdotal evidence hints that 2200 currently isn't the bustling urban utopia it was supposed to be. Resident Chris Tanaka notes that he "never see[s] that many people" in the buildings, and Dierst remarks that "the building is not full."
Adds Alex, an anonymous 2200 resident who runs the Blogspot site 2200Life: "This was supposed to be groundbreaking... it just hasn't panned out that way." Alex's site lightheartedly details the problems with construction, security, and absent amenities, joking in an April Fools' post that Jenna Bush was moving into the building. In a phone interview, Alex points to what he believes is the problem: "We've already paid our money. That's why they're less willing to devote resources."
Matt Goyer, the operator of Seattle condo blog Urbnlivn and a program manager at real-estate website Redfin (not speaking on behalf of the company), believes the problem is oversaturation. "It feels like they're overbuilding in the higher-end market.... I've always been skeptical of the fact that there are enough people to live in those developments." Goyer faults vacancies at 2200 to "people trying to make a fast buck. A lot of [these] people [have] unreasonable expectations."
At 2200—where prices range from $375,000 for a 513-square-foot studio to $1,500,000 for a 14th-floor two-bedroom condo—units for sale have seen price reductions ranging from $1,000 to $175,000. For instance, a current real-estate listing for a ninth-floor one-bedroom unit has seen two price reductions, totaling $20,000, in the last month. And one seller is even throwing in a 42-inch flat-screen TV to sweeten the deal.
In response to what others called a high flipping rate, Vulcan sent an e-mail to The Stranger showing resell rates at several other major Seattle developments—ranging from a 10 percent resell rate to 22 percent—although their list did not provide the time period for these numbers. The flip rate at 2200 is at least 13 percent since it opened in the fall of 2006. While 13 percent doesn't highlight dramatic problems at 2200, Vulcan acknowledged that its "flipper" cap for the project was 30 percent. This figure strikes Mike Teather, general manager for the Williams Marketing Group, which handles the marketing and sales of the Olive 8 and Madison Towers condo projects, as "a big number. I think [we] would try to do better than that." Teather says his company tries "not to sell to investors," for the sake of community building, "We're trying to sell to people who want to buy homes." Tanaka agrees, "a 30 percent cap for investors is pretty high." Vulcan Real Estate marketing manager Alison Jeffries says that their investor cap was "a decision [they] made internally."
Vulcan developments under construction across the street from 2200—Enso, Rollin Street Flats, and Veer Lofts—have much stricter guidelines to control flipping. According to John L. Scott sales manager Renee Ostrem, who handles sales of projects in South Lake Union, Veer Lofts is a "no investor property," barring owners from selling or renting their units for 18 months. Ostrem says this is because Vulcan is "trying to create a community" at Veer.
Addressing the O'Leary lawsuit, Jeffries states, "I don't know why Mr. O'Leary feels like that's something he needed to go to the media about." She would not respond to anonymous complaints about the development (nor did she return several calls after a few residents put their names by the complaints). "We're doing everything we can to take care of our homeowners. The vast majority of people at 2200 are really happy," she originally told us. We asked Vulcan to put us in touch with some of those tenants, they did not respond to the request.
On a recent Saturday night, as 2200's three concrete and glass towers loomed in the night—the downtown skyline to the southwest, 13 Coins up the hill to the east—many of the windows were dark, save for the glow of several flat-screen TVs large enough to be viewed from the street.