Clark Asks: What’s going on with construction of Salmon Creek apartment complex?

The legal battle, which remains unresolved, prevented the project from moving forward for several months, but the investment company said it had resumed construction work as of this week.

“iCap has assumed control of the project,” iCap’s attorney Wendy Lyon said Tuesday, speaking on behalf of her client. “iCap has just secured a refinanced construction loan and has resumed construction.”

An attorney for 134th Street Lofts LLC declined to comment about the dispute. Kirkland Development Chairman Dean Kirkland said he wasn’t involved with the project or the legal dispute between the project manager and the investing partner, but he said he was pleased to hear that the project was back on track.

Repeated delays

Plans for the $22 million apartment complex were announced in 2013 by Dean Kirkland and local developer Tom Files, who together had built the 192nd Avenue Plaza near Vancouver’s border with Camas.

The five-story 134th Street complex just south of Legacy Salmon Creek Medical Center is slated to include 93 apartment units and 31 extended-stay units for families of hospital patients. Construction of the project was managed by 134th Street Lofts LLC, a company formed by Kirkland Development CFO Drew Miller.

The project was originally scheduled to break ground by the fall of 2013 and be completed in 2016, according to news stories and a promotional video released at the time.

That deadline was pushed back more than once. Clark County records show the project was granted a building permit extension in November 2015, and staff notes indicate that construction had been rescheduled to begin in the following month.

Another extension was granted in January 2017, moving the project’s deadline to June 30, 2017. A Columbian story in November indicated that the apartments were scheduled to open in April.

In September, a reader used The Columbian’s Clark Asks feature to ask why construction had halted. An employee at a nearby business contacted by a reporter gave the same story as the reader: Construction stopped at some point in this year, and the site has been devoid of activity since then.

Exterior work on the two main 134th Street buildings appears to be nearly complete, but the interiors appear unfinished. The site still looks like a dirt and gravel construction lot, and at the start of October it was empty apart from a construction office trailer, a shipping container, a dumpster and a boom lift.

Legal fray

Court filings from both parties say that 134th Street Lofts LLC and iCap Northwest Opportunity Fund formed a partnership in 2015 to build the project; private construction lender Parkview Financial supplied the funding.

The project manager and the investment partner first went to court in June 2017, with iCap alleging that the 134th Street Lofts LLC had failed to fulfill its contractual obligations.

The parties reached a settlement in January, but went back to court in July after iCap filed a deed of trust on the property — a move that drew objections from Parkview Financing, which already had a deed of trust on the property and began withholding future project funding, according to court documents filed by 134th Street Lofts LLC.

The result, according to the complaint from 134th Street Lofts LLC, was a three-week standoff during which “contractors began walking off the job and the project had to be completely demobilized. Any chance to complete it on schedule was lost.”

In its response, iCap argued that it was obligated to secure the second deed as part of the previous settlement between the partners.

“The developer failed to meet the timeline and comply with the contract,” Lyon said. “We worked out a settlement where the developer kind of got a second chance. We had hoped he’d come through with a little more time and money, [but] he didn’t.”