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Washington Self-Storage Owner Expands Portfolio With Construction-Challenged Conversion Opportunity

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Construction drawings were finalized at the end of 2007. Contractors were solicited and permits filed with the City of Everett, all in hopes of executing the storage-conversion plan as quickly as possible.

An early obstacle to development was parking requirements. The property had been fully built out to the boundary on all four sides. Despite improvements to city curb, gutters and sidewalks, which created 11 new parking stalls adjacent to the building, the city still required one interior parking stall per 300 square feet of interior office space. Original plans for a larger retail-oriented office were scrapped for an 850-square-foot version that required only three interior parking spaces.

The team suggested to the city that the proposed interior loading areas were large enough for at least four vehicles and provided the additional required customer parking. This argument was rejected, and the developers were forced to sacrifice three rentable drive-in units for customer parking bays to get plans approved.

Construction Challenges

Interior demolition on the project began in February 2008, and the construction permit was issued in March of that year. Although the single-story, concrete tilt-up shell was mostly empty, there were still a number of design challenges to overcome, including the many additions that had been made to the building over the years. Obstacles included the need to cut hallways through interior load-bearing walls. Steel-moment frames were constructed and installed to maintain structural stability in these areas where the building was modified.

Petroleum-like compounds were unearthed during the digging of the elevator pits, and the project was immediately red-tagged. Core test samples were done at the limits of the excavations and came back positive, a possible indicator of widespread contamination. After more probing and sampling, it was concluded that further soil removal might jeopardize the structural integrity of the original structure.

With advice from an environmental consultant and attorney, the difficult decision was made to encapsulate the remaining contamination and drill groundwater wells to ensure no contaminants were migrating offsite. Fortunately, additional groundwater-drilling tests indicated a water table below 50 feet in depth. This meant no need for ongoing water-well monitoring and no chance of encapsulated contaminates migrating to neighboring properties.

The general contractor, PugetWest Construction, ultimately removed and disposed of 87.5 tons of environmental contamination from the site. Thousands of dollars later and almost a two-month delay, construction continued and final Environmental Cleanup Reports were completed and submitted to the Washington State Department of Ecology under its Voluntary Cleanup Program.

A restrictive covenant on the deed was necessary to properly record the environmental contamination remaining onsite. This covenant requires notification of the known contamination prior to any digging on the property and full disclosure in the event of any transfer of the property.

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