Land at 665 Peace Portal to be transferred to city in lieu of foreclosure

The land at 665 Peace Portal Drive will likely be transferred to the city of Blaine, which placed a lien on the property after incurring costs to demolish a dangerous building there.

The building located at 665 Peace Portal Drive was demolished by the city of Blaine in April. It was formerly occupied by the Costa Azul restaurant and was pest-ridden, structurally unsound and decaying, posing a risk to public safety. Asbestos abatement was also required.

After the demolition, Blaine city council held a public hearing and accepted the public works department’s demolition-related expenses of $283,178. Councilmembers directed that a lien be placed on the property in that amount, plus any costs incurred in filing or processing the lien and any related attorney fees and costs.

Around the time of the demolition, the property owner, Guenter Mannhalt of Seattle, passed away from cancer. Mannhalt’s estate has now offered to transfer the property to the city of Blaine in lieu of foreclosure. The offer was announced by city attorney Jon Sitkin at the September 23 city council meeting, and councilmembers voted to authorize city staff to accept the offer and proceed with the deal.

“The estate has offered the city a deed in lieu of foreclosure,” said city manager Michael Jones. He said that the closing hasn’t occurred and no paperwork has been signed yet. However, he said that a closing is scheduled for Thursday, October 17.

If the closing proceeds as planned, the land at 665 Peace Portal Drive will then be owned by the city of Blaine. “The disposition of that land will be something that the city council will decide,” said Jones. “I’ll be providing some alternatives and options [to city council] in the coming months.”

One possibility is for the land to be sold to a private developer, in much the same way as the city is selling the remainder of the Gateway parcel, the old airport site, to Family Care Network (FCN) and the White-Leasure Development Company. The purchase and sale agreement with FCN was just signed on October 2, said Jones.