The City of Kirkland is preparing to advance a development plan for the Houghton Village parcel (the former Houghton shopping center), and council directed staff on Nov. 5 to proceed with a public‑hearing path while exploring market interest that might lead to a sale or a negotiated public‑private development.

Background and purpose: The city purchased the Houghton Village property in 2022 for $14.2 million using an interfund loan. The property was acquired to enable potential public purposes identified in a 2023 development framework (affordable housing, nonprofit spaces, neighborhood retail, arts/cultural space, and potential city recreational uses). State law and the comprehensive plan allow a council‑adopted development plan to enable increased development capacity (up to five stories in this site’s context) on city‑owned land.

What staff proposed: A draft development plan prepared by city consultants lays out an illustrative site program that could accommodate roughly 145 residential units, about 26,000 square feet of ground‑level retail/community space, and approximately 20,000 square feet of public open space. The development plan includes administrative rules that would obligate future proposals to achieve outcomes within 10% of the plan’s identified unit and square‑foot targets unless council approves a major modification.

Financing scenarios and appraisal results: Staff presented two appraisals: a May 2025 appraisal for 3‑story development at $16.5 million and an August 2025 appraisal for a 5‑story configuration at $18.25 million. Either appraisal could be sufficient to repay the city’s interfund loan if the city sold the property. Staff outlined three broad options to address the loan and the property’s future: 1) sell the property (with or without an adopted development plan), 2) retain the property and pursue short‑term financing (bond anticipation notes or other mechanisms) until a longer term strategy is determined, or 3) pursue state ELAP (Expanded Land Acquisition Program) short‑term loans to support land acquisition for future affordable housing use. Staff recommended advancing the development plan and exploring market interest with the understanding that adoption of a plan does not lock the city into a sale; it creates a clear pathway for development up to five stories.

Council direction and next steps: Council expressed broad support for moving the development plan to public hearing and for simultaneously exploring market interest. Deputy Mayor Arnold urged that the city should also explore sale options if market interest is sufficient. Several council members asked staff to return with specific market‑testing steps (for example, consulting a commercial broker for market interest and price discovery), and to present any offers to council for approval. Staff will prepare the development plan for a Nov. 18 public hearing and return with more detailed financial and market analysis.

Why it matters: The city’s choice to adopt a development plan and/or sell the Houghton Village site will have multi‑million‑dollar effects on city finances and on the availability of affordable housing and community spaces on a key neighborhood parcel. The appraisals indicate that a sale could repay the acquisition loan, leaving potential general‑fund surplus for other priorities; staff noted substantial market and policy uncertainties and stressed that council can choose whether to sell or retain the property later in the process.