While Potala Village is nearing approval from the City of Kirkland’s Design Review Board in May, the project may be simply a facade to increase the property value. The real news will likely take place this summer — sale of the property, after which the design process would begin anew for a different project.

The developer, Lobsang Dargey, remains tied up in a federal court case after admtting to defrauding investors and diverting money into projects in Shoreline and Kirkland, as well as buying a home in Bellevue. A federal judge placed Dargey’s company into receivership in October 2015, and Dargey pleaded guilty to fraud charges in January.

The proposal, once a tall apartment building with nearly 150 micro-units, has shrunk to a three-story mixed-use building with commercial space on the bottom floor and 58 micro units on the second and third floor. The project went before the Design Review Board on March 6 for the first time in more than 15 months.

Kirkland Planning Director Eric Shields said the board’s response to changes by the archetect were “generally favorable,” with a handful of suggested changes. Shields said the project could get approval from the review board at the next meeting, which is scheduled for the second Monday in May.

As has been the norm at Potala Village meetings, community members spoke in opposition to the project. Increased traffic and obstructed views of Lake Washington have been common themes.

The board asked for changes to the building’s facade, minor compared to the major changes made to the building’s design during the last year. The project is under the maximum allowed number of units per acre, and now fits the zoning code.

But, Shields said, the approval may not matter.

“The receiver is the one contracting with the architect to have the property go through the design process,” Shields said. “At the same time, the receiver will be selling the property for the highest-possible return — that’s his objective. Once that happens, the new owner will have the property, and the owner can decide to use the design approved by the Design Review Board, or start over.”

Shields said several interested parties have contacted the city, but conversations with prospective buyers seem to indicate the city may end up starting over.

But selling the property after the design process, as the new owner is unlikely to use the approved design, isn’t entirely wasteful.

“I speculate it’s because (the receiver) believes it demonstrates the property is developable, and brings higher value,” Shields said.

The receiver, Michael Grassmueck, did not respond to a request for comment.

The next Potala Village meeting is scheduled for May 22.

The Potala Village project would sit on Lake Street, overlooking Lake Washington. Courtesy photo