|By John Gillie, The News Tribune, Tacoma,
Wash.McClatchy-Tribune Regional News
April 22, 2009 - The developer trying to build a hotel on Tacoma's Thea Foss Waterway now wants to sell the project to someone else.
Both the Thea Foss Waterway Development Authority and the hotel site owners this week are talking with prospective investors about taking over the oft-delayed project.
"There are several parties interested in moving it forward," said Don Meyer, the authority's executive director. He met with one group of investors Monday to discuss the sale of property but would not disclose any names.
The authority sold the property on the west side of the waterway between the Esplanade condominium project and the Thea's Landing residential project last year to a group led by Seattle hotelier Bob Thurston.
Thurston's group obtained all of the permits needed to start construction, said Meyer, but Thurston's bank declined to proceed in such an uncertain business environment.
Under an agreement Thurston's group signed with the authority, the development group is obligated to build a hotel on the site. That development agreement will bind any new owner to those same conditions unless the agreement is renegotiated with the authority.
The authority still wants a hotel on the site, said Meyer.
The hotel, first conceived a half-dozen years ago, has met repeated roadblocks to its construction.
The first prospective hotel developer walked away from the project, and the second developer, Thurston, has spent years repeatedly redesigning the project in an attempt to make it appealing for banks to finance its construction.
First Thurston envisioned a pure hotel project much like his Inn at the Market at Seattle's Pike Place Market. Then he redrew his plans to create a hybrid condominium-hotel project with high-end residences atop the boutique hotel.
When the condo market collapsed, he again restructured his plan to reduce the number and price of the condo units in the building.
In the meantime, the housing market soured, and the banking crisis tightened the spigot on financing.
Now, at the end of his string, Thurston is looking for a developer to pick up from where he's leaving off and to carry the project to fruition. Thurston did not return calls from The News Tribune.
Meyer said a new owner would be smart to continue Thurston's work because starting from scratch with all of the permitting required on such a waterfront project would take years to duplicate.
Meyer contends that studies support the need for another hotel downtown. The 100 or so rooms planned for the waterfront property wouldn't inject too much new supply into the marketplace, he said.
A study for the Greater Tacoma Convention & Trade Center last year concluded that the assembly facility was losing convention opportunities because there are too few hotel rooms within walking distance for the convention center. The Foss project would be about two blocks from the center.
The pending decision by Russell Investments whether to keep its headquarters in Tacoma or to move it to Seattle could play a big role in whether the hotel project moves forward.
Without Russell and the well-to-do clients it brings to Tacoma, the market for a waterfront boutique hotel could be considerably diminished.
Russell, which last week laid off 400 workers worldwide because of reversals in its investment advisory business, had been scheduled to make a decision before the end of last year on the headquarters question. Now it says that decision will come sometime this year.
Advocates for both Tacoma and Seattle's downtowns have reportedly met with Russell recently to press their cases for locating in their cities.
John Gillie: 253-597-8663
To see more of The News Tribune, or to subscribe to the newspaper, go to http://www.TheNewsTribune.com.
Copyright (c) 2009, The News Tribune, Tacoma, Wash.
Distributed by McClatchy-Tribune Information Services. For reprints, email firstname.lastname@example.org, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.