May 5, 2010--After months of stalling, the Tacoma City Council on Tuesday unanimously approved a key environmental agreement that will allow Bellingham's Hollander Hotel Group to move ahead with plans to build a controversial hotel complex on the Thea Foss Waterway.

"This is the right hotel at the right time," Mayor Marilyn Strickland said before the decision. "We have an opportunity to say 'yes' and send a message to other investors that Tacoma is, in fact, open for business."

The approval allows the developer to move toward construction of a $17.5 million, eight-story Marriott hotel -- the first part of a three-phase development plan that includes a Hilton hotel and an office-retail complex.

The council's vote came after a lengthy public comment session that attracted clashing viewpoints about the project, mostly focused on hotel design aspects and labor issues with the Hollander group unrelated to the indemnification. Before casting votes, several council members said that such issues, while legitimate, were irrelevant to the matter at hand.

"Indemnification is a big word," Councilwoman Lauren Walker said. "It doesn't mean design and it doesn't mean union labor, though those issues are important to us."

The council's actions granted the developer a "hazardous substance indemnification" to protect it from claims for pollution that might linger on the former industrial site. The city has spent $105 million to clean up the former Superfund site for redevelopment and has granted similar indemnifications when selling other waterway parcels to private developers, city officials said.

But such an indemnification was not extended to Hollander after it agreed to buy a site from another private developer that abandoned a previous plan for a boutique hotel project. Hollander said its banks want the written warranty to protect it against any unexpected claims from future users or guests.

Last fall, the City Council had stalled the hotel project by tabling the issue. The sought-after indemnification became politicized not because it was controversial, but because some council members didn't like Hollander's hotel designs, preferring a more upscale structure for the prime waterfront site.

Before Tuesday's vote, Strickland noted similar Marriott hotels have been built on waterfronts in Baltimore, Boston and Portland, Maine, to name a few cities.

The Foss Waterway Development Authority tried unsuccessfully for six years to find a hotel developer for the parcel.

Owners of downtown's rival Hotel Murano campaigned against the new hotel, saying the Hollander group failed to keep promises when the company built the Marriott Courtyard near the Tacoma Convention Center. The Murano group also unsuccessfully challenged the project's shoreline-development permits.

Members of local labor groups and Murano employees generally criticized the project Tuesday as a threat to "living wage" jobs and good benefits in Tacoma, while employees of other Hollander hotels defended the group as an ethical and fair employer.

Hollander plans to request building permits by June 30, with the 14-month construction schedule to start between October and March.

Councilman Marty Campbell, who formerly worked for a Marriott hotel and holds company stock, recused himself from the vote.

Lewis Kamb: 253-597-8542 [email protected]

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