Looks like the market for developers of multi-unit buildings in Tacoma is coming to a grinding halt, much like the area’s housing appreciation.
After seemingly countless delays, extensions, redesigns, reconfigurations and rethinkings, a proposed boutique hotel on downtown Tacoma’s Foss Waterway faces a deadline Monday.
The hotel’s Seattle developers must produce all the permits, designs and financial commitments to the Thea Foss Waterway Development Authority or face the prospect that after more than four years of trying, the hotel simply won’t fly.
The authority, which wants to sell the land on which the hotel project would be built, and Tacoma civic leaders pray the project is a go, but the hotel has been a tough deal since its conception.
The 50-month gestation period for the 100-room hotel that also includes 22 condo units illustrates how emerging competition, changing market conditions and national trends can make what seems like a sure thing into a difficult project.
In recent months, those same factors plus tighter financing, a deflating national housing market, a local oversupply of condominiums and new caution even among high-flying developers put the brakes on what was a kind of gold-rush development market in Tacoma.
“A couple of extra points on the interest rates, slower sales and more cautious bankers can make it a much harder task for developers,” said Bob Levin, whose job with the City of Tacoma is to encourage new development in the city.
The article goes on to list a handful of projects (mostly condos) that are described as “dead or dying,” “in an induced coma,” or undergoing an “extreme makeover.” I thought that the market for condos in the Seattle-Tacoma-Everett area was severely under-tapped. I thought that we learned from the mistakes of markets like those in Florida. With all the unsatiated demand out there, how can there possibly be an “oversupply” and “slower sales”?
When the housing slowdown hit Southern California, they said “that’s 1,000 miles away, it won’t happen here.” When the housing slowdown hit Northern California, they said “that’s still 750 miles away, we’re safe up here in Seattle.” When the housing slowdown hit Portland, they said “they’re 200 miles away, our economy will keep us safe.” When the housing slowdown hit Tacoma, they said “heh heh, well, that’s getting a little too close for comfort… but it’s still 30 miles away, and totally unrelated to Seattle. Seriously. I hope?”
(John Gillie, Tacoma News Tribune, 07.22.2007)