The developer proposing to build the second-tallest building in Tacoma has asked the city for another six months, pending financing.
In late 2014, the council inked a deal with developer Yareton Investment and Management LLC, which promises to deliver a four-star hotel adjacent to the Greater Tacoma Convention & Trade Center.
The city recruited bids for a hotel with a minimum of 300 rooms, a grand ballroom, a plaza, a parking garage, along with other amenities, to complement the convention center’s operations and help attract larger conventions.
Yareton had planned to break ground on the hotel this fall. But its federal application tied to 40 percent of the financing for the $85 million project has been delayed.
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The Tacoma convention center hotel is not alone. Hundreds of applications for projects across the country are delayed as developers seek to add their projects to a federal list that encourages foreign investment, said Michael Fowler, a consultant on Chinese investment for the city of Tacoma.
“They are waiting like everyone else,” Fowler said. “It’s a big problem.”
The program, called EB-5, is regulated by the U.S. Citizenship and Immigration Services. It allows foreign citizens who invest in qualified projects that create at least 10 full-time jobs to obtain a U.S. visa for residency for themselves and family members.
Yareton used EB-5 money to build a five-story, 225-room hotel in Des Moines. Yareton has a federally recognized EB-5 regional center, said Elly Walkowiak, business development manager with the city of Tacoma.
“My understanding is, when you have a regional center, they are not starting from scratch,” she said. “This is an extension of the geography (of the regional center) that is much more expeditious.”
Yareton must prove it has 100 percent of the financing for the $85 million hotel before the city will sell the property on which it will sit, Walkowiak said.
“We will not allow conveyance until they are absolutely sure they can show us they have proof of the money (to build it),” Walkowiak said.
The city doesn’t want a half-finished hotel in the heart of Tacoma’s downtown, she said.
The project must have at least 40 percent equity, $34 million, which the developer initially hoped to recruit from foreign investors. The remainder, $51 million, may be debt, according to the development agreement.
The project has quietly passed other milestones in the intervening months.
The developer has made both of its $575,000 earnest money payments to the city. Yareton has told the city it also secured a major hotel chain, Virginia-based Interstate Hotels & Resorts, as its operator, although Yareton has yet to pass official notice to the city of the agreement. The four-star property will be branded as a Marriott, according to Walkowiak.
While the city’s Landmarks and Preservation Commission has largely blessed the project’s design, it is undecided on a decorative element called dichroic glass, fearing it might be too “flashy” for Tacoma’s Union Station Conservation District.
That glass does not adorn any buildings in Tacoma, and few in Seattle have it.
Seattle’s Fourth and Madison Building has some dichroic glass on the west wall of its Third Avenue lobby. Shortly after it was completed in 2002, the Seattle Post-Intelligencer’s architecture critic called the iridescent glass feature “one of the most sophisticated architectural pieces of public art in Seattle.”
For another example, look to the headquarters of tech giant Amazon. The Amazon Doppler Tower includes liberal use of dichroic glass elements on its 524-foot facade.
In renderings by Ankrom Moisan Architects of Yareton’s Marriott, transparent and colorful glass fins run the length of each hotel room’s window. A canopy of the glass is suspended above the hotel’s frontage along Commerce Street.
Few other buildings have the glass because “it’s an unknown,” and the look is hard to execute, said project manager Jason Lamb with Ankrom Moisan. The Landmarks and Preservation Commission is right to ask questions, he said.
“It’s because this is kind of a bold move,” he said.
But dichroic glass could be the right fit here, Lamb said, “because we were giving a nod to the glass art and the art culture in Tacoma. We thought it would be perfect.”
Tacoma is Dale Chihuly’s hometown. And the Museum of Glass is just down the hill from where the hotel might sit.
Reuben McKnight, preservation officer for the city, said overall the preservation commission is pleased with how the hotel’s design melds from the historic Carlton Building’s brick facade to the glass-and-metal framed Greater Tacoma Convention & Trade Center.
But they aren’t sure about the glass — yet.
“The concern is how flashy or strong a statement that will make,” McKnight said. “They are wanting better information about what that visual impact would be.”
The architect will return to the commission later this fall with examples of dichroic glass in use.
INSIDE THE HOTEL
Spaces within the hotel have largely remained unchanged since it was proposed to the city in 2014: a five-story base that includes parking, back-of-house-spaces, restaurants and a grand ballroom.
What remains to be seen is how much parking the city of Tacoma will buy back to replace the 160 spaces lost when the hotel is built.
The sale of the property, valued at $6.2 million, could help pay for those parking spots. Any money left over would go toward paying the debt on the Greater Tacoma Convention & Trade Center.
Yareton has offered to build 160 spots on two levels for the city for $5.2 million, or $2.6 million per level. Walkowiak said the city is evaluating the offer.
Walkowiak said value of the land, adjacent to the convention center in the north and the Carlton Building to the south, could drop because of a high water table.
It often costs more to build in such a place. Developers must pay to pump water from the site, as the Washington Department of Transportation’s contractor did to fix Bertha, the massive tunneling machine that was stuck beneath Seattle for more than a year.
Walkowiak said the construction contractor is studying what to do to keep costs down.
The tower’s design includes 17 floors of hotel rooms, for a total of 22 stories including the five-story base. Altogether it will be 264 feet tall from Commerce Street, making it the second-tallest building in the city behind the 338-foot Wells Fargo Plaza at South 12th Street and Pacific Avenue.
The tower could also be relatively thin — 56 feet at its narrowest point.
A message to the developer’s representative was not returned.