Construction on the eight-story Midtown Lofts condominium project in downtown Tacoma has halted after construction financing expired.
The 50-unit building at 1142 Fawcett Ave. is about 65 percent complete, Tom O’Connor said Tuesday. He’s the managing partner of Fawcett LLC, the company developing the project.
The project received an 18-month construction loan in 2007 from Frontier Bank that was extended last fall. That extension ran out at the end of 2008. Fawcett LLC wants another extension to continue building the project.
Between 40 and 50 construction workers were laid off the job late last week when the funding ran out.
Condo projects around Tacoma have stalled as the housing market declines and loans become harder to find. A four-tower project and a hotel with residential units on the Foss Waterway have been postponed. So have residential projects near the Stadium District.
Frontier Bank is considering whether to extend the term of the construction loan, O’Connor said. But new appraisals of the project have erected obstacles in the building’s path, he said. Those new appraisals came in at less than half the amount already committed to the building, he said.
The bank now estimates that under the current depressed market conditions, selling out the building will take about four years, said O’Connor, who didn’t say how much the loan was for or how much more he needed.
The 50 condos were to sell for prices between the mid-$200,000s to $800,000s for a three-bedroom penthouse.
The developers have considered converting the building to apartments, but the building, made of concrete and steel, may be overbuilt for that use, O’Connor said.
The developers have amassed a list of about 120 potential buyers who have expressed strong interest in the building. No units are yet sold.
Frontier Bank didn’t return a message left Tuesday afternoon. The building’s construction lender reported losses in the last quarter of nearly $90 million. In the building and construction sector of its portfolio, nonperforming loans increased from $183 million to $359 million.
In retrospect, O’Connor said, one of the developers’ mistakes was obtaining the construction loan five months before actual construction began. That delay left the developers with too little time to get the building finished within the loan’s time limits.
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