A North Carolina developer is hoping for an early summer start on a project to convert a former mattress factory near the Tacoma Dome Transit Center into a 90-unit apartment project.

The developer, The Landmark Group of Winston-Salem, N.C., originally had proposed building condominiums on the site of the former Spring Air Mattress factory on Puyallup Avenue.

But the collapse of the condominium market nationwide sent the developer back to the drawing board to consider another use for the property it bought in October 2007.

When the market for condos softened last year, Landmark put the property up for sale without success.

“Nobody is buying now,” said Jim Sari, a Landmark executive.

The 1890-vintage complex of timber buildings, now covered with blue metal siding, was the mattress factory site for decades until the company moved to more modern quarters in Lacey.

Sari said the developer has a big incentive to find a use for the property.

“This property is costing me $250,000 a quarter,” he said. “We’re $2 million pregnant already on this deal with not much to show for it.”

Landmark applied for federal historic tax credits on the proposed development, but was turned down. Now it’s working with the City of Tacoma on other means of making the financing work on the deal.

Bob Levin, director of the private capital division of the city’s Community and Economic Development Department, said the City Council will consider making a loan from a revolving development assistance fund in late February or early March. That $1.5 million loan will fill the gap between bank and private financing and the cost of the project.

The council’s economic development committee has already recommended approval of that loan.

The bulk of the financing for the $12 million project will come from the developer and its banks.

Sari said he is negotiating with two banks now on securing construction and permanent financing for the project.

Banks are being much more conservative in their lending standards now, he said.

But that conservatism is choking out worthy projects, he said.

“It’s time for them to unclench their fists,” he said.

The up side of the depressed market, said Sari, is that prices for construction and materials have declined dramatically.

He expects the project’s construction costs to be about 25 percent less than if the building had been remodeled during the height of the condo boom two years ago.

The project as designed would be what Sari calls “industrial chic” with exposed timbers, natural wood floors and edgier decor.

The units would range from 700 to 1,200 square feet and rent for about $1.20 to $1.40 per square foot per month. (Using that math, the bottom rents would be $840 and the top would be $1,680.)

The reconstruction project could be ready for occupancy in 10 to 12 months from the start.

John Gillie: 253-597-8638

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