A project aimed at redeveloping the derelict Elks Temple downtown into a McMenamins restaurant and hotel – and constructing an adjacent grocery store and apartment building to boot – received much praise Tuesday from the Tacoma City Council.

Councilman Jake Fey said the project “achieves a lot of our goals.”

Tacoma developer Grace Pleasants and her business partner Rick Moses presented their list of requests for the city’s part of the project – including a $9 million parking garage – during the council’s noontime study session.

“This will not only transform this little corner of the world, but also have a broader effect on the rest of the (northern) end of downtown,” Moses told the council.

But before that can happen, Moses and Pleasants need a few things from the city including:

 • Funding for a 300-space, paid parking garage that would anchor the grocery store and apartment building and provide parking for patrons of the McMenamins establishment. City Manager Eric Anderson estimated that the garage would cost $9 million. The city plans to pay for the garage with revenue from its parking projects.

The developers would then lease 180 parking spaces back from the city for grocery customers and tenants of the apartment building.

 • A $1.2 million Urban Development Action Grant – a federal loan administered by the city – to Pleasants and Moses to help with the acquisition of the property at 565 Broadway. The loan would cover half of the cost of the property.

 • Complete the renovation of the Spanish Steps, which are next to the Elks Temple and connect Commerce Street and Broadway, before the project’s completion. The city already allocated money for this.

 • Provide property tax abatements for renovation of the Elks Temple and the apartment project.

 • And cooperation on addressing necessary off-site infrastructure improvements, the most significant being changes to traffic signals at the intersection of Commerce Street-Stadium Way and Interstate 705. That’s where the parking garage entrance will be.

The developers expect the construction of the grocery store and apartments to cost about $20 million, Moses said. The McMenamins have estimated that remodeling the Elks Temple into one of their signature brew pub/hotel/spa/theater complexes will cost about $10 million.

Two council members – Lauren Walker and Mike Lonergan – encouraged Pleasants and Moses to include some sort of affordable housing in their project, though it seems unlikely that will happen.

“I think this project is right for market-rate housing,” Moses said.

Council members and the city manager praised the project and expressed their enthusiasm for a development that knocks major items off the city’s downtown wish list – a grocery store and preserving the Elks Temple – in one fell swoop.

Mayor Bill Baarsma called the project “absolutely the right fit.”

And City Manager Anderson said, “This is exactly the kind of development we’ve been looking for.”

The developers provided rough estimates of the project’s monetary benefit to the city, including a projected $704,000 per year in sales tax revenue from the businesses.

The project will also bring about 300 jobs to downtown including 150 at McMenamins as well as jobs in the grocery store, parking garage and apartment building.

The council plans to vote on a letter of intent outlining its role in the project at its meeting next Tuesday and will consider extending the UDAG loan to Pleasants and Moses in August or September. It will then vote on a more detailed development agreement for the project by October.

Pleasants said she’s pleased to bring a project “near and dear to Tacoma’s heart” to the council.

“I like to think that it’s a good mix of private and public investment and that’s a strong statement – to say that Tacoma is ready for it, and it’s a great location for it,” she said.

Kelly Kearsley: 253-597-8673

Kelly.kearsley@thenewstribune.com