Faint hope flickers for a new building next door to downtown’s McMenamins Elks Temple, more than two years after the city bought the land and agreed to help develop it.
Developers Rick Moses and Grace Pleasants are working on a scaled-down version of the apartment building they have been planning since July 2009, when they announced the deal to bring a McMenamins brewpub and entertainment venue to Tacoma.
Mike McMenamin, co-owner of the Portland-based company, said two weeks ago that his company will begin work at the Temple at the end of January, with a planned opening in the spring of 2013. They own the building, and McMenamin said their financing is lined up.
Whatever happens on the site next door doesn’t worry him, he said. “Parking isn’t the hugest issue for us,” McMenamin said, pointing to the McMenamins Crystal Ballroom in downtown Portland that has no parking directly associated with it.
On Tuesday, Interim City Manager Rey Arellano said he plans to brief the City Council in two weeks about a vacant site north of the Temple. An update had been scheduled for Tuesday, with Moses even attending the council’s study session, but Arellano said he bumped it off the agenda after consulting with Mayor Marilyn Strickland.
“We’re trying to get a project to go up there and make it work within the constraints that we have,” Arellano said. He said he wants to ensure that he and the council have all the information they need to make an informed decision.
When Moses and Pleasants brokered the sale of the Temple and its adjacent land from Portland developer Williams and Dame, it was a three-part deal. Portland-based brewpub operator McMenamins bought the Temple and the land outright; the City of Tacoma bought the vacant land north of the Temple; then it entered into an agreement with the developers for a mixed-use building atop a city owned garage.
Until last fall, Moses and Pleasants planned a $31 million retail-hotel-apartment building atop a $10 million city-owned garage. Moses and Pleasants had a September 2011 deadline to line up financing for that project and to buy the land, and they missed it. McMenamins then had a chance to buy the land, and they have said they’re not interested. They were going to operate the hotel in the new building, but decided to withdraw and proceed on their own.
The city has spent $1.7 million on the site. Most of that is the $900,000 to buy the land, money city officials had expected to recoup from the developers last year. Tacoma also has spent about $542,000 on designs and planning for the city-owned parking garage that could form the base of a mixed-use building on the site. Finally, the city has paid about $200,000 to Moses and Pleasants for project management.
An exact accounting of the developers’ costs so far isn’t clear, though the city has asked them to spell it out as they have been negotiating new terms. The developers have hired architects and a general contractor, GLY, which is also an investor. They also had started the process to obtain building permits.
Moses has declined to comment about project details since last fall. City economic development official Elly Walkowiak said two weeks ago that the scaled-down building is about 10,000 square feet of retail and 69 market-rate apartments above the city-owned garage.
Last October, Arellano sent the developers a letter giving them until after Thanksgiving to prove they could finance a project. That deadline came and went without action because the city’s budget deficit blew up and the council went through a process of hiring a new city manager.
Meanwhile, McMenamin said his company plans to begin work on the Temple by the end of the month.
To pay for the work, McMenamins has taken on private investors in the building, McMenamin said Dec. 28, declining to name them. “We have signed agreements,” he said.
He said the renovated Temple will fit only about a quarter of the hotel rooms that had been planned for next door. They’ll need more, he said, which should be music to the ears of nearby property owners.
“We’ve settled on 20 to 26 rooms in the (Elks) building,” he said. “Then we will have to think about getting into another building nearby for some more.”
Kathleen Cooper: 253-597-8546
kathleen.cooper@thenewstribune.com
blog.thenewstribune.com/business
Twitter: @KCooperTNT
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