Part of Elks project faces sad but necessary ending

This was not a Tacoma City Council agenda that developers of a new building next door to the downtown Elks Lodge wanted to be a part of.

Before Grace Pleasants and Rick Moses could watch city staff present a last-gasp attempt to save their project, they had to sit through a briefing on the continuing crisis in the Tacoma city budget.

And then it got worse. Before council members could be asked to commit millions of dollars for what has essentially become a high-end apartment building, they had to hear about cuts to nonprofits that provide vital human services and cuts in support to popular fairs and festivals.

Fiscally, there is no connection between money for daily operations and money for construction and infrastructure. Politically, there is every connection.

Only after a few hours of budget briefings that one council member said gave her heartburn did the council turn to the project known as the Elks on Broadway. This is the building once closely tied to the transformation of the 1916 Elks temple into a McMenamins brew pub, night club and hotel.

At one time, Moses and Pleasants envisioned a 9-story building wedged into the steep lot between Broadway and Commerce streets. It would be part hotel, part apartment building, part parking facility for guests, tenants and patrons of the McMenamins complex next door.

Because it checked so many boxes on the Tacoma economic development agenda, a case could be made for the city’s direct involvement.

The city ended up buying the land and designing a parking garage that would form the pedestal for the new building. It also paid Moses and Pleasants $200,000 in consulting fees for managing the project.

But the recession and the always difficult process of finding financing delayed the project. After the developers defaulted on a deadline to buy the land from the city, the McMenamins essentially pulled out and decided to squeeze some hotel rooms into the beaux arts lodge building. Now it says it no longer will commit even to leasing parking stalls in the garage when the brew pub complex opens in April 2013.

That left the Pleasants-Moses project as an apartment building with a few retail spaces on the ground floor. Even then, the only way to get it built was for the city not only to pay for the parking levels but to subsidize construction and operations. Of the $16.1 million cost of construction and interest payments, the garage itself would produce only $5.8 million over the life of the loan.

The rest, city staff suggested, could be covered by using nearly all of an economic development gift the state provided two years ago. That program, known as Local Revitalization Financing, lets cities keep a small portion of the state sales tax collected within city borders. The money can be used to cover the debt service on bonds that cities use to pay for infrastructure investments intended to lure private investment to their downtowns.

The Pleasants-Moses project might qualify. But is it the kind of project that fits the city’s economic development plans? Should the city commit nearly all of the program’s capacity to this one project when so many other needs exist? Is it fair to provide such help to this project when other apartment developers nearby get no such help?

And should the city invest to provide parking and retail space when there is plenty of both nearby?

The only answer to all of these questions is no. And that’s sad and a bit disappointing.

Pleasants and Moses have worked their tails off. More than anyone other than the McMenamin brothers themselves, they deserve credit for making the Elks project happen. When the city was bathed in bad news, they provided some hope that things would get better and that momentum in town hadn’t ended.

Like many others, I had high hopes for their project.

But it no longer works, and council members will surely come to that conclusion, if they haven’t already.

Peter Callaghan: 253-597-8657 peter.callaghan@thenewstribune.com blog:thenewstribune.com/politics Twitter: @CallaghanPeter