Parking dispute helps sink $85 million retirement project

If local developers have their way, in a few years you’ll be able to stroll the length of the Thea Foss Waterway along a 20-foot-wide esplanade.

While there, you could rent a paddleboard or kayak for a float along the water, dine at a trendy restaurant and take the elevator up a nine-story tower to your apartment.

Construction on The Village at Foss Harbor could start next year, with residents moving in about mid-2019 to 2020, said project backer Ted Johnson.

The path for this waterway development has been anything but simple. For nearly a year, it sparred over prime waterfront space with another project — an $85 million retirement community.

At the heart of the tussle: 200 parking spots for marina users.

DUELING PROJECTS

The rival project by Presbyterian Retirement Communities Northwest was a 160-unit building of gleaming glass with an upper-floor sky bridge south of the Murray Morgan Bridge.

The building would have topped a nearly 1-acre site that decades before had been contaminated by industrial pollution.

The project was never to be after the company, now known as Transforming Age, backed out in January for vague reasons.

Before that it was up against the Foss Harbor development, a project of Johnson and the limited liability corporation he owns, Foss Harbor LLC.

Foss Harbor LLC wanted to build a marina-centric district with two nine-story, diamond-shaped residential towers to the north of the bridge and 200 parking spots to the south.

Both Foss Harbor and Transforming Age applied early last year to build on land owned by the city and managed by the Foss Waterway Development Authority. Four parcels north and south of the bridge were at issue.

On March 23, 2016, the authority’s board rejected Foss Harbor’s proposed parking lot on two parcels south of the bridge.

“We want people down there,” board President Bill Driscoll said earlier this year. “We want construction and buildings.”

Residents of the area will spend more time and money than those who park there for a specific event, he said.

“Our preference is to have investment down there and long-term residents and long-term businesses there, rather than parking,” Driscoll said.

While the board didn’t want the waterfront parking Foss Harbor LLC requested, it did like the rest of the rival projects.

At the same meeting, board members told the authority’s then-executive director, Su Dowie, to negotiate a purchase and sale agreement for the retirement project, and asked her to “continue conversations” with Foss Harbor LLC, according to meeting minutes.

That way, the thinking went, the waterway could benefit from two vibrant developments without devoting too much prime waterfront space to parking.

FIGHT OVER PARKING

Foss Harbor Marina had leased land from the development authority for years for parking at its 416-slip marina at 821 Dock St.

The marina, which would remain an important part of the tower development, needs parking, Johnson said.

But if the retirement project were built as proposed and the authority did not allow Foss Harbor LLC to replace parking slots, the marina would lose too many spaces, Johnson said.

The marina is almost always fully leased, with some residents living aboard their boats, Johnson said. Loading items and families into boats for day trips takes time and requires nearby parking.

In addition, the parking lots are open to the public and marina users most of the time, and are almost always full when the weather is nice, Johnson said. They’re jam-packed on three weekends a year: Labor Day, July 4 and Memorial Day.

Because of that, Foss Harbor LLC, in an April 2016 letter, expressed concerns about the development authority’s decision to eliminate 200 parking spots from its marina village proposal.

“From a functional standpoint, the authority is certainly aware that the marina use cannot operate (and facilitate access to the water) without nearby parking,” the letter from Johnson reads.

With fewer parking spots, he said, the existing marina will attract fewer tenants.

Foss Harbor LLC has long asked the development authority for guaranteed parking, Johnson noted.

“Our primary goal here is to preserve the success of the marina, and that means we have to have parking,” he said recently.

TIME RUNS OUT

Meanwhile, Transforming Age’s project was headed for rough waters.

Minutes from the authority board’s meetings and letters obtained by The News Tribune through the state Public Records Act show how the deal unraveled throughout last year as Foss Harbor LLC pressed its position.

That summer, another retirement project surfaced just a few miles north: A $55 million senior living facility in Point Ruston.

Transforming Age wanted to be the first retirement project on Tacoma’s waterfront, July 2016 meeting minutes say, so the clock was ticking to secure their deal.

At one point, after more meetings and a proposal to shift lot lines to allow more parking for its marina project, Foss Harbor LLC representatives verbally agreed not to hinder the progress of the Transforming Age project south of the bridge, said Norm Gollub, the development authority’s current executive director.

Instead, Johnson wrote a letter in October that “raised a number of new issues relating to their project they wanted to do north of the bridge,” Gollub said.

Not only did Johnson still want space for parking south of the bridge, he also wanted the city to pay millions for utility upgrades and an esplanade extension north of the bridge.

Johnson said he wanted Transforming Age’s retirement community on the waterfront, but refused to sign anything without negotiating for utility upgrades for his tower project.

All sides lobbed parking proposals for months. A city attorney, planners and the city manager attended meeting after meeting.

It was all for naught.

In January, Transforming Age backed out, citing “ongoing changes in project requirements and parameters.”

Shortly thereafter, Gollub said, Foss Harbor LLC scaled back its project to one, 100-foot-high, nine-story apartment tower with 216 units. The campus will include office and retail space and will be developed in phases, according to the company.

“The market has changed,” Johnson said, “and there’s no demand for that high-rise condominium anymore.”

‘STAY TUNED’

Despite the loss of the retirement community, Gollub said he’ll continue work with Foss Harbor LLC. Both continue to meet weekly.

“I’ll turn the other cheek,” he said. “They own a piece of property they want to develop on, and they have a marina business. We want to see both of them succeed.”

Johnson said he is eager to complete the development agreement by fall.

“We want to partake in the robust apartment market,” he said. “There’s no reason to stall this.”

A development authority could decide on a price and vote on whether to sell some property to Foss Harbor LLC could come as early as this month. Such a sale would be accompanied by a development agreement with construction time lines and benchmarks Foss Harbor must meet before the property transfers hands, Driscoll said.

“We are hopeful that the project will be going vertical in the not-too-distant future,” he said.

Meanwhile, Johnson continues to negotiate for those taxpayer-funded upgrades.

“Everything south of the bridge is modernized and underground,” he said. “… None of that has occurred yet on the area north of the ... bridge.”

And Transforming Age?

The company remains interested in Tacoma — just not on the Foss, spokeswoman Heidi Happonen said in February.

As for those who might be disappointed in Transforming Age’s retreat, Gollub said, “Stay tuned.”

“We have been receiving inquiries for this site,” he said, adding that the authority could put the properties back out for bid by early fall.

He expects to attract the attention of several residential projects.

“People have an affinity for the water and want to live by the water and stroll by the waterfront,” he said. “It’s proximity to downtown is just so ideal. That makes it a very desirable location to live in.”

This story was originally published July 13, 2017 at 8:00 AM with the headline "Parking dispute helps sink $85 million retirement project."