Language and cultural issues have slowed negotiations between the City of Tacoma and a Chinese developer for construction of a convention center hotel complex downtown.
Ellen Walkowiak, the city development manager conducting negotiations with Yareton Investment and Management LLC, said she remains hopeful that the city and the developer can reach a development agreement. Yareton is the Seattle-based subsidiary of the Shanghai Mintong Real Estate Co. Ltd.
Yareton first proposed development of a hotel, retail and residential complex on a city-owned parcel adjacent to Tacoma’s convention center last April.
The developer envisioned a 34-story, 300-room hotel, a 150-unit, 18-story condominium tower and a 400-car garage on the city’s parcel at South 17th Street and Broadway. The complex would also include retail spaces for lease.
Before the deal can move forward, the city and Yareton must agree on a development pact setting timelines, conditions and expectations for the project.
Walkowiak said negotiations have been ongoing but because of language and cultural differences, those negotiations have taken longer than anticipated.
“They have a Seattle attorney, a Chinese attorney and a principal who works from Shanghai,” she said.
Proposals and counterproposals must be translated and then reviewed for legality in both countries.
Yareton is proposing to raise approximately half of the $200 million or more need to construct the complex from overseas investors under a federal program called EB-5. Under that program, foreign citizens who invest substantial sums in U.S. projects can earn U.S. residency status for themselves and their families.
Yareton is building a 250-room hotel in Des Moines near Sea-Tac Airport using EB-5 money. That project took longer to get off the ground than anticipated because of complications in the EB-5 process, said development officials in Des Moines.
Yareton‘s was the most ambitious of five proposals submitted in response to city requests for proposals for the property. It was the only proposal that didn’t seek some sort of city subsidy or other consideration in return for the hotel development.
The city has long sought construction of another hotel to bolster the supply of rooms available for conventions and meetings at the center. City officials have said they’ve had to turn away some conventions for the lack of an adequate supply of rooms to house convention-goers.
The EB-5 program has lured millions in overseas investment to the U.S., though the Puget Sound area has lagged other areas of the country in attracting such investments, Tacoma Mayor Marilyn Strickland said at a recent conference.
A similar program in Canada attracted thousands of investors, particularly from China, and helped create a forest of high-rise apartments and condominiums in Vancouver, B.C. That Canadian program was recently drastically scaled back.