The Chinese investment firm that wants to develop 6.4 vacant acres near University of Washington Tacoma into a mixed-use center was granted an extension on the project’s timeline, in exchange for a bigger nonrefundable deposit.
North American Asset Management, which in June bought the piece of land Tacoma has owned since the early 2000s, will put an additional $2.4 million into escrow to slow its development timeline by about 10 months. The adjusted schedule for designing and building the project means it will end up with 170 more units of housing than originally planned.
“As the project has moved further along in the design phase understanding somewhat better the market conditions, the developer has increased the scope of the project,” said Martha Anderson, who works in the city’s economic development department, in a presentation to the City Council on Tuesday. “It will be a larger project with more square footage, and as a result has required some redesign of the project and an extension of the deadlines needed in order to secure permits and start construction, and with that we are requiring an additional deposit in consideration for making that extension.”
The construction of the project will happen in three phases instead of two, resulting in 800,000 square feet of development instead of 570,000. Where before, 360 residential units were planned, now the developer plans on building 530 units across three phases, according to the city. The first two phases are expected to begin in September 2017 and end in November 2019. When the certificate of occupancy is signed for those portions of work, the final phase of construction will begin within six months, according to city documents.
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North American Asset Management, a Bellevue-based firm led by Luo Xun Kun, a real estate developer from Wuhan, China, is paying $3.45 million for the property, less than half of the $7.7 million the city still owes on tax-exempt bonds on the property. City officials figured they were better off selling the land at a lesser price to get it back on the tax rolls sooner.
The city said the developer has previously paid nonrefundable deposits of $1.1 million. Closing on the purchase of the property is expected no later than Aug. 31.
“In this case, they have hard money in escrow,” Anderson said, “so they are committed to moving forward with the project.”
The city originally assembled the hilly stretch of land between 21st and 23rd streets and Tacoma Avenue South and South Jefferson Avenue with the intention of building police headquarters there. After the land was acquired, the police department decided to build on South Pine Street.
A stretch of Fawcett Avenue in the middle of the parcel has been vacated to vehicle traffic so the development will have a town square-type of feel, with restaurants and boutiques, according to city economic development staff.
Several council members spoke in favor of extending the timeline in exchange for the increased deposit and added square footage at Tuesday’s City Council meeting. A June presentation to the City Council listed an expected completion date of January 2021, and Anderson’s presentation Tuesday had a completion date pegged for November that year.
“Even though we’re going to take a couple months longer, we’re getting a project even better than we originally indicated, with even more units and even more square feet for future jobs and retail,” said Councilman Ryan Mello.