The Tacoma City Council has approved the downtown Elks project, which puts the city on track to owning the vacant land north of the planned McMenamins brewpub.

It also starts the 18-month timer on developers Grace Pleasants and Rick Moses. They have that long to find financing to buy that land back from the city and to build a retail and residential complex atop a city-owned parking garage.

“The implications of this project are just huge,” Councilwoman Marilyn Strickland, who also is running for mayor, said Tuesday night.

City economic development official Elly Walkowiak walked the council through the resolutions, which outlined that the city will buy the vacant land to the north of the Elks building at the same time Oregon’s McMenamin brothers buy the building itself with the intent of turning it into a restaurant, 40-room hotel and entertainment venue.

The city also agreed to pay for the construction of a parking garage with up to $9 million in bonds once Pleasants and Moses secure financing for their part.

The sale will close Nov. 3, Walkowiak said, and will cost the city $900,000 from a fund for economic development. Federal officials established the funding in the 1970s as a way to invigorate cities’ economies with major construction projects built through private-public ventures. Many cities, including Tacoma, use the money to make loans to developers seeking financing for major projects. As the loans are paid back, the city puts that money into other projects.

“We try to invest it on a short-term basis and only as a last resort,” Walkowiak said in an interview last week. “On this project, assuming it works well, $900,000 is only out there for 18 months at most.”

In addition to the money to buy the land, up to $450,000 will be taken from the fund to design the parking garage.

At Tuesday evening’s meeting, Councilman Jake Fey and Mayor Bill Baarsma both highlighted the source of funding, making it clear the money won’t come from the general fund.

Councilman Mike Lonergan asked Walkowiak for the worst-case scenario for the city should Pleasants and Moses decide not to buy the land.

The McMenamins would own the building, and the city would own the land, which it could then market to another developer at its fair market value of $1.5 million, she said.

The city also agreed to finish the restoration of the Spanish Steps on the south side of the Elks building by the time McMenamins hopes to open, in the spring of 2012. That’s a $1.3 million project for which $500,000 is still needed, Walkowiak said.

Darius Thompson, a city engineer who is coordinating the steps’ repair, said Wednesday that most likely will come from the gas tax fund.

Kathleen Cooper: 253-597-8546

kathleen.cooper@thenewstribune.com