Construction slows on massive Tacoma development as focus shifts away from apartments
Work on a major mixed-use development in downtown Tacoma has slowed because of sluggish funding.
The first phase of the $125 million Town Center Tacoma development on the southern end of downtown broke ground last fall. It was to open in early 2019 but that date has been pushed to the end of the year.
During the delay, project manager Albert Sze is changing the residential mix of the first phase. Instead of 244 apartments, the first phase will have 228 residential units split among 84 condos and 144 apartments.
The final phase, which includes the bulk of retail square footage in the project, will include 130 apartments for students.
The 6.4-acre project is just south of University of Washington Tacoma, on a hilly property between South 21st and 23rd streets, and Jefferson and Tacoma avenues.
Sze said the retail concepts could be new to the region, including a modern food hall with upscale, fresh cuisine.
No retail tenants have so far committed to the space, but the possibilities include a grocer, a first-run movie theater or an e-sports area — think competitive video gaming, said Alan Mayes with Al Mayes Properties, which is marketing the project to commercial and retail tenants.
The last grocer in downtown closed in 2014. Since then, grocers have stayed away because not enough people live in the area, industry analysts say.
That might change as Town Center, Brewery Blocks and a half dozen other developments come online in the coming years, Mayes said. Hundreds more apartments around the county are slated for opening in the next few years.
“Today it is still a hurdle,” he said. “Putting the 500-plus housing units together will have a material impact on the number of people that are close by. … It will quickly approach the point where a grocer can do well in downtown Tacoma.”
The development intends to tap into growing trends in the retail marketplace, Mayes said.
“As you know,” he said, “more people are eating out more often.”
Enter the modern food hall.
“Chef-driven food halls have come of age,” Mayes said. “It’s better food, it’s freshly prepared and it’s the new expectation.”
When will construction get moving again?
Sze called the delay a “small hold-up” and the developer, Bellevue-based North American Asset Management, and all parties continue to negotiate.
Dan Absher, president of Absher Construction, said the developer is paying bills on time. Thursday morning, a handful of workers were on site. Absher said he hopes construction can start again in earnest by September or so.
“We had hoped this summer we would have a big crew doing concrete work,” he said. “We are just being cautious to make sure the available funds match the ability to pay (subcontractors and other expenses).”
Later phases of the project are funded with a mix of private financing and money from foreign investors through the federal EB-5 program, which provides a green card to people who invest in projects that create jobs.
This story was originally published August 2, 2018 at 6:06 PM.