Downtown Tacoma hotel that opened in 2020 heading for auction. What happened?
AI-generated summary reviewed by our newsroom.
- Hotel faces Nov. 7 auction after defaulting on loan originating in 2021.
- Yareton failed to meet financial obligations, straining operations and payroll.
- Shortage of supplies, site issues cited in online reviews and in court case.
The developer-owner of the Marriott Tacoma Downtown faces losing the property to an auction set for November to collect on a loan default.
Initial legal action seeking to put the site into receivership was filed in July in Pierce County Superior Court involving project lenders against the developer, Yareton Hotel Investment Management LLC of Seattle.
The original complaint details missed loan payments and a fraught financial situation where the site manager resorted to paying out of personal funds to meet expenses such as payroll.
According to the complaint, Yareton has defaulted on payments tied to a $70 million loan dating back to 2021.
A notice of default that started a nonjudicial foreclosure process was recorded by Pierce County in May, and a custodial receiver was assigned to oversee the site’s finances July 17.
The hotel, 1538 Commerce St. and next to the Greater Tacoma Convention Center, was the culmination of years of international recruiting to entice overseas investors to bring crucial funding for new development in Tacoma via EB-5 programs. EB-5 offered paths to U.S. citizenship in exchange for investing in undercapitalized areas.
Yareton officials celebrated the groundbreaking on August 8, 2017, with mimosas and incense. The celebration date (8/8) was selected by a Feng Shui master, The News Tribune reported at the time, noting, “Eight is lucky in Chinese culture, because the word sounds similar to the Chinese word for ‘wealth’ or ‘fortune.’”
Unless the debt repayment is handled in the coming months, the site is set to hit the auction block Nov. 7 at the County-City Building and would include the hotel and garage that is also utilized by the convention center. The site trustee service handling the auction is Beacon Default Management. A date of Oct. 3 was originally listed with paperwork filed with Pierce County.
In response to questions, Beacon’s CEO Selina Parelskin told The News Tribune via email in response to questions that any sale information updates would appear on the firm’s website.
“If the beneficiary elects to make public their opening it will be shown on our website,” Parelskin added.
Yareton is a subsidiary of Shanghai Mintong Real Estate Co. of China.
The Seattle Daily Journal of Commerce was first to report on the upcoming Tacoma hotel auction.
‘Dire financial situation’
The complaint, filed by an LLC subsidiary of Delphi Financial Group as co-lender and for ACSS Real Estate Funding, contended that the borrower (Yareton) had failed to pay past due amounts and the unpaid balance of a $70 million loan.
Yareton had also “defaulted under the hotel management agreement with the current property management company, Interstate Management Company LLC, due to borrower’s intransigence and failure to financially support operations, which have put the property in its currently dire financial situation,” the complaint stated.
Other issues as a result have included a broken HVAC unit that affected at least 10 rooms and unpaid vendors leaving the hotel at times short of basic items such as soap, shampoo, room keys and linens for guests. Overall conditions noted in site reviews had raised the risk of Marriott pulling its brand from the site after a certain period, the complaint noted.
“As of April 2025, the hotel has reached critical status in all but one Marriott metric (9 out of 10), including poor performance in cleanliness, staff service, maintenance and upkeep, and all food and fitness center satisfaction categories. As a result, Marriott may issue borrower a notice of default under its separate Franchise Agreement with Marriott.”
The situation, the complaint continued, had led to “hiring difficulties and excessive staff turnover... .”
A corporate media representative for Marriott has not responded to a request for comment from The News Tribune seeking a status update. Under terms of the receivership, the receiver “shall have the authority to enter into a form franchise agreement” with Marriott International “and to have the property operated in accordance with the terms of the receivership franchise agreement by a third-party management company approved by Marriott.”
It adds that the receiver is to “ensure that the property is operated” according to local, state and federal laws, “and maintained in accordance with the standards required” by the receivership franchise agreement. The receivership order also establishes a framework for handling operating expenses and other immediate site issues.
Business, as a result of the issues, has fallen off, according to the complaint, stating that “the hotel is also failing to hit its financial marks.”
“Because operations have been negatively affected by the hotel’s lack of liquidity and borrower’s failure to contribute additional equity despite manager’s repeated requests, the property’s revenue in April 2025 fell below budget by approximately $277,000 and is forecasted to fall $1.3 million below budget by the end of 2025.”
It added, “Manager also noted that it has been forced to float funds out of its own pocket to pay employee payroll, among other operating expenses.”
One filing detailed that in March of this year, “Manager sent borrower a third default letter ... . Manager demanded immediate action. Although borrower had deposited $250,000 into the hotel’s operating account, this fell far short of the $2.25 million required by manager’s second notice of default.”
The filing added, “The $250,000 was purportedly to ‘cover payroll,’ but even this amount was insufficient to meet payroll obligations, let alone address the burgeoning backlog of ‘extremely overdue bills.’”
Limited entries have been filed in the court case, and the parties involved have so far not commented outside of the handful of filings.
No attorney is yet listed in the case to represent Yareton. Request for comment sent to the owner LLC, which has a “delinquent” status listing with the state, was not answered.
An attorney for the lenders and a representative for the onsite management company referenced in the complaint also did not respond to questions from The News Tribune regarding the case and current hotel conditions.
City staff in response to questions from The News Tribune reported that there have not been any municipal code violations on file with the site, and a search of county tax records shows the site is up to date on its property taxes. A Tacoma-Pierce County Health Department representative also reported no issues in recent inspections.
From two towers to one
If the auction does come to pass, it would be a stunning turn for a project that was touted in 2014 as the first fully private commercial construction for the city in 10 years. At that time, the last such major construction was for the Rainier Pacific Bank building downtown on Pacific Avenue in 2004. Rainier Pacific later failed and the building went to Umpqua Bank. The building recently just sold to Sound Credit Union.
The developers initially planned for two towers, including apartments/condominiums, which was later downscaled to one for the hotel.
The project that was planned for then-city owned property was set to capitalize not only on convention center growth but also more students coming to the University of Washington Tacoma.
The plans were beset by various funding and process delays through the years until its eventual groundbreaking in 2017, completed in 2020. Officials with Yareton’s parent company told The News Tribune the $85 million hotel would employ 1,647 people and draw 102 foreign investors into the U.S. market.
The 22-story, 304-room site shows recent mixed reviews on Google, with one reviewer in the past three months stating that there was “No room coffee, no courtesy soap outside of a paper-thin Dial bar. The ‘Elite Lounge’ has Diet Pepsi and granola bars. And then the lobby bar is insanely understocked.”
Another reviewer on Google commenting a month ago stated that while the room appeared to be “missing a few things ... after calling the front desk and asking for basic stuff within 5 minutes my requests were delivered,” and lauded the hotel’s staff.
The next court review hearing on the case is tentatively set for the end of October.
Previous reporting from The News Tribune contributed to this report.
This story was originally published September 22, 2025 at 5:00 AM.
