Unfinished apartment site near Tacoma transit hub paused again. Will it ever be finished?
The beleaguered Tacoma Trax apartment project is once again on pause, following a brief jump-start on work amid foreclosure proceedings last fall.
The planned 115-unit apartment site, 415 E. 25th St., sits unfinished next to the Tacoma Dome Station after a nearly year-long receivership and foreclosure process.
Maria Lee, media representative for the City of Tacoma, told The News Tribune on Monday in response to questions via email, “The City was notified that the project was being put on hold by the owner, Parkview Financial, but was not given any more information beyond that.”
Los Angeles-based Parkview Financial, the project’s lender, foreclosed on the Tacoma property and a completed apartment development in Kent in November from Trax developers Madison-Trax LLC, affiliated with GIS International Group.
Parkview CEO Paul Rahimian confirmed with The News Tribune in response to questions Monday that his firm for now is weighing next steps for the Tacoma site.
“Parkview is still evaluating options — whether to complete construction or sell it is as is,” he said via email.
Court records including regular receivership reports have offered status updates on the Tacoma site and Madison Plaza in Kent. The property’s receiver during the foreclosure process was J. Fanelli Properties of Seattle.
The final receiver’s report filed Jan. 23 in King County Superior Court, stated, “The receiver restarted construction of the Tacoma parcel to prevent the construction permit from lapsing.”
It explained, “Because there were not sufficient assets in the receivership estate to pay for construction, (Parkview has) been paying the costs of such construction as advances under their loan to Madison-Trax.”
It noted that with Parkview’s foreclosure, “the receiver is assigning the construction contract” to Parkview.
The filing also noted that more than 50 “proofs of claim” had been filed against the developers and noted that many of the claims “were related to mechanics liens asserted against the property.”
The report filing went on to note that while rents from the Kent property were sufficient to pay certain “ongoing operating expenses,” the site did not generate sufficient income to pay all of the operating expenses, “including expenses in connection with construction on the Tacoma parcel.”
Parkview’s funding advances were added to the loan balance “and have priority over all other liens on the property and any other interests against the receivership estate, other than fees of the receiver and its professionals,” the report added.
LLCs affiliated with the lender foreclosed on the site in November 2023 at $39.9 million and purchased the land from the site’s leaseholder in a separate transaction at $4.2 million, according to county records on file.
Litigation continues
Parkview’s pause comes amid continued legal battles tied to the site.
Three separate construction/contractor debt-collection lawsuits were filed last fall in Pierce County Superior Court against the site’s developers. Those cases were consolidated into one in January. A Parkview-affiliated LLC in February was granted its motion to substitute for other Parkview entities as a defendant in the case.
Principal amounts listed in each case’s original complaint total more than a half-million dollars. That total does not include interest and associated fees and ultimate payoff determinations.
Another GIS division, GIS Residential Construction, was sued last September in Pierce County Superior Court by a former employee over claims of unhealthy working conditions tied to mold at its Tacoma office, among other issues.
Attorneys for GIS Residential withdrew from the case in December.
GIS Residential has yet to respond in the case and received an order of default from the court last month.
Transit-oriented development
The Trax apartment project’s plans were for a seven-story, approximately 115-unit project with underground parking, amenities and about 15,420 square feet of commercial space on the ground floor.
The site was formerly home to a maintenance shed for Pierce Transit. The agency bought the parcel in 1999 to use as a staging area for construction of Phase 2 of the Tacoma Dome Station. Multiple attempts going back to 2014 were made to find a developer willing to bring transit-oriented development to the site with mixed commercial/residential units.
Pierce Transit sold the property to DMG Capital Group in June 2018 for $710,000. GIS International Group entered the project in 2021.
Planned amenities for Trax residents included an annual regional ORCA transportation pass for bus, train or ferry transit region wide.
Pre-pandemic, the developers envisioned an indoor farmer’s market along with other vendors at the site, and were one of the first on the Tacoma apartment scene touting transit-oriented development, with reduced parking.
“The concept is to operate as a full-time venue for local farmer’s/growers, artisans, restaurateurs and vendors at the center of a bustling multimodal hub,” the project’s executive summary stated. In 2018, developers projected a 2020 completion date.
The project, as many do, took longer than expected to get going.
The developers in 2021 sold the land to another entity for a 99-year ground lease as another financing tool, along with Parkview’s construction loan. The project qualified for a 12-year multifamily property tax exemption that same year.
The Trax groundbreaking finally occurred in January 2022. Construction stopped by December of that year, and liens on the property soon were filed.
Eugene Gershman, CEO of GIS International Group, told The News Tribune in April 2023 that he thought the lender was “being a little aggressive” and predicted funding issues would be resolved in a few months.
After a decade in the making, to see the project face any more delays is a disappointment for the regional transit agency.
“This is a key transit-oriented development that Pierce Transit hopes will come to fruition as soon as possible,” Rebecca Japhet, communications manager for Pierce Transit, told The News Tribune on Tuesday in response to questions.
“It is important to the vitality of the Dome District, and will give people who live in the building easy access to Puget Sound and beyond by having the largest transit hub in the region within steps of their door,” she added.
The News Tribune archives contributed to this report.
This story was originally published March 13, 2024 at 5:30 AM.
