Another Tacoma apartment site joins others seeking new owner to get to finish line
A proposed yet-to-be developed apartment site is on the market after receiving a jumpstart in investment interest last year.
The planned Market Square Apartments project, 1546 Market St., is listed with The Mogharebi Group at a list price of just under $5 million.
The site was purchased in 2022 by an LLC affiliated with Bellevue-based Plus Capital Partners for $4.9 million. Before that, a pre-application for Market Square Apartments was first filed with the city in 2019 by the previous owner, affiliated with a Florida-based LLC.
The plans call for an eight-story, 176-unit apartment building along with commercial space. The building permit from June 2020 has since expired, according to city permitting records online. A 12-year multifamily property tax exemption application was filed for the site in September 2022, but has yet to be acted upon.
In March, a $273,000 performance bond involving the LLC owner and a construction contractor was attached to the parcel for site work, city records show. The bond expires in May 2026.
In fall 2022, the project’s cost was estimated at $46 million, according to the MFTE application, and the site would offer 36 rent-restricted units. The units would range from studios to two-bedrooms and a total of 10 parking stalls, with a target completion date of June 2024.
The real estate listing states that “This flexible unit mix is particularly desirable when considering the property’s likely tenant base, university students, as Market Square is situated mere feet from the University of Washington’s Tacoma campus.”
It added that “Once completed, the property will offer an additional two units allocated exclusively to commercial retail space, these spaces together will total nearly 5,000 square feet and add to already abundant walkable local tenant conveniences.”
It lists planned amenities including “an expansive fitness center, various dog parks and rooftop lounge.”
Last February, Silverdale-based USG Realty Capital, an investment sponsor specializing in opportunity zone developments, announced it was partnering in developing the site with Plus Capital Partners.
USG selected the project as part of its “Investors Choice OZ Fund,” created to invest in projects located in opportunity zones. Qualified opportunity zones were created nationwide as part of the Tax Cuts and Jobs Act of 2017, and offer tax incentives for investing in lower-income areas.
Such zones could sunset by the end of 2026 if not renewed/extended by Congress.
Neither USG Realty Capital nor Plus Capital Partners responded to questions from The News Tribune about the site going back on the market.
The Seattle Daily Journal of Commerce first reported on the site being offered for sale Oct. 15.
That report noted two other Plus Capital Partners properties: Seattle’s Chromer Building site (once home to Amazon offices when it was the Columbia Building) has yet to be redeveloped into a more-than 40-story condo tower. And it stated that no buyers have come forward for the Partners’ vacant former Aaron Brothers frame shop/Winter Garden building, also in Seattle.
List of available sites grows
The Market Square offering joins other Tacoma apartment sites in various development stages offered for sale:
▪ Still-to-be developed Milan Apartments, 1712 Tacoma Avenue S., also is listed by The Mogharebi Group. The project is advertised as 45 units at an undisclosed price. Permitting applications for site development and construction were filed in March and are listed with the city as awaiting resubmittal/revisions.
▪ The same firm listing Market Square and Milan earlier this year offered the planned site for Avenir Apartments, 3718 Pacific Ave., at an asking price of $3.2 million. Other agencies showed the site still available as of Oct. 18. Plans for that project called for 98 market-rate units and 38 parking stalls.
▪ Last month, The News Tribune reported that the unfinished lender-owned Tacoma Trax, 415 E. 25th St., was for sale at an undisclosed price, according to the leader of Parkview Financial, the site owner.
Parkview Financial CEO Paul Rahimian told The News Tribune in September that the lender was working on plans to increase the project’s density from 115 units to 202 units, noting that “We believe with the increased density, the project is worth significantly more.”
▪ Graffiti Garages, 725 Broadway, has been on the market this year for $2.25 million after plans for demolition and redevelopment into a 130-unit apartment site went bust amid developer-investor legal issues and a federal investigation.
On Friday, The Seattle Times reported that a federal bankruptcy judge ruled the site’s owner, Bellevue-based iCap, operated as a Ponzi scheme with its collection of properties in the state, starting no later than October 2018.
While attorneys for iCap’s former CEO did not present any arguments in court, they previously told The Seattle Times that the developer “strongly” disputed the allegation that his firm operated as a Ponzi scheme.
The LLC affiliated with iCap purchased the Tacoma site in July 2014 in a bundle of five parcels between Commerce Street and Broadway for $700,000.
The court’s finding states that the Tacoma property unless “previously sold or disposed of” would ultimately be “deemed abandoned by the debtors and their estates ... and shall not be considered iCap Trust Assets.”
The LLC owner entity was listed as “administratively dissolved” as of Oct. 3, according to a state filing.
The Tacoma site also has delinquent property tax debt for this year of more than $24,200. A sewer lien for unpaid utility charges and interest was placed on the site in June.
News Tribune archives contributed to this report.
This story was originally published October 21, 2024 at 5:30 AM.
