Pacific Plaza will lease to AG’s office

Photos by john larson

OFFICE SPACE. Tacoma City Council has authorized the developers of Pacific Plaza to lease part of the first floor as office space.

In his last Tacoma City Council meeting before leaving office, Mayor Bill Baarsma cast the deciding vote that will allow the developers of Pacific Plaza to lease space on the street level of the downtown structure to the Tacoma office of the state Attorney General. Councilmembers Marilyn Strickland, Connie Ladenburg, Spiro Manthou and Mike Lonergan explained their reasons for why they would approve the request from the business partnership, while Rick Talbert, Jake Fey and Lauren Walker discussed why they would vote no.

The request needed one more vote to pass, and Baarsma provided it. He said the long-term lease with the AG’s office will provide stability for the project and will eventually attract retailers.

The retail versus office argument played out over several meetings in the past two weeks. The city’s downtown zoning rules require a majority of street-level space in new or refurbished buildings to be used for retail. The original agreement with Pacific Plaza developers called for all of the street level in this structure be retail.

Dan Putnam of PCS Structural Solutions and Tom Absher of Absher Construction are in the group that entered into a public/private partnership with the city to transform the city-owned parking garage into a building that combines parking, new office space above and renovated retail space along Pacific Avenue.

Last month the developers reached a tentative agreement to lease 33,000 square feet of office space to the AG’s office, of which 14,000 square feet would be on the first floor. This agency is currently housed in the Washington Building downtown.  

Ryan Petty, director of the city’s Community and Economic Development Department, said finding retail tenants “is something of a struggle in this market,”

Putnam said a grocery chain has expressed interest in the south end of the structure.

The AG wants to put a consumer affairs office in the building, including a law library and conference room.

“They are excited to move into the healthiest building in Tacoma,” he said, referring to the building’s environmentally conscious design.

Putnam said he and his partners wanted retail tenants, but had concerns this would be difficult.

Council members heard objections from some downtown business people who object to this shift away from a commitment to retail.

Whitney Rhoads, representing Downtown Merchants Group, said downtown has ample office space, an adequate supply of housing but not much space for a mid-sized or large retailer.

“What is a true balance?” she asked. “Retail brings vibrancy to a downtown core.”

Phyllis Harrison, owner of the Art Stop, said office workers are part of the mix “but they are not the magical key to revitalize our downtown.”

Her husband Steph Farber owns LeRoy Jewelers. He mentioned a similar exemption given to a developer who bought the former Woolworth’s building, which “created a black hole” in his view.

“Making decisions in a crisis will not solve the ongoing problem of how we are going to develop our city.”

The developers agreed to share 10 percent of the base rent from the lease with the AG with the city. It will generate $2 million in parking revenue over the next 10 years, according to Putnam.

As a result of the council’s decision, the developers will scrap plans for a loading dock and create a two-story space for a future retail tenant at the north end of the building, facing Pacific Avenue.

The AG’s office will relocate by July 1. Putnam said a $20 million construction loan is due next November, which made it crucial for the developers to land the state agency now.

Putnam said they cannot get the grocer to sign a lease without landing the AG’s office. City officials have long wanted a grocer downtown, but have objections to office space at street level.

Putnam pointed out the developers paid the city more than $1 million up front for a 99-year lease of the ground floor, and have spent about $8 million on improvements to this floor to prepare it for tenants.

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