Two developers that want to build apartments above a proposed city parking garage have experienced difficulty obtaining financing. They are interested in the city dipping into a source of tax revenue to help finance the project.
Grace Pleasants and Rick Moses brokered the deal that got Oregon's McMenamins interested in purchasing and renovating the Elks Temple. That project will still move forward. McMenamins submitted documents for permits last month and will begin work this spring.
Pleasants and Moses had proposed a mixed-use structure with housing above a parking garage owned and operated by the city. City officials had already been considering a new parking garage for the northern section of downtown. This proposed project led them to spend $900,000 for the parcel. Between design costs and other expenses, the city has invested $1.7 million.
Pleasants and Moses missed a September deadline to finance the project and buy the land from the city.
The city could utilize part of a state grant intended for revitalizing downtown on the garage.
Elle Walkowiak from the city's Community and Economic Development Department discussed the project with Tacoma City Council on Feb. 7. One possible funding source is Local Revitalization Funds, an annual allotment from the state of up to $500,000 for 25 years. These come from a share of the state's sales taxes generated in the city.
Information presented to the council revealed the garage cannot make enough money to pay its debt. Walkowiak said construction costs of the garage are $10.5 million, but that could increase. It could generate $140 per stall each month. It would have 260 stalls. McMenamins would not lease any. The developers have offered a contractual guarantee to pay for 111 stalls, but the city's interest could be at risk if there is no money to back that up.
Councilmember Joe Lonergan asked what might happen if the project fails and falls into foreclosure. "That looms large for me as I look at it."
John Finke of National Development Council has analyzed the developers' project. He said the two have letters of interest for financing, but no commitments as of yet. He recommended getting a new appraisal of the project to see if it would be viable under current market conditions.
Councilmember Ryan Mello expressed concern about having this project dangle. "There are a lot of things competing for a limited amount of money."