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Waterway hotel project granted third extension

By Meghan Erkkinen

Tacoma Weekly
merkkinen@tacomaweekly.com
Published on: September 04, 2008

The Foss Waterway Development Authority has granted a nine-month extension to the developer of a boutique hotel along the waterfront. The project is on Site 4, located north of the Museum of Glass along the waterfront, between the Esplanade and Thea’s Landing projects.

The latest extension, to May 30, 2009, is the third granted to developer Robert Thurston, who is struggling to find investors and to design a project that will meet the needs of the area.

“Given changes on the Foss Waterway and a larger economic picture on both local and national horizons, we need to rethink our development model,” Thurston wrote in a memo to the development authority. “The time extended will be used to optimize economic returns through redesign.”

The initial proposed design for the site included 100 hotel rooms and residential units. As the housing market began to plummet, Thurston and his team reduced the project’s residential units and increased the room count to 169. Now they’re looking at trimming the count down by about 30, reducing or eliminating residential units, and incorporating a floor or two of condominium office space. The team is looking at reworking the project within the permits and approvals they have already received.

“If we’re going to stay in the game, we have to somehow reinvent the program we have,” Thurston told the development authority. “There’s demand. We still believe this is a good location for a hotel.”

The development authority also brought in a hotel consultant to analyze the market alongside Thurston’s project to determine whether the project is viable. The consultant, Andy Olson, determined that it was.

“I couldn’t find any fatal flaws (in the design),” Olson said.

No other projects are in development that would negatively affect Thurston’s project, Olson added. Like other cities, “Tacoma isn’t overbuilt,” he said. “It’s just over proposed.”

The development authority granted Thurston the nine-month extension rather than a typical three-month extension in the hopes that this will be the last one the developer will need.

“Usually these extensions have been a lot shorter. The problem is that as we’ve looked at each extension, the market has continued to deteriorate,” said Development Authority Executive Director Don Meyer. “It’s going to take us a while to get through the economic condition we find ourselves with… This is probably going to be the last extension that we’ll go with, but I can’t guarantee that because I don’t know what the market will look like.”

The development authority also continues to offer its support for the project because they like Thurston’s concept and operating style.

“It’s the design that drives us,” Meyer said. “It just seemed very appropriate that we wanted something special down here, so we’ve been hanging on to this concept.”

Over the next few months, Thurston and his team will be evaluating the area’s appetite for office space, and will also continue to attract investors to the project. The development authority will likely know by early next year whether the project will be successful, Meyer said.

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