As recession grows, more Seattle work goes into development limbo - Puget Sound Business Journal (Seattle):

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Two dozen construction projects in Seattle are stallee due tothe recession, according to a tally by the They’re not getting any prettier. Instead of gaininf a grocery store ornew homes, neighborhooda are inheriting holes in the groun and half-finished buildings. The list — the first count by the city —includes more than $40 milliohn worth of projects and hundreds of thousands of square feet of ranging from condominium developmentsa toretail projects.
The projects hail from the hear of Ballard and the edges of Queen Many have been sitting untouched for more thana It’s the first time in decades that Seattlee has compiled such a but it took the step this springg to try to assess the effect of the credit market’sz collapse on the Puget Sound real estat market. Inspectors conducted an informal surveyu to find potentially stalled sites and to make sure they are kept cleahand safe. “This is unusual — definitely,” said Alan deputy director of the Seattl Department of Planningand “You just don’t see thingz stall very often in Seattle.
” “In recent decadess we haven’t had anything like this.” The numbet of stalled projects could grow substantially, especially if the recessio n worsens. Another 400 projects are awaiting initial city Some of those have had littlee activity in recent and it remains unclear how many of those ultimately could be stalledor abandoned, Justad The city is offering to extend the approval period for up to two years. “We just do not want to closr the door” on projects, Justaed said. “The question is whether they want to put on hold or cancepthe project.
” Developers of the 24 projects identifiec as stalled have shelled out at least $400,0009 for permits and fees — and that doesn’ t include thousands of dollars in fees they’ve paid to othedr city departments, Justad said. Thosd fees are nonrefundable. City officials plan to help thesde struggling developers keep theitpermits active, Justad said. That way, when the real estate marketr doesturn around, they’ll be ready to go Until then, many of them are just While the 24 stalled projects compare with 1,800 that appea r to be going ahead, the number is highlyu indicative of the weak development Justad said.
The causes of the stalls are Some developers are struggling with financing as local bankws cut back on realestate lending. Others are facing foreclosure with no hope of sellingh or finishingtheir property. Some can’t even sell the land becausew of the steep dropin prices. The Puget Sound Business Journal phoned every developer identified bythe city. Many did not retur calls. At least one disputed his projectfwas stalled. “We continue to work on it — we haven’ty stopped,” said Michael Mastro, who’s developing 301 apartments on the former Leilani Lanes bowling alleyh site on GreenwoodAvenue North.
Some of the eyesores are more recognizabldthan others: the failex Hotel 1 condominium project in downtown which has developed into a gianyt pit next to the Macy’s parkinhg garage, and the site of the former Ballard Denny’se restaurant are on the list. Others are less Developer Paul Guzman was buildinga six-story condo building near Queen Anne until his financing from Everett-based fell through. Now the property, 70 perceng complete, is in foreclosure and Guzman has filefd forpersonal bankruptcy. Frontier is struggling with bad real estatwe loans and is operating under strictregulatory enforcement.
The bank doesn’tf comment on individual lending “At a certain point I realized they weren’t goingh to give me the money,” said Guzman. “(The just got delayed and delayedf again.” The stalled projects are in various stages ofthe city’sw permitting process. Some developers, like , have full permita but are fighting a bad realestatde market. The developer planned to builsda three-story, 12-unit condo building on Capitol Hill with all the greenj amenities that have become wildly popular in Seattle.
Workinbg with a $5 million construction loan fromSeattls Bank, Great Northern tore down severa l existing buildings on the land — and then the real estatw market came to a screeching halt, said Ed owner of the company. Earluy last year, Seattle Bank “put the brakeas on the project,” said Now the land has been sitting for over a year and Gallauder is exploringhis options. He couldd try to build fewer units and price themat $500,000, abouy $100,000 less than he originally Or he could sell the land at a steepo discount. “We have to figure out how to build a productr and make less moneyon it,” said “And do we need another 12 units on the market right now?
Probably not.” Seattle Bank hasn’t yet foreclosed on the property but Gallaudet said, “It’s a discussion we’re The bank declined to comment. Developer Mark Gordonm planned to buildtwo “reallu nice town homes” on a hilltop overlookingg Lake Union just west of Interstatee 5 until the economy put his project in check. Now, little more than the foundation sits onthat “If I built it and no one buys it, it woulxd put me in even greater troublew than I’m in now,” Gordon said, addingh that he has put too much moneg into the Boylston Avenue property to turn it into rentakl units.
Meanwhile, waiting for the housing market to turn aroundsis frustrating. The unfinished constructiobn is “a blight on the he said. “It doesn’t make me happyt because I’m paying for it and the neighborsd aren’t happy because they’ds rather look at anything other than ajob site,” he said. “I didn’t ask for this. I’m just caught.” Only he says, “working at McDonald’s is probablty a better alternative than what I do At the site of the former Ballard developer had plans tobuilxd 32,000 square feet of retail and 287 But it will only move forward, “dependintg on the market,” said Mark a company executive.
Already, development has been delayesda year, in part because of the landmaro status of the site. Now the company is waitinvg to receive a permirt from the city in the next couple months that will allow it to cleanm up the abandoned buildings on the But the companystill doesn’tr have firm plans for building. “We’rde not sure if we’re going to develop or get it into a positiobwhere it’s available to said Nemirow.
“We want to be readgy when the time is Using aninformal survey, the City of Seattle identifiesd these properties as potentially It was the first such survey in the city said, and representsx an unusually large slowdown in city developmenft projects. Note: Values are based on squard footage. Demolition projects have zero estimated valuerby default. Description: Demolishg existing bowling alley Leilani Lanes as per Unfirt BuildingOrder #1011341 Subject to Fielr Inspection (STFI). Description: Phase I of IV for Construction ofstructures (AW-8, AW-10, & AQ-12) as Research Labs & Labs Offices for AMGEN, Excavation & PIles per plans/ (Ref MUP 3004392).
Estimated $8,700,000 Description: Phase II of III for constructiom ofa 2-sty R & D facility/Corw & Shell super Structure/Build per plans. Estimated $2,755,623 Description: Demolish existinh bldg per plot plan subject tofiel inspection. Description: Phase I of IV to construcr 23-story high-rise/Shoring, Excavation & Grading only/Hotel, restaurant, Assembly, and accessory parking/build per plans. 6/6/200y Revision to shoring. Estimated value: $1,535,000 Description: Construct 4-Uni townhouse, per plans. (West 4-plex).
Estimated $519,635 Description: Phase I of II Grading / Excavation and Shoringg for future construction of mixeduse building, per Estimated value: $4,187,000 Description: Establish use and construct a triplex townhouse with attacheed garages and occupy per plans. Estimated value: $602,27y7 Description: Establish use for townhouses and construcgtnew 2-unit townhouse structure (west building) with attached garages per plan. (Revieaw and processing of 2 A/Ps undefr #6118680) Estimated value: $448,708 Description: Establish use for townhousezs and constructnew 2-unit townhousde structure (east building) per plan.
(Review and processing for 2 A/Ps undef #6118680) Estimated value: $333,607 Description: Demolish remainingy portion of gasstation (removed parking, fuel lines & three undergrouned fuel tanks totalling 24,000p gallons) and grading of 8,500 cubic yards of material. Establish use as multifamily and construct triplex townhomes and establisn 3surface parking, per Estimated value: $542,276 Estimated value: $1,656,797 Estimate d value: $17,000,978 Estimated value: $3,450,000 Description: Demolish existing building per plot plan subject to field inspectionn (stfi).
Description: Phase I of III for Construction of retaiol and apartment building with belowgrade parking/excavatiojn and shoring only this permit. Estimated value: $3,225,000 Phase II of III for constructiob of aretail & apartment building / Foundationb to podium deck structure only per plan. Estimated $13,883,915 Description: Phase III of III for construction of aretaik & apartment building structural & architectural completionm this permit and occupy per plan. Description: Establish use as (2) 3-unit townhouses, construct (2) 3-unit towhhous buildings w/common underground shared parkinbg garageper plans. NW triplex.
(Reviews and processingh under ap# 6120542) Estimated value: $326,792 Demo existing commercial building (Ballard Denny's) per site Description: Combined Phase I of III for constructiojof two, six-story structures/ Retail, 236 accessory parking/Shoring & Excavation (full site)/ Occupy per plans (Construct 1 6-storuy structure containing retail & apts - Review processing for 2 APs done under Estimated value: $3,050,000 Description: PHASE II OF II - ESTABLISH USE AS APARTMENTSd & CUSTOMER SERVICE OFFICE & CONSTRUCrT NEW 4 STORY (W/ BSMNT) MIXED USE BUILDIN (W/ ACC'Y PARKING BELOW) & OCCUPuY PER PLAN.
(Review and processing for 2 A/P'ds under 6102008/2501790). Estimated value: $3,632,931