Monday, July 23, 2007

Not a Developer’s Market?

John Gillie's feature article in Sunday's edition of The News Tribune provides a nice round robin of development projects across the City Center, but it ultimately leaves some important questions unanswered--indeed, unaddressed.

First, let's review what the article said. Gillie rightly observes how several economic factors are combining to create a slow-down in downtown redevelopment:

...emerging competition, changing market conditions and national tighter financing, a deflating national housing market, a local oversupply of condominiums and new caution even among high-flying developers [has] put the brakes on what was a kind of gold-rush development market in Tacoma.
Gillie then goes on to detail how these factors have played out in a number of projects to either slow down or stop them:
  • Crosswater Condominiums (dead)
  • Hanna Heights (renovated and re-opened)
  • Jay Heights [pictured] (on hold)
  • The Luzon (plans under renovation)
  • Old City Hall Condominiums (stalled)
Meanwhile, Gillie observes, several projects (including The Roberson, The Esplanade, Metropolitan Phase II and The Mecca) are moving along successfully.

As usual, Gillie's tabulation is accurate and even-handed. What's missing from this feature is a sense of what's unique about Tacoma's downtown market. Specifically--with vacancy rates at a historic low, why isn't Tacoma's city center filled with cranes the way that, say, downtown Bellevue is? How has a project like The Esplanade been structured, managed and marketed that gave it a leg up on a project like the Crosswater Condos?


  1. The think the peaks and valleys of the housing market are overplayed. I don't think there was ever a "gold rush development market in Tacoma."

    Many projects are moving along nicely.

    The best the city can do is to support and give incentives for development downtown and in the mixed use areas to infill these areas.

    The "market" will always be moving up and down.

    Of specific recent concern is the cities' consideration of
    new regulations for minimum densities potentially above and beyond what the market will support where they concede "[s]ome of the projects in development now would not meet minimum density requirements." (see page 9)

    The Foss Waterway, Stadium and downtown may have sufficient demand for significant minimum densities. We don't need townhouses to be built on Pacific Avenue.

    Yet, the mixed use centers on and around Hilltop have far less demand, and thus, the new proposed regulations could have a disparate negative impact on them. Barring development on Hilltop unless they had 42 - 60 units per acre would likely result in thwarting much of the development and recovery efforets there.

    Before proceeding, the city may want to consult with housing developers to determine the market and set regulations that are reasonable.

    I know of only one development on Hilltop that was not subsidized that would meet the proposed regulations.

    The overall intentions of the city to create an "urban villiage" based on Portland's developement code is good. However, Tacoma needs to be aware that it cannot import the market demand for housing that Portland has.

  2. Another observations:

    Cities grow step by step. Usually transitioning from houses, then to townhouses, then to stacked flats and then to larger buildings.

    Hilltop and the mixed use centers which have had limited development need to be able to natually take that path as downtown and Stadium are doing and proceeding down that path.

    Finally, as a general rule, developers will build up to the density and height allowed.
    It would be nice to believe that we could force a 30 story office building downtown through regulations. Yet, it simply would not work. There has to be interim buildings built first and a sufficiently strong market.