Condos across Foss nearly dead

Developer agrees to sell property to Tacoma for environmental programs

JOHN GILLIE; The News Tribune
Last updated: February 9th, 2007 06:20 AM (PST)

A long legal and political struggle over a Thurston County developer’s plan to build a nine-story condominium and office structure on the waterway’s eastern shore is near an end.

The apparent victor is a coalition of business and commercial forces led by the Port of Tacoma. That group sought to restrict residential structures to the western side of the waterway.

The Tacoma City Council will be asked to approve a resolution Tuesday authorizing the city to acquire a three-acre waterfront site on East D Street that was the site of the proposed Crosswater Condominium project.

The city would use the site for a building that would house both its Environmental Service Utility laboratory and the Urban Waters marine research center and possibly other city offices, according to a draft letter of intent between the city and the condo developer.

Though the agreement lacks the council’s formal approval, the development company’s chief executive, Mike Cohen, said the basic parameters of the complicated deal are already settled.

Here’s how the proposal will work if all parties agree:

 • Cohen’s company, Pioneer Cay Developing LLC, will sell the site to the National Development Council, a nonprofit community development agency, for $5.54 million.

 • The NDC will then construct a building to the City of Tacoma’s specifications on the site. The city is still deciding what functions it will house in the structure though the Environmental Services laboratory is a sure tenant.

 • The city will lease the building from the NDC for 30 years. The Urban Waters marine research center will sublease space from the city and share its expensive analytical water testing equipment. At the end of the lease, the NDC will give the city the land and building.

“There have been no agreements signed,” cautioned J.J. McCament, Urban Waters’ executive director. “The City Council will have to consider whether there is a source of financing,” she said.

The city had been negotiating unsuccessfully for months on another parcel on the waterway’s eastern shore south of the Murray Morgan Bridge carrying East 11th Street across the waterway. But the city shifted its efforts to the Crosswater parcel recently when Cohen decided to consider selling the parcels instead of continuing pursuit of the condo project.

University of Washington Chancellor Patricia Spakes, a member of the Urban Waters board, said the marine research center board learned of potential availability of the condo site only about a week ago.

The new site, which is closer to the mouth of the waterway than the other site under consideration, could cut costs for Urban Waters and the university, which will run the research programs.

The other site would have required the construction of a long underwater pipeline to sample the waters of Commencement Bay. The new site would require a shorter pipeline, she said.

McCament said she had been talking informally with Cohen for two or three years, but he had always remained firm on his intent to build condos.

“Mike was interested in possibly incorporating the Urban Waters project into his building, but I told him we really needed more of a stand-alone structure,” she said. Cohen only recently agreed to consider selling the property, she said.

In the end, Cohen, who fought a successful two-year-legal battle to preserve his rights to build a residential building on the east side of the waterway, put the property on the market because a more complex Tacoma development was consuming his and his company’s energy and resources.

Cohen is redeveloping the site of the former Asarco copper smelter at the north end of Ruston Way near Point Defiance Park.

The smelter site still needs more environmental cleanup before Cohen and his partners can build a complex of condominiums, parks and single-family homes on the premium waterfront view property.

When Cohen and his development partners first acquired the Crosswater property, the City Council encouraged residential development on the waterway’s east side to complement the residential construction blooming on the west side of the formerly polluted industrial waterway.

But the port and Tacoma Tideflats businesses, including the Simpson Investment Co. and Globe Machine Manufacturing Co. allied with the Tacoma-Pierce County Chamber of Commerce and the Executive Council for a Greater Tacoma to oppose residential incursion on industrial land. Valero LP, a petroleum distributor which owns a tank farm adjacent to the condo site, took the issue to court.

The business coalition argued that allowing people to live so close to industrial activities would threaten their continued existence, because residents would complain about the noise, traffic and smells of industrial activity.

The industrial forces persuaded the council to rescind its approval of residential development on the eastern shore, but Cohen retained the development rights under the old rules. And he won in court.

While the political arguments continued, the port moved to acquire other potentially developable land on the waterway’s east side. The port’s and the council’s actions left the Cohen property as the only developable residential land on the eastern shore.

The city and the port played key roles in the funding of Urban Waters, helping endow what’s now known as the Port of Tacoma Faculty Chair to coordinate research in urban waterway pollution at the Urban Waters project. The University of Washington Tacoma will employ the scientist leading the research efforts.

The National Development Council became involved in the project when it responded to a city request for a proposal to build the combined research center and office structure that will house Urban Waters, said John Finke, an NDC director.

The NDC’s involvement in the project could potentially save the city as much as 20 percent of the development and acquisition cost for the center, said Finke. The nonprofit can tap private development techniques unavailable to the city to trim the project’s cost, Finke said.

The NDC has participated in urban redevelopment projects nationwide, including King County’s new office building near Seattle’s King Street Station, downtown rehabilitation projects in Yakima and projects in Redmond.

John Gillie: 253-597-8663

john.gillie@thenewstribune.com

Originally published: February 9th, 2007 01:00 AM (PST)