UPDATE: The city council plans to punt on the indemnification issue again this evening, council members said at today’s Study Session.  On advice from city attorneys, the council is giving Hollander and Seattle hotelier Bob Thurston (from whom Hollander is buying the development site) a week to hammer out a private agreement that would transfer a city indemnification Thurston already has to Hollander. It would also keep the city and Foss Waterway Authority out of the matter, which is tilling new ground on authority delegation issues regarding Foss development. TNT business reporter John Gillie will have more details in tomorrow’s News Tribune.

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Tacoma’s city council members are expected to figure out once and for all today what to do about a pending issue regarding a $20 million hotel project proposed for the Foss Waterway.

Hollander Investments, which is seeking to build two hotels and an office complex in phases over several years,  needs the council’s approval of an agreement to get started. The agremeent being sought would indemnify Hollander against liability for any environmental hazards its development potentially could churn up.  Hollander had been seeking to get started on the first phase of construction this fall, but is still waiting for the city council’s approval on the key issue.

The council tabled the matter two weeks ago, saying it needed more time to contemplate the project.  Behind the scenes, the Murano Hotel and hotel workers’ union reps have been lobbying against the project due to concerns about hotel competition and worker rights issues.  Hollander officials have said they need the approval to happen quickly, or face having a state shorelines permit lapse during their construction.

The matter is slated for a discussion at the council’s noon study session, and is also on tonight’s council agenda.

Stay tuned…