Word on the Street

The latest news in and around Tacoma, Pierce County and South Puget Sound

NOTICE: Word on the Street has moved.

With the launch of our new website, we've moved Word on the Street.
Visit the new section.

Divided Federal Way council grants extension for skyscraper project

Post by Steve Maynard / The News Tribune on Sep. 21, 2010 at 11:47 pm with 1 Comment »
September 22, 2010 12:04 pm

Federal Way city leaders pressed developers with questions during heated discussion Tuesday night before narrowly granting them six more months to buy city land for building a three-tower skyscraper project reaching 45 stories in downtown.

The City Council voted 4 to 3 to extend the closing date to sell the property to Twin Development for $6.1 million from Sept. 30 to March 31.

Some council members voiced concerns about what steps Twin Development has planned to raise money for the project. They asked the developers to disclose any business and marketing plan they have to generate money for the project.

Steve Smith, one of Twin Development’s three partners, first said he would give the plan to the council. But after another partner, Luke Hwang, declined to do so because some of the details would become public, Smith said he misspoke.

“We’re going to be doing lots of things, and we don’t want to share that,” Smith said.

At one point, Hwang said Twin Development might move the project to another location in Federal Way if the council insisted on seeing a business plan without guaranteeing it – and any proprietary information in it – would be kept confidential.

Council members voting for the extension were: Jeanne Burbidge, Jack Dovey, Roger Freeman and Linda Kochmar. Voting against the extension were: Dini Duclos, Jim Ferrell and Mike Park.

Council member Duclos said she wanted details from Twin Development.

“I’m just hearing vague things right now,” Duclos said. “What concerns me is not having any documentation about what you’re doing.”

Twin Development requested the extension to gain more time to market the project and obtain financing.

The council approved the purchase-and-sale agreement with Twin Development in principle in June with a Sept. 30 closing date and finalized the agreement on Sept. 7.

Council member Ferrell levied the strongest criticism, saying Smith had said back in June Twin Development would close by Sept. 30, knowing it couldn’t.

“We tried,” said Smith, citing the economy as the main hurdle. “To say we came here in June knowing we could not close in September is just not true,” Smith said.

As part of the extension, Twin Development will put $100,000 into an escrow account by Jan. 31 that will go toward the purchase of the city’s property or be forfeited to the city if the deal doesn’t close by March 31.

It was the council’s sixth extension involving three different developer firms since the city bought the land at 31600 20th Ave. S. in 2006 to spur downtown development. The city paid $4.1 million for the land, once home to AMC Theatres.

Twin Development must pay the city $3.8 million by March 31 to buy the property. An additional $2.2 million would be due to the city at the end of the first phase of the project. The city already has received $100,000 in earnest money from the original developer.

Twin Development plans to build three towers; two 45 stories tall and a third 35 stories. The project, estimated to cost more than $300 million, would include condominiums, hotel rooms, retail space and a 1-acre public park on top of underground parking.

To attract investors, Twin Development says it is using Federal Way’s designation last fall by the U.S. Citizenship and Immigration Service as a “regional center.” That program grants foreign investors permanent legal resident status in exchange for their putting money into local developments.

The minimum investment under the EB-5 Immigrant Investor Program is $500,000. Smith said Twin Development needs about a dozen investors to close on the property.

Council member Dovey defended Twin Development’s right to protect the details of its business plan from becoming public.

After nearly an hour of intense back-and-forth comments, the council voted for the extension.

Smith said he was pleased with the result. “It’s obviously what we wanted,” he said.

Leave a comment Comments → 1
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part and abiding by these simple rules.

JavaScript is required to post comments.

Follow the comments on this post with RSS 2.0