April 14, 2014 · Exit133

Chinese Investors Propose 2-Tower, 30-Story Downtown Development

A group of Chinese investors wants to build a hotel and mixed-use project on a two-acre City-owned site next to the Greater Tacoma Convention & Trade Center in downtown Tacoma.

According to a staff memo to Tacoma City Council, Yareton Investment & Management WA LLC of Seattle, a subsidiary of Shanghai Mintong Real Estate Company Ltd., was identified as the best match with City objectives for the sale of the site at 17th and Broadway.

According to details included in the memo, the investment group is proposing a two tower development, with a primary tower of 25 to 34 stories on the lower side of the property, and a secondary tower of 12 to 15 stories just uphill. The plan puts a 300-key hotel in the lower half of the primary tower, and condos in the upper half. The secondary tower would be all residential, for a total of 150 to 220 condos between the two towers. The project would also include 10,000 to 60,000 square-feet of street-level retail, and at least 400 parking spots.Yareton would not ask for subsidies for its proposed project.

In response to a January Request For Interest for developers to construct a hotel and mixed-use project on the site, the City of Tacoma received five proposals, including one from Provenance Hotels (parent company to the Hotel Murano) and one from Hollander Investments (which operates the Courtyard Mariott across from the Convention Center, and has been trying for years to put a hotel on the Foss).

The Murano response essentially said that the 250 room minimum envisioned in the RFI for the site would not be supported by demand. Three other offers would have required either outright subsidies for development, or financial investment from the City and/or community; the need for subsidies makes those offers a no-go based on a recent deal struck between the City and Provenance. With other offers ruled out, the $200 million Yareton project was the only viable proposal.

Yareton plans to fund the project largely through private investors under the federal EB-5 foreign investor visa program (in which investors from foreign countries are granted a visa in exchange for investing their own money in development in the US). According to The News Tribune, Yareton would fund the project partially through this program, and partially with loans from Chinese banks. The TNT reports that if approved Yareton's plans could have the hotel open for business by summer of 2017, with the second tower ready in early 2018.

That's if the Chinese investors get the green light.

An item appearing on tomorrow's City Council meeting agenda would give City staff the go-ahead to begin negotiations...

Filed under: Downtown Tacoma, Tacoma Business, Neighborhoods, Developments, City Projects, Economic Development, Hotels, Convention Center Hotel, EB-5

21 comments

Jesse April 14, 2014

How can this giant investment be leveraged to create even more investment?
- Cam May 28, 2014
  
  This is Fantastic! Finally some taller buildings in downtown Tacoma!. Tacoma is a city with an awesome spirit, pride and identity. What a better way to purge the city from its past reputations than with new businesses, and a skyscraper and a half to our newly glamourized downtown which is looking awesome by the way. This city has amazing potential, as it is the City of Destiny!, and we need to let it happen, or else we will just be an industrial mid-size urban port dwelling for the rest of eternity.
Morgan Blackmore April 15, 2014

@Jesse, what do you have in mind and how would one do it? This is awesome news. 200 more residential units smack downtown, hotel, retail, parking. And no money out of pocket from the city. What more could you want?
Sid April 15, 2014

Who will we be giving visas to in exchange for money? One million dollars is all that needs to be invested to offer a person a visa, this project will cost way more than that. What will they do with that visa after the project is completed? These are things we need to look at in a holistic manner before approving projects of this type. To grant a person an American visa based on monetary contribution is a huge national security risk. Don't let the temptation of money and a real estate project make you forget that we still have a responsibility to our citizens. I think it is great that such a strong proposal was put forward, but we need to be very careful with who we do business with.
- Xeno April 16, 2014
  
  We should stamp their visas at the Chinese Reconciliation Park to clearly show that no one here harbors any sort of xenophobic behavior anymore!
  - sid April 16, 2014
    
    I read once that discounting contingencies without justification, invites strategic surprise. I think it speaks volumes of how Tacoma operates at times and also your emotionally fueled statements. Think of what you are saying Xeno, you are creating in yourself, the very same person you think I am. I love that people want to spend money in Tacoma, but we should not let desperation for money, invite strategic surprise, of any kind. All I am saying is doveryai, no proveryai.
Andrew April 15, 2014

Condo's are alright -- another hotel would be interesting. But where are the jobs for the individuals purchasing these condo's? Where is the long-term economic growth associated with this project? I'm all for continued downtown construction but the city needs to have organic entrepreneurial job growth or step up efforts to get more businesses in the downtown core. 30-45k jobs at statefarm won't fill these condo's at 400k+ and $17/hr at Davita isn't getting it done either.
- talus April 15, 2014
  
  In addition to Tacoma slowly growing in terms of the population and size of its economy, the condo-dwellers are going to come from: A) Puget Sound area baby boomers downsizing who want to live in an urban condo but can't or don't want to shell out at least twice as much $ for a condo downtown Seattle or Bellevue (and if they sell a place up there and buy one here they'll have lots of extra spending $); and B) commuters to downtown Seattle. If you've ever tried to take the bus from West Seattle or Crown Hill to downtown Seattle, you know that the 594 or Sounder takes longer, but not that much longer. When/if WSDOT tightens HOV restrictions to 3 people/car and builds out the HOV lane to the Tacoma Dome, the 594 will be that much more competitive, and commuting from a Tacoma condo that much more viable for more people. And eventually they'll want more jobs and services in Tacoma, they'll spread the word that Tacoma's a nice place to live, and a virtuous cycle will take root. It's actually not that far-fetched...
Jake April 15, 2014

I'll let the government worry about who we let in and don't. We don't have control over that anyways. New investors in downtown Tacoma? Way to go Tacoma!
- JDHasty April 16, 2014
  
  I would second your cheer for new "investors" if I were not concerned that the investment would cost tax paying Tacoma residents far more than they are worth.
sid April 16, 2014

So we are going to allow a project funded by banks in a country that does not respect human rights, a democratic process, or the United States of America. They are seeking roughly 150 resident visas to establish a project in a port city, in close proximity to a major military installation and two major cities. This is "too good to be true." Our city government needs to take a hard look at this in conjunction with the appropriate agencies responsible for authorizing this.
- Xeno April 16, 2014
  
  I can't tell if you're crazy or joking. :(
  - sid April 16, 2014
    
    Xeno, your comment was not necessary, as I am simply basing an opinion based on acumen, not emotion. All I am saying is that this project needs to get looked at very carefully. We need our city leaders to do their homework. I bring you this example from a Bloomberg article and believe me, there are many more. I just want our community to welcome the right project, if everything checks off then fine, but let's not chase that tower in the interest of money, if it might present potential harm to our national security. Here's the article and i'll stop beating the dead horse: "China also has more than 3,000 front companies in the U.S. “for the sole purpose of acquiring our technology,” former CIA officer S. Eugene Poteat, president of the Association of Former Intelligence Officers in McLean, Virginia, wrote in the fall/winter 2006-2007 edition of “Intelligencer: Journal of U.S. Intelligence Studies.” http://www.bloomberg.com/news/2012-04-08/american-universities-infected-by-foreign-spies-detected-by-fbi.html
    - Xeno April 16, 2014
      
      If you want me to actually take you seriously I will. Your comments are concerningly xenophobic suggesting this project is a plot or assault on JBLM & The Port of Tacoma. This company has a track record in the area and is currently building the Artemis Hotel in Des Moines. If you think they are a front company to steal national security secrets you've clearly not done your homework. Second, the City of Tacoma essentially has no jurisdiction to enforce national security processes on Yareton. Presumptively the Feds and whatever bank is facilitating the development of the project have this responsibility. So I don't know why you'd call to becareful of who we do business with when it is only really the City's job to facilitate the permit and development process of the project. I mistakenly took your comments as hyperbole because of the presented facts of the TNT article. I find it potentially damaging to the local business community to call for anything beyond the legalities of the EB-5 visa process or we'll be building a Chinese Re-Reconcilation Park. The fact that our country is promoting stealing away Chinese millionares to effectively become Americans is to be lauded. Their money is well spent here as is all foriegn investment for countries we do business with. Don't look a gift horse in the mouth.
    - Squid April 18, 2014
      
      I am not sure what scares me more sid, that our city council would be involved in national security issues or that your think they should be.
Erik B April 16, 2014

Sure would be nice if it happens. The picture in this post shows just how empty downtown Tacoma is. Half looks like a surface level parking lot. Then there is this right nearby, nine adjacent surface level parking lots. Please fill in some of them with buildings ASAP.
nwcolorist April 16, 2014

My first thought was similar to the Murano comment. A hotel of such size would be under-utilized. Doesn't Yareton Investment & Management know that the Convention Center is a white elephant?
Jim C April 16, 2014

So we'll have a giant empty hotel next to a giant empty convention center, selling visas for the appearance of action. Check the GTCTC schedule for events with a planned attendance of over 1,000 people, they post it online. There is no convention business that is going to magically appear, after a decade it's hard to believe we're still chasing the same ghost.
Jake April 16, 2014

The city of Tacoma just released this a few days back on their website: The Greater Tacoma Convention and Trade Center had its best month ever in October 2013 with an occupancy rate of 77.57 percent. Major events through the year included the Mary Kay Career Conference, Northwest Pinball and Arcade Show, Northwest Quiltfest, Jet City Comic Show and the annual Festival of Trees. The Greater Tacoma Convention and Trade Center’s sales partnership with the Tacoma Regional Convention & Visitor Bureau proved successful in its inaugural time period, which began in the second quarter of 2013, produced remarkable results: Revenue Goal: $451,000 Booked Revenue: $1,358,712 (301 percent of Goal) Room Night Goal: 16,500 Annual Goal/12,375 Prorated Goal Booked Room Nights: 13,417 (81 percent of Annual Goal/108 percent of Prorated Goal) Total Economic Impact for Contracted Revenue: $5,479,800 I would say these reasons are attracting investors. Great numbers Tacoma!
BN Oly April 16, 2014

Make sure the investors don't try and build a fence next to a street or the wackos will come out of the woodwork with pitchforks.
Karen November 13, 2014

Did you know that most of those empty buildings downtown are owned by investors from Seattle, Gig Harbor and other cities? Do you know why they remain that way? Because the square footage they are asking for businesses to move in is insanely high for Tacoma. Prospective businesses look around and cannot figure out why the rates are so high and look elsewhere. The owners shrug their collective shoulders and write off the vacancy on their taxes. Is that what we want? More of the same problem but bigger? The lack of imagination on the part of the Council and City Manager is appalling. No one will step up and give deadlines for occupancy after a building's sale. If we told the owners of these vacant hulks that their property taxes would double if their buildings remain empty past one year, we would have a much more vibrant city core. Why do you think a Chinese consortium would want to own a business in Tacoma? Because there is no penalty for bad construction, bad attitudes and bad business. Look no further than the Elk's Club, Old City Hall, the mess with the Art Garage on Broadway, Tollefson Plaza, ad nauseum. Get it? We're suckers. Do we need to revisit the Prium Investments debacle for everyone to get real about this?