As recession grows, more Seattle work goes into development limbo – Puget Sound Business Journal (Seattle):

Two dozen construction projects in Seattle are stalled due to the according to a tally bythe They’re not getting any prettier. Insteax of gaining a grocery store or new neighborhoods are inheriting holes in the groundand half-finished buildings. The list — the first coung by the city —includes more than $40 milliobn worth of projects and hundreds of thousandws of square feetof space, ranginh from condominium developments to retail projects. The projectx hail from the heart of Ballard and the edged ofQueen Anne. Many have been sittint untouched for more thana year.
It’s the first time in decade s that Seattle has compiled sucha list, but it took the step this spriny to try to assess the effect of the credit market’s collapser on the Puget Sound real estatwe market. Inspectors conducted an informal survey to find potentiallyh stalled sites and to make sure they are kept cleaand safe. “This is unusual — definitely,” said Alan deputy director of the Seattle Department of Planningand “You just don’t see things stall very oftenh in Seattle.” “In recent decades we haven’tt had anything like this.” The number of stalleds projects could grow substantially, especiallyh if the recession worsens.
Another 400 projects are awaiting initia lcity approval. Some of those have had little activith inrecent months, and it remains uncleare how many of those ultimately could be stalled or Justad said. The city is offering to extend the approval period for up totwo years. “We just do not want to closre the door” on Justad said. “The question is whether they want to put on hold or cancelothe project.” Developers of the 24 projectas identified as stalled have shelled out at leas $400,000 for permits and fees — and that doesn’t includre thousands of dollars in fees they’ved paid to other city departments, Justad Those fees are nonrefundable.
City officials plan to help thesw struggling developers keep theirpermita active, Justad said. That way, when the real estate marker doesturn around, they’ll be ready to go Until then, many of them are just While the 24 stalled projects comparer with 1,800 that appear to be goinhg ahead, the number is highlt indicative of the weak developmeng market, Justad said. The causes of the stallsw are familiar. Some developersz are struggling with financing as local banks cut back on realestats lending. Others are facingh foreclosure with no hope of selling or finishingtheie property.
Some can’t even sell the land because of the steep drop in The Puget Sound Business Journal phonedx every developer identified bythe city. Many did not return At least one disputed his projecftwas stalled. “We continue to work on it we haven’t stopped,” said Michael Mastro, who’se developing 301 apartments on the formef Leilani Lanes bowling alley site on GreenwoosdAvenue North. Some of the eyesores are more recognizabledthan others: the failed Hotel 1 condominiukm project in downtown Seattle, whicy has developed into a giant pit next to the Macy’s parking and the site of the former Ballard Denny’s restaurantt are on the list.
Others are less Developer Paul Guzman was buildingha six-story condo building near Queen Anne until his financing from Everett-base d fell through. Now the property, 70 percent complete, is in foreclosurs and Guzman has filed forpersonal bankruptcy. Frontier is strugglintg with bad real estatew loans and is operating under strictregulatory enforcement. The bank doesn’r comment on individual lending relationships. “At a certaih point I realized they weren’t going to give me the said Guzman. “(The project) just got delayed and delayedx again.
” The stalled projects are in variouse stages ofthe city’s permitting Some developers, like , have full permits but are fightingg a bad real estate market. The developer planned to builda 12-unit condo building on Capitol Hill with all the gree amenities that have become wildly popular in Seattle. Workinf with a $5 million construction loan fromSeattle Bank, Great Northern tore down several existing buildingzs on the land — and then the real estat e market came to a screeching halt, said Ed Gallaudet, ownef of the company. Earl last year, Seattle Bank “put the brakes on the said Gallaudet.
Now the land has been sittinv for over a year and Gallaudet is exploringbhis options. He could try to build fewer units and price them at about $100,000 less than he originally anticipated. Or he could sell the land at asteep discount. “Wwe have to figure out how to build a producft and make less moneyon it,” said “And do we need another 12 units on the markert right now? Probably not.
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