Developer's bid for Federal Way high-rise project includes 3 towers; foreign investment key to financing
By JACINDA HOWARD
Federal Way Mirror Reporter
May 21, 2010 · 12:31 PM
Canadian developer United Properties is ready to let go of the downtown Symphony project in hopes that another group will be able to make the high-rise project a reality.
United Properties decided to step away from the project, slated for the old AMC Theatres site at 31600 20th Ave. S., and hand it over to Twin Development LLC. The City of Federal Way purchased the 4.1-acre site in January 2007 with intentions to redevelop it into a mixed-use project. United Properties agreed to buy the site the following December. On March 23, the Federal Way City Council approved a fifth and final extension on a purchase and sale agreement, giving the developer until Sept. 30 to close on the property.
On Tuesday, the city council heard more from Twin Development and viewed preliminary design work. Steve Smith of Seattle, Luke Hwang of Federal Way and Pom Kwak of Tacoma wish to develop in Federal Way because it's the only large city between Tacoma and Bellevue that has the desire and zoning necessary to jump start its downtown with high-rise buildings, Smith said.
"This has been a city vision for the last eight years and we're just sort of fulfilling that vision," he said.
The partners previously planned a 45-story tower, called the Sky Hotel and Residences, at the 2-acre former Azteca restaurant site, 31740 23rd Ave. They now are proposing to build a mixed-use project, called W-City, at the AMC site. The Azteca site will not be developed unless the city council does not sign a purchase and sale agreement for the larger downtown site, Smith said.
W-City stays true to the council's desire for a variety of retail, residential and office space while offering a central park. It varies slightly from the vision held by United Properties.
"We think it makes better use of the 4-acre site," Smith said.
The most notable differences in design are the number of towers, tower heights and residential and park space. United Properties planned to construct four towers ranging in height from 16 to 26 stories. Twin Development proposes three towers: Two measuring 45 stories and a third at 35 stories. Views of Mt. Rainier and the Puget Sound are anticipated from floor 15 and up.
W-City will focus less on residential space. While Symphony called for approximately 900 residential units, W-City calls for 550 condominiums and 150 hotel rooms. The condominiums will range in size from 711 square feet to 1,384 square feet and are expected to sell for market-rate, somewhere around $400 per square foot, Smith said.
"We will be delivering a product three or four years from now and the market is going to be completely different," he said. "We think our timing will be excellent."
Because the towers are fewer and clustered, the design will allow open access to a 1-acre park to the east.
Financing and foreign investment
W-City is expected to cost $350 million. Twin Development will use the EB-5 foreign investment program to attract investors, Smith said. The company is the only one to have federal approval to use the program in Federal Way, Smith said.
"(EB-5) is critical," he said. "This kind of project can't be done without it."
Financing for the purchase and development of the land is expected to come from a combination of investors and a bank loan, he said. Twin Development is conversing with three Korean investors, but is not ready to say whether the investors have signed contracts promising to fund W-City, Smith said.
City council members had some concerns and questions about the project. Mayor Linda Kochmar wishes to see the project's name changed. City council member Roger Freeman is concerned about the daunting height of the towers. Deputy mayor Dini Duclos said she'd like to learn more about the company's business plan, but otherwise likes the preliminary design.
"Right now, I'm seeing a very very nice project being put before us," Duclos said.
The council anticipates making a final decision June 1 on whether to relieve United Properties of its contract and sign a purchase and sale agreement with Twin Development. If the city chooses to move forward with Twin Development, the agreement will be drawn up over the summer. The sale price of $6.156 million will not change, economic development director Patrick Doherty said. The agreement will address concerns or specific desires the council has about the project. A final version will come back before the city council Sept. 7. Twin Development, per the agreement, will close on the acreage by Sept. 30.Contact Federal Way Mirror Reporter Jacinda Howard at firstname.lastname@example.org or (253) 925-5565 ext. 5052.