A rendering of Cadius Partners Limited’s proposal for the development of a hotel near the Performing Arts and Event Center. Courtesy of city of Federal Way

A rendering of Cadius Partners Limited’s proposal for the development of a hotel near the Performing Arts and Event Center. Courtesy of city of Federal Way

Federal Way will buy back property after hotel proposal fails

Company that purchased contract has not begun construction on would-be hotel property.

The Federal Way City Council voted to repurchase the former Target property adjacent from the Federal Way Performing Arts and Events Center.

During its Tuesday night meeting, the council discussed the possibility of buying back the 1.86-acre property after owner Ottone-Salinas Inc. failed to begin construction by June 1.

A stipulation in the contract stated that if construction did not begin by June 1, the city had the option to buy it back within a 30-day window, said city spokesman Tyler Hemstreet. The hotel was initially slated to open Dec. 1, 2019.

“They haven’t been able to hold up their end of the bargain, so we’re going to purchase it back bearing council approval,” Hemstreet said.

Ottone-Salinas Inc. has not returned calls seeking comment on why it was unable to follow through with construction on the site.

Future uses of the property could include a higher education facility. Back in January 2017, the city signed a memorandum of understanding with Federal Way Public Schools, Highline College and the University of Washington-Tacoma to work collaboratively toward bringing higher education classes to Federal Way.

“We still have hope that it will be the permanent site of the university initiative,” Hemstreet said.

The contract was originally purchased a year ago by the company at $2.18 million. After the unanimous city council vote, the city will buy it back for the same price.

$2 million for the buyback will come from the strategic reserve fund and $300,000 from the contingency for unanticipated cost reserve, Hemstreet said. The city does not plan on borrowing money to fund the purchase, he said.

Ottone-Salinas is a third-generation real estate investment company based in California. The company would supposedly work with Cadius Partners Limited to develop the property.

Cadius Partners would have been responsible for the hotel’s design and construction, according to a July 2017 report in the Mirror. The city had required the hotel to be mid- to upper-scale, such as a Hilton Garden Inn, Hilton DoubleTree, Hyatt Place or Hyatt House. The city also required that the hotel include a restaurant with a lounge, along with meeting rooms and a fitness center.

Cadius was among companies that responded to the city’s request for proposal back in 2016 to build a hotel to accommodate out-of-town patrons of the Performing Arts and Event Center. The hotel was intended to be a key piece of the city’s downtown core to go along with Town Square Park, the PAEC and the Federal Way Transit Center.

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