For now, let’s forget about that proposal to build three skyscrapers in downtown Federal Way. What we have here, aside from a failure to communicate, is a real estate problem.
The latest friction between the city and Twin Development centers on buying a 4.1-acre chunk of vacant land for about $6 million. The developer is having a hard time finding the money. Twin Development needs at least 10 foreign investors to contribute $500,000 each, just to buy the land. That purchase must happen before a $350 million high-rise project breaks ground near the Federal Way Transit Center.
With the EB-5 program, the developer hopes to exploit a loophole in U.S. immigration laws and tap the wallets of rich foreigners eager to score a green card.
The developer intends to ride the coattails of a few hundred investors who, apparently at this time, don’t exist.
Last week at a tense public meeting, the council granted the developer an extension, moving the property’s closing date to March 31. A split city council demanded a business plan from the developer, or at least some evidence of the project’s direction.
This request raised a few flags. The developer refused to present a business plan, prompting three council members — Jim Ferrell, Dini Duclos and Mike Park — to reject an extension for closing on the property. According to Steve Smith of Twin Development: “We’re hesitant to disclose our trade secrets.” Regardless of whether there’s a business plan in the first place, the developer’s “trade secrets” for this project are obviously not working right now.
On that note, did the city council really go this far without seeing any type of business plan for the proposed $350 million project?
It is certainly in Federal Way’s best interests to sell that land and spur economic development. After a Canadian developer failed to secure financing for the land, Twin Development took over the pursuit.
The city owns the land outright. If the developer walks away, Federal Way will survive and eventually court another buyer. Whether that buyer will find the cash is another story. Perhaps the city can find a developer with a more practical vision for the property. Skyscrapers paint a sexy picture that in reality seems like little more than wishful thinking.
Of course, Twin Development could deliver what is promised, prove all the naysayers wrong and build an economic savior in Federal Way.
Consider that so far, the developer’s “go big or go home” approach is leaning in the direction of “go home.” Granted, the developer entered the picture just a few months ago. But is this proposal meant to be? Believe it when you see it.