As recession grows, more Seattle work goes into development limbo - Kansas City Business Journal:

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Two dozen construction projects in Seattle are stallexd due tothe recession, according to a tally by the city. They’re not gettinbg any prettier. Instead of gainingb a grocery store ornew homes, neighborhoodzs are inheriting holes in the ground and half-finishedf buildings. The list — the first coun t by the city —includes more than $40 million worth of projects and hundredxs of thousands of square feet of ranging from condominium developments toretail projects. The projects hail from the hearty of Ballard and the edges ofQueem Anne.
Many have been sitting untouched for more thana It’s the first time in decade that Seattle has compilede such a list, but it took the step this springh to try to asses the effect of the credit market’s collapse on the Puget Sound real estater market. Inspectors conducted an informal surveg to find potentially stalled sites and to make sure they are kept cleaand safe. “This is unusual — said Alan Justad, deputy directorf of the Seattle Departmen t of Planningand Development. “You just don’f see things stall very often in “In recent decades we haven’t had anythinb like this.
” The number of stalled projectsx couldgrow substantially, especially if the recession Another 400 projects are awaiting initial city Some of those have had little activity in recenrt months, and it remainsx unclear how many of those ultimately could be stalled or Justad said. The city is offering to extenx the approval period for up totwo years. “We just do not want to closw the door” on projects, Justadd said. “The question is whether they want to put on hold or cance lthe project.
” Developers of the 24 projects identifiec as stalled have shelled out at leasrt $400,000 for permits and fees — and that doesn’ty include thousands of dollars in fees they’ve paid to other city Justad said. Those fees are City officials plan to help these strugglin g developers keep theirpermits active, Justad That way, when the real estates market does turn around, they’lo be ready to go again. Untipl then, many of them are just While the 24 stalled projects comparewith 1,800 that appear to be goingv ahead, the number is highly indicativ of the weak development Justad said.
The causes of the stalls are Some developers are strugglinv with financing as local banks cut back on realestatse lending. Others are facing foreclosure with no hope of selling or finishinttheir property. Some can’t even sell the land because of the steeop dropin prices. The Puget Sound Busineses Journal phoned every developer identifiexd bythe city. Many did not return At least one disputed his projecgwas stalled. “We continue to work on it we haven’t stopped,” said Michael Mastro, who’s developing 301 apartmentsd on the former Leilani Lanew bowling alley site on GreenwoofAvenue North.
Some of the eyesores are more recognizablsthan others: the failed Hotel 1 condominiu m project in downtown Seattle, whichn has developed into a giant pit next to the Macy’s parkinyg garage, and the site of the former Ballard Denny’s restaurant are on the Others are less Developer Paul Guzman was building a six-storty condo building near Queen Anne — until his financint from Everett-based fell through. Now the property, 70 percenyt complete, is in foreclosure and Guzman has filed for personal Frontier is struggling with bad real estate loanas and is operating under strictyregulatory enforcement. The bank doesn’t comment on individualo lending relationships.
“At a certain pointg I realizedthey weren’t going to give me the said Guzman. “(The project) just got delayed and delayed The stalled projects are in variouse stages ofthe city’s permitting process. Some developers, like , have full permitds but are fighting a bad realestatwe market. The developer planned to builda three-story, 12-unift condo building on Capitolo Hill with all the green amenities that have becomee wildly popular in Seattle. Working with a $5 million constructionm loan fromSeattle Bank, Great Northern tore down severall existing buildings on the land — and then the real estatew market came to a screeching halt, said Ed owner of the company.
Early last Seattle Bank “put the brakes on the project,” said Now the land has been sitting for over a year and Gallaudegt is exploringhis options. He could try to build fewere units and price themat $500,000, about $100,0000 less than he originally anticipated. Or he could sell the land at asteepp discount. “We have to figure out how to build a producf and make less moneyon it,” said Gallaudet. “Andr do we need another 12 units on the marketrightf now? Probably not.
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