A downtown Tacoma condominium construction project, lifeless for two years, is breathing again.
Construction resumed this week on the Midtown Lofts at 1142 S. Fawcett Ave. after the building owners signed a new private financing agreement late last week.
“We’re very happy to see construction going again,” said Tom O’Connor, head of the limited liability corporation building the eight-story, 50-unit project.
The finished building will not be condominiums for sale, but rental apartments.
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“The market for condos is still dead,” O’Connor said.
The financial crisis that felled home and condo sales nationwide and in Tacoma was part of the reason that the project’s development was halted in December 2008 when the building was 70 percent complete.
That and the financial implosion of the bank providing the construction financing, Everett’s Frontier Bank, and its ultimate takeover by Union Bank, made finishing the building impossible until the dust settled from the construction and financing shutdown.
The unfinished structure came within a few days of foreclosure in 2009, but the corporation that owned it filed for bankruptcy to halt the sale. Ultimately, that bankruptcy was dismissed when the bank offered its note for sale.
But even then, the path toward construction was difficult.
O’Connor said the lack of bank financing for such stillborn projects such as Midtown Lofts made finding new money difficult. If money was available at all, he said, it was at interest rates 10 percent to 18 percent that made the costs of completing the building too expensive.
Ultimately, he said, he found private financing to buy out the bank’s loan and to finish the incomplete work.
About 20 workers are now at the site with 75 expected when the project gets up to full speed. The project should be ready for occupancy sometime by late July or early August .
The apartment market in downtown is relatively healthy, O’Connor said, because many formerly potential buyers are now renting instead of purchasing homes.
The new units, which range from 750 to 2,200 square feet, will rent for between $850 and $2,200 per month, he said. A model unit will open in March with reservations available then for prospective renters.
The building will be more lavishly built and equipped than units that are designed from the beginning as apartments, he said.
“We built the units much more stoutly because we didn’t want to be concerned about the construction defects issues that have plagued condominium projects in the past,” he said.
The building, for example, has a steel and concrete framework. Most apartments would have a wooden framework.
The units, likewise, will have such features as granite countertops and wood and tile floors in some rooms where typical apartment construction would call for carpet and vinyl flooring.
Some of the larger units will have fireplaces and vaulted ceilings. And a few will have three bedrooms, a rarity among downtown condominiums and apartments, O’Connor said.
Ultimately, he said, he hopes to sell the units as condominiums. Considering the present state of the economy, he said, that could take awhile.