UPDATE: Waterfront Condo Project Under Way

CLARIFICATION:
An earlier version of this article stated that the project had a different developer than was originally selected by the city. According to a response from Ossola emailed to GlobeSt.com after the story published, Nearon and Ossola were both part of the original RFP. GlobeSt.com regrets the error.

TACOMA, WA-A 176-unit condominium tower with 19,000 sf of street-level retail is under construction along the west side of the Foss Waterway. The developer is a joint venture of Calabasas, CA-based developer M.W. Ossola and Associates and its New York-based equity partner Barrow Street Capital.

A year after its original completion date and with a different capital partner, the eight-story project is now on pace to be ready for occupancy in July 2007. Fremont Investment & Loan is providing $52 million in construction financing for the $80-million project. The loan was arranged by Peters Smyslowski and Todd Sugimoto of Holliday Fenoglio Fowler LP. The duo also arranged equity totaling $12.7 million.

The project is being constructed as part of a master planned development on the 1.7-mile historic Thea Foss Waterway in Downtown. The Foss Waterway Development Authority originally selected a Joint venture of Ossola and Nearon Enterprises of Danville, CA to develop Esplanade in May 2003. At the time, their winning $70-million proposal included 200 condominium units, a 124-room boutique hotel and 32,962 sf of retail space all in one phase.

At the time, Don Meyer, executive director of the development authority, told GlobeSt.com that while the runner-up's (Portland, OR-based Williams & Dame) $114-million proposal was better designed and included a superior quality of construction, Nearon's willingness to pay cash for both properties up front and develop the projects simultaneously won it the assignment.

The project was then scaled back twice as the development team tried to match the project to the market. By July 2004, the project had turned into a 60-room hotel topped by a few condominiums and, instead of 200 condominium units, a dozen town homes atop a retail pedestal.

Ultimately, Nearon backed out and Ossolo hooked up with Barrow Street to complete the condominium piece. Smyslowski says the hotel portion of the project is now a separate development that involves neither Ossola nor Nearon. Neither Ossola nor Meyer returned phone calls seeking comment on the changes.

"Nearon didn't like going that far out of its back yard," Smyslowski tells GlobeSt.com. "Ground-up condo development was not their cup of tea."

According to a January RFQ the city sent out for another Foss Waterway parcel, the site planned for the hotel is under a current purchase & sale agreement with a requirement to construct a boutique hotel. Seattle hotelier Bob Thurston is involved in the deal. The January RFQ was for Site 1, a 51,000-sf site also along the Western shore of the Foss Waterway. The site address is 1933 Dock Street. The subsequent RFP was issued in February. Responses are due back this week.