GlobeSt.com UPDATE: Nearon, Development Authority Focus on Reality

TACOMA, WA-Nearon Enterprises has finally matched its waterfront project here to the market, and the project has shrunk considerably. The Danville, CA-based developer in May 2003 won the right to develop the project by telling the Foss Waterway Development Authority board of directors that it would build for $70 million a 124-room hotel on one of the two parcels, a 200-unit condominium tower on the other, both with ground floor retail space. Last fall, however, the original hotel operator Nearon was working with bowed out, saying the hotel did not pencil out given the cost of new hotel construction and the average daily rate for hotel rooms in Tacoma. This spring, it said an 80-room boutique hotel would fly if it had 16 to 20 luxury condominiums on top of it, but after another 60 days of research with the prospective hotel owner-operator they decided even that was too ambitious.Sue Dowie of the FWDA tells GlobeSt.com they are down to 60 hotel rooms topped by several condominiums and, instead of a 200-room condominium tower on the other site, they now plan about one dozen town homes on top of a small retail pedestal. Nearon is working on the hotel with Bob Thurston, who owns and operates the Inn at the Market at the Pike Place Market in Downtown Seattle. The FWDA and Nearon are now negotiating a disposition and development agreement, says Dowie, after which will come the design review process and then the shoreline permitting process. The shoreline process alone will tax six months, which means construction for the project won’t likely begin until spring 2005, two years after it was originally chosen for the project.The developer that Nearon beat out for the project was Portland, OR-based Williams & Dame. The company envisioned a $114-million, four building project that included a 54-room boutique hotel and 372-condominium units in four buildings.