1 Hotel announced they are delaying start of the project again, this time for another 6 months due to a second redesign of the project, according to the DJC.
The redesign will add traditional hotel rooms and reduce the number of the City Suites. The plan now calls for 51 traditional condos, 44 City Suites and 192 hotel rooms.
Back in September when they announced the first delay and redesign they increased the number of City Suites from 110 to 176 because they had reservations on 100 City Suites. Now, they’re dropping that number down to 44 with only 20 firm contracts. What happened to the other 80 reservations?
As for the redesign,
Paul Brenneke, president of Portland-based Avalon has said the issue stems from concerns raised recently over how the hybrid hotel-condo units would be viewed by the city — as commercial or residential. Additionally, the developers were concerned about how a drastic slowdown in the condo-hotel market nationally would affect sales, and hence the potential to get a construction loan.
“We haven’t even attempted to get one at this point,” he said.
[1 Hotel] was approved in March 2006 under commercial rules for 88 hotel rooms, and under residential rules for 105 multifamily units. When 1 Hotel was approved the city was unaware it contained the condo-hotel units.
Brenneke said that Starwood became “nervous” last fall as the redesign was under way because the city’s land-use code “doesn’t really address” condo-hotels. Other developers were interested in building those type of units as residential rather than commercial to get more square footage, he said. This could have “opened a floodgate,” with the city perhaps coming back and deeming 1 Hotel’s condo-hotel units commercial, he said. In that case, owners would be precluded from living in them.
Me thinks they should have considered this before they started sales and construction.
The Seattle Times also reported on the subject and also indicated issues with construction financing:
A year ago, lenders were asking condo-hotel developers to presell 30 percent of their units to qualify for construction financing, he said. Now they have upped that requirement to 50 or 60 percent — difficult to achieve because prospective buyers also are having more trouble getting financing.
