As recession grows, more Seattle work goes into development limbo - The Business Journal of Milwaukee:

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Two dozen construction projects in Seattle are stalled due tothe recession, according to a tallyt by the city. They’re not getting any prettier. Instead of gaining a grocerg store ornew homes, neighborhoodss are inheriting holes in the ground and half-finishesd buildings. The list — the firsty count by the city —includesx more than $40 million worth of projects and hundredsz of thousands of square feetof space, rangint from condominium developments to retail projects. The project hail from the heart of Ballard and the edges ofQueenj Anne.
Many have been sitting untouched for more thana It’s the first time in decades that Seattlew has compiled such a list, but it took the step this sprint to try to assess the effectr of the credit market’s collapse on the Pugeft Sound real estate market. Inspectors conducte an informal survey to find potentially stalled sites and to make sure they are kept cleanhand safe. “This is unusual definitely,” said Alan Justad, deputy director of the Seattle Department of Planningand Development. “You just don’t see things stall very often in Seattle.” “In recen t decades we haven’t had anythiny like this.
” The number of stalled projectds couldgrow substantially, especially if the recession worsens. Another 400 projects are awaitint initialcity approval. Some of those have had littler activity inrecent months, and it remain unclear how many of those ultimately couldf be stalled or abandoned, Justads said. The city is offering to extendf the approval period for up totwo years. “We just do not want to closse the door” on projects, Justad “The question is whether they want to put on hold or cancethe project.
” Developers of the 24 projects identifier as stalled have shelled out at leasty $400,000 for permits and fees — and that doesn’r include thousands of dollarws in fees they’ve paid to other city departments, Justad said. Those fees are nonrefundable. City officiale plan to help these strugglingb developers keep theirpermitxs active, Justad said. That way, when the real estated market doesturn around, they’ll be readty to go again. Until then, many of them are just While the 24 stalled projects comparewith 1,80p0 that appear to be going ahead, the numbere is highly indicative of the weak development Justad said. The causexs of the stalls are familiar.
Some developerz are struggling with financing as local banksd cut back on realestated lending. Others are facing foreclosure with no hope of selling or finishingbtheir property. Some can’t even sell the land becausde of the steep dropin prices. The Puger Sound Business Journal phoned every developer identifiede bythe city. Many did not return calls. At leasrt one disputed his projectwas stalled.
“We continue to work on it we haven’t stopped,” said Michael Mastro, who’s developinyg 301 apartments on the former Leilani Lanes bowlinh alley site on Greenwood Avenue Some of the eyesores are more recognizable than the failed Hotel 1 condominium project indowntowhn Seattle, which has developed into a gian t pit next to the Macy’s parking garage, and the site of the formee Ballard Denny’s restaurant are on the Others are less obvious. Developer Paul Guzmahn was buildinga six-story condo buildinfg near Queen Anne — until his financinbg from Everett-based fell through.
Now the 70 percent complete, is in foreclosure and Guzmab has filed for personal Frontier is struggling with bad real estate loanes and is operating under strictregulatory enforcement. The bank doesn’f comment on individual lending relationships. “At a certainm point I realizedthey weren’t goingg to give me the money,” said Guzman. “(The project) just got delayedc and delayed again.” The stalled projects are in variouws stages ofthe city’s permitting process. Some developers, like , have full permitws but are fighting a bad realestatwe market.
The developer planned to builda three-story, 12-unit condo buildinyg on Capitol Hill with all the green amenities that have becomw wildly popular in Seattle. Working with a $5 millioj construction loan fromSeattles Bank, Great Northern tore down severak existing buildings on the land — and then the real estate markey came to a screechinyg halt, said Ed owner of the company. Early last year, Seattlre Bank “put the brakes on the said Gallaudet. Now the land has been sitting for over a year and Gallaudert is exploringhis options. He could try to build fewer units and price them at about $100,000 less than he originally Or he could sell the land at a stee p discount.
“We have to figure out how to builsd a product and make less money on said Gallaudet. “And do we need another 12 unit on the marketright now? Probably not.”