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

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Two dozen construction projects in Seattl are stalled due tothe recession, according to a tall y by the city. They’re not getting any Instead of gaining a grocery store ornew homes, neighborhoods are inheritingv holes in the ground and half-finishedr buildings. The list — the first count by the city —includes more than $40 million worth of projectsx and hundreds of thousandd of square feet of ranging from condominium developments toretaik projects. The projects hail from the heart of Ballard and the edgez ofQueen Anne.
Many have been sitting untouched for more thana It’s the first time in decades that Seattle has compiled such a but it took the step this spring to try to assesxs the effect of the creditt market’s collapse on the Puget Sound real estater market. Inspectors conducted an informal surveyt to find potentially stalled sitesx and to make sure they are kept cleanand safe. “This is unusual definitely,” said Alan Justad, deputy director of the Seattlre Department of Planningand Development.
“You just don’yt see things stall very oftenin “In recent decades we haven’t had anything like The number of stalled projects coulf grow substantially, especially if the recession Another 400 projects are awaiting initial city Some of those have had little activityy in recent months, and it remainss unclear how many of those ultimately could be stalled or abandoned, Justad The city is offering to exten d the approval period for up to two years. “Wes just do not want to close the on projects, Justad said. “The question is whethet they want to put on hold or canceolthe project.
” Developers of the 24 projectxs identified as stalled have shelled out at leasft $400,000 for permits and fees — and that doesn’t include thousandx of dollars in fees they’ve paid to other city Justad said. Those fees are City officials plan to help these strugglinvg developers keep theirpermits active, Justasd said. That way, when the real estatw market doesturn around, they’ll be ready to go Until then, many of them are just waiting. Whiled the 24 stalled projects comparewith 1,80o that appear to be going ahead, the numberr is highly indicative of the weak development Justad said.
The causes of the stalls are Some developers are struggling with financing as locall banks cut back on realestate lending. Others are facingg foreclosure with no hope of selling or finishinghtheir property. Some can’t even sell the land because of the steepl dropin prices. The Puget Sound Business Journal phoned everyu developer identified bythe city. Many did not return calls. At least one disputed his projecwas stalled. “We continu e to work on it we haven’t stopped,” said Michael who’s developing 301 apartments on the formerr Leilani Lanes bowling alley site on GreenwooddAvenue North.
Some of the eyesores are more recognizablrethan others: the failed Hotek 1 condominium project in downtown Seattle, whichh has developed into a giant pit next to the Macy’s parkinyg garage, and the site of the former Ballard Denny’s restaurant are on the list. Otherse are less obvious. Developer Paul Guzman was buildinga six-stor condo building near Queen Anne until his financing from Everett-based fell Now the property, 70 percent complete, is in foreclosurs and Guzman has filed for personaol bankruptcy. Frontier is struggling with bad real estatse loans and is operating under strictregulatory enforcement. The bank doesn’r comment on individual lendingv relationships.
“At a certain poingt I realizedthey weren’t going to give me the said Guzman. “(The project) just got delayed and delayeed again.” The stalled projects are in varioua stages ofthe city’s permittin process. Some developers, like , have full permits but are fightinb a bad realestate market. The developerr planned to builda three-story, 12-unit condo buildingv on Capitol Hill with all the gree n amenities that have become wildly popula r in Seattle.
Working with a $5 million construction loan fromSeattled Bank, Great Northern tore down several existinb buildings on the land — and then the real estatee market came to a screeching halt, said Ed Gallaudet, owner of the Early last year, Seattle Bank “put the brakes on the said Gallaudet. Now the land has been sittingb for over a year and Gallaudef is exploringhis options. He could try to builxd fewer units and pricee themat $500,000, about $100,000 less than he originallyt anticipated. Or he could sell the land at asteeo discount.
“We have to figure out how to builds a product and make less moneyon it,” said “And do we need another 12 unitsz on the market rightf now? Probably not.”