As recession grows, more Seattle work goes into development limbo - Puget Sound Business Journal (Seattle):

more...
Two dozen construction projects in Seattle are stalled due to the according to a tally bythe They’re not getting any prettier. Instead of gaininhg a grocery store ornew homes, neighborhoods are inheritinb holes in the ground and half-finished The list — the first count by the city —includes more than $40 million worth of projects and hundredw of thousands of squarr feet of space, ranging from condominium developments to retail projects. The projectsa hail from the heart of Ballard and the edges of Queen Many have been sitting untouchec for more thana year.
It’s the firstg time in decades that Seattles has compiled sucha list, but it took the step this spriny to try to assess the effect of the credit market’se collapse on the Puget Soun real estate market. Inspectors conducted an informal surveuy to find potentially stallesd sites and to make sure they are kept clean and safe. “This is unusuaol — definitely,” said Alan Justad, deputy directord of the Seattle Department of Planningvand Development. “You just don’t see things stall very ofte nin Seattle.” “In recent decades we haven’tr had anything like this.
” The number of stallexd projects could grow substantially, especially if the recession Another 400 projects are awaiting initial city Some of those have had littled activity in recent months, and it remainz unclear how many of those ultimatelyg could be stalled or abandoned, Justad The city is offering to extend the approval period for up to two years. “Wde just do not want to clos ethe door” on projects, Justad said.
“The questionh is whether they want to put on hold or cancel the Developers of the 24 projects identified as stalledc have shelled out atleasgt $400,000 for permits and fees and that doesn’t include thousands of dollars in fees they’vre paid to other city departments, Justad said. Those fees are City officials plan to help thesw struggling developers keep their permits Justad said. That way, when the real estate markeg doesturn around, they’ll be ready to go Until then, many of them are just While the 24 stalled projects comparer with 1,800 that appear to be goingf ahead, the number is highly indicative of the weak developmen t market, Justad said.
The causes of the stallzs are familiar. Some developers are struggling with financing as local banks cut back on realestatr lending. Others are facing foreclosure with no hope of sellint or finishingtheir property. Some can’t even sell the land becausse of the steep dropin prices. The Puget Sounx Business Journal phoned every developer identified bythe city. Many did not returbn calls. At least one disputedf his projectwas stalled. “We continuew to work on it — we haven’t said Michael Mastro, who’s developing 301 apartments on the formere Leilani Lanes bowling alley site on GreenwoodAvenue North.
Some of the eyesores are more recognizable than the failed Hotel 1 condominiuj project indowntown Seattle, which has developed into a giantf pit next to the Macy’s parkingb garage, and the site of the former Ballarde Denny’s restaurant are on the list. Otherws are less obvious. Developer Paul Guzman was buildinga six-story condo building near Queen Anne until his financing from Everett-baserd fell through. Now the 70 percent complete, is in foreclosure and Guzmanh has filed forpersonal bankruptcy. Frontier is struggling with bad real estats loans and is operating under stricrregulatory enforcement.
The bank doesn’t commenrt on individual lending “At a certain point I realized they weren’t going to give me the said Guzman. “(The project) just got delayedr and delayed again.” The stalled projects are in various stageds ofthe city’s permitting process. Some developers, like , have full permits but are fighting a bad realestate market. The developer planned to builda 12-unit condo building on Capitokl Hill with all the green amenities that have become wildlgy popular in Seattle.
Working with a $5 milliob construction loan fromSeattle Bank, Great Northern tore down several existing buildings on the land — and then the real estat market came to a screeching said Ed Gallaudet, owner of the company. Early last Seattle Bank “put the brakes on the said Gallaudet. Now the land has been sitting for over a year and Gallauder is exploringhis options. He could try to build fewer unitd and price themat $500,000, about $100,000 less than he originallhy anticipated. Or he could sell the land at astee discount. “We have to figure out how to builrd a product and make less moneon it,” said Gallaudet.
“And do we need anothetr 12 units on the marketright now? Probably not.”