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Published: Thursday, October 24, 2013, 3:06 p.m.

Developer given extra year to start Everett hotel project

EVERETT -- A developer looking to build an eight-story hotel on a downtown parking lot will have up to an extra year to get the project underway, the City Council decided Wednesday.
The estimated $27 million project is more than five years in the making. Touchstone Corp. of Seattle already has failed to meet earlier construction timelines.
The extension will give Touchstone more time to line up financing, the main obstacle holding up progress. Authorization for the delay passed 4-1, with Councilman Ron Gipson opposed.
The developer can request up to four extensions, each lasting three months. The first two carry a penalty of $25,000 each, the second two $50,000 each.
"Last week, I expressed concerns about Touchstone's ability to obtain financing, particularly in light of another new hotel being constructed just a few blocks away," Councilman Scott Murphy said.
Since then, Courtyard by Marriott has allayed some of those concerns with a letter stating that it remains committed to the project, Murphy said. When the project is finished, the plan is for the 156-room hotel to fly the Marriott flag.
The city transferred ownership of the project site to Touchstone last winter. The half-acre lot, long used for municipal parking, sits at the southeast corner of Colby Avenue and Wall Street.
Under the property deal, the city received no cash. Instead, Everett negotiated an easement valued at $1.1 million for parking space in the hotel's future underground garage. Touchstone also agreed to strict project deadlines.
The developer in June met its obligation to secure $6 million in financing, but recently notified the city it would miss an Oct. 31 deadline to break ground because of difficulty lining up another $20 million.
If Touchstone fails to start the project within the next year, the city could claim $500,000 the developer was required to place in an escrow account. The city also could take back the property.
"I'm supportive of this amendment," Councilman Scott Bader said. "I'm very anxious going forward and will obviously be eager, as we go quarter by quarter, to see Touchstone's progress. Obviously, they've been given many opportunities and extensions."
The City Council also considered ending its relationship with Touchstone, an option that would have required starting from scratch to attract new developers. City staff said that likely would have delayed any eventual project by at least two additional years.
Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.
Story tags » EverettConstruction & PropertyGovernment

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