New hotel could rise 10 stories over Everett

EVERETT — A high-rise hotel with suites featuring bay and mountain views, ground floor shops and a corner restaurant in downtown Everett could open to guests by late 2011.

Seattle developer Touchstone Corp. was hand-picked by the Everett City Council on Wednesday to transform a city-owned parking lot on Wall Street into an eight- to 10-story hotel.

Everett and the developer will enter a 90-day negotiation period to work out a sale and development deal.

Skotdal Real Estate of Everett also submitted a proposal for the site but was edged out because Touchstone’s application more closely followed the city’s current vision for the site, city officials said.

“Both projects were excellent,” said City Councilman Arlan Hatloe, who was chairman of the committee that recommended Touchstone.

Skotdal Real Estate, downtown Everett’s largest landlord and a key player in the renaissance of the city’s core, expressed disappointment in the city’s selection process.

Skotdal president Craig Skotdal contends the city’s requirement that the building be at least eight stories tall killed off competition and inflated the building’s price tag.

That’s because an eight-story building must be built of concrete and steel, which is roughly 30 percent more expensive than wood- or metal-frame buildings, he said.

“Now, instead of having eight or 10 high-quality projects to consider, the City Council only had two,” Skotdal said. “If we hadn’t taken a creative approach to the process, only one bidder ultimately would have stepped forward. Any way you slice it, that’s not a good outcome.”

Some of the best examples of urban revitalization, including Seattle’s South Lake Union neighborhood and Portland’s Pearl District, include shorter buildings, Skotdal said.

His company is currently working on a seven-story, 200-unit residential and retail project next to Everett Public Library.

Touchstone’s proposal prevailed because it met the minimum height requirement and it included a hotel, city officials said.

The developer’s plan calls for 150 to 180 hotel rooms under the direction of a national chain with an indoor swimming pool, a restaurant and an underground parking garage.

The Holiday Inn on Pine Street has 243 rooms and Best Western Cascadia Inn on Pacific Avenue has 134 rooms.

Touchstone is offering to pay the city up to $2 million for the land, which sits two blocks west of Comcast Arena at the Everett Events Center, a mile from I-5 and a short drive to Boeing’s assembly plant.

An appraisal last year pegged the value of the city’s lot at $1.25 million to $1.45 million.

Touchstone’s owner Douglas Howe said the hotel likely would open under Marriot’s Courtyard chain.

Touchstone has completed several successful developments in the Puget Sound area, including a 150-room, three-story hotel in Kirkland and a six-story office-retail building in Seattle’s Belltown district.

Later this year, it plans to open a 28-story office building in downtown Seattle’s Denny Triangle neighborhood.

Everett’s Office of Economic Development first pitched selling the city’s land in early 2007.

Officials hoped they could find a private developer to pour millions of dollars into their vision for a mixed-use development encompassing the Culmback Building at 3013 Colby Ave. and an adjoining parking lot.

Ten companies expressed interest. But the market didn’t bear out the plan, sending city officials back to the drawing board.

They eliminated a requirement that the developer include the Culmback Building in any plans. Including it would have required that the 1920s brick building undergo seismic retrofits and fire-code updates or simply be demolished.

This January, the city took its plan back to the market. This time it included just the 19,000-square-foot parking lot.

Touchstone and Skotdal were the only companies to submit proposals.

City Councilman Mark Olson said the tepid response could mean the city is still misreading downtown’s real estate market.

The plan submitted by Skotdal resembled what the city originally envisioned for the site. It included construction of five- and six-story buildings on an entire block in two phases.

The first phase called for a 95-unit residential building with street-level retail shops. A second stage would see an office building rise on the northeast corner of Pacific and Colby avenues.

Reporter David Chircop: 425-339-3429 or dchircop@heraldnet.com.