Ask any commercial property owner in downtown Tacoma about their business, and they will likely tell you it hasn’t been a good year. Russell Investments, downtown’s largest employer and a local business since 1936, moved its 900-plus employees out of a high-rise building and into the former WaMu Center in downtown Seattle. And the long recession has cast a pall over the industry.
It’s been pointedly difficult for Seattle-based The Stratford Company, which owns two huge and highly visible buildings in downtown Tacoma — Old City Hall and The Washington Building. In November, water pipes in Old City Hall — the iconic 117-year-old building located at 625 Commerce Street — froze then burst following an arctic storm, spreading 30,000 gallons of water throughout the six-story building and causing much damage. On Dec. 9, a law firm for the Union Bank of California published a legal notice in the Tacoma Daily Index announcing plans to auction off Old City Hall on Jan. 7 if the ownership group, The Stratford Company and Old City Hall LLC, fails to pay approximately $320,000 in missed mortgage payments, late fees, and related costs by Dec. 27.
At The Washington Building — the 17-story, 85-year-old high-rise located at 1019 Pacific Avenue — the Washington State Attorney General’s Office moved down the street to recently renovated, LEED-Platinum Pacific Plaza. The move left six floors vacant in Stratford’s building.
George Webb, CEO and founder of The Stratford Company, was in town on Tuesday to update Tacoma City Council on plans to address water damage at Old City Hall. Webb told councilmembers he will spend the next 45 days emptying the building of water-damaged drywall and carpet, as well as any other hazardous materials. He also said he is certain his company can prevent a foreclosure on Old City Hall and has long-term plans for the building.
On Thursday, Webb responded to a series of questions posed by the Tacoma Daily Index.
TACOMA DAILY INDEX: Looking at some of the properties in Stratford’s portfolio, it appears the attorney general’s office moved out of six floors in the Washington Building in downtown Tacoma earlier this year.
GEORGE WEBB: Yes. the Attorney General made the we believe unconscionable decision to double their rent by moving in to brand new Class A office space in this time of fiscal crisis for our State. This choice has cost taxpayers more than $5 million. We were appalled at this choice, but have moved on at the property. Today we completed a capital infusion for The Washington Building that will enable us to carry through this deep downcycle in the Tacoma central business district office market, and we are actively considering increased marketing options for the property.
INDEX: And there is the issue at Old City Hall — from what I gather, $120,000 in late payments cited by the bank in March; now $320,000 in late payments cited by the bank [earlier this month]. How will some of these other issues affect Stratford’s ability to complete the repairs on Old City Hall and prevent the auction?
WEBB: It has been a difficult downcycle in commercial real estate and our properties are no exception. However, we have many other properties that you have not mentioned that are performing strongly. Working closely with our lenders and really hard on operations at these properties has enabled us to carry through thus far, and we believe we are well positioned to get our stalled projects under way as commercial real estate debt and equity markets return to life. We are also starting to play offense again having closed on one acquisition in 2010 and with another under contract now — both in Seattle.
INDEX: During Tuesday’s Tacoma City Council study session, you mentioned you are in negotiations with Union Bank regarding the foreclosure and pending auction [of Old City Hall] on Jan. 7. Specifically, what does that mean? What kind of conversations have you had with the bank? What sort of efforts have been made to prevent the auction and foreclosure?
WEBB: We have been in close dialog with Union Bank for some time and are nearing an agreement.
INDEX: You mentioned Tuesday you have long-term goals for Old City Hall and will spend the next 45 days on clean-up efforts and re-positioning the building. Yet the building is currently up for sale and could be auctioned on Jan. 7, before that 45-day period. How do long-term goals fit into the short-term goals of the possible auction and having the building up for sale. Could you please clarify?
WEBB: To clarify, the property is not listed for sale. As I said, we have been in close dialog with Union Bank for some time and are nearing an agreement. We are planning to complete the clean-up at the property and begin work on plans for the future.
To read the Tacoma Daily Index‘s complete and comprehensive coverage of Old City Hall, click on the following links:
- Building inspector’s report shows more work needed at ‘derelict’ Old City Hall (Tacoma Daily Index, January 19, 2012)
- Transient linked to Old City Hall fire (Tacoma Daily Index, January 6, 2012)
- Hope for Old City Hall? Historic Tacoma tours iconic, derelict building (Tacoma Daily Index, June 7, 2011)
- Inside Old City Hall (Tacoma Daily Index, May 26, 2011)
- Historic preservation group calls Tacoma’s Old City Hall ‘endangered’ (Tacoma Daily Index, May 24, 2011)
- More trouble for Old City Hall? (Tacoma Daily Index, March 28, 2011)
- Inspector’s report offers grim glimpse inside ‘derelict’ Old City Hall (Tacoma Daily Index, January 4, 2011)
- Historic Buildings, Historic Recession: Questions for Old City Hall owner George Webb (Tacoma Daily Index, December 17, 2010)
- Hope for Old City Hall? Building clean-up, foreclosure prevention efforts under way, says owner(Tacoma Daily Index, December 14, 2010)
- Tacoma City Council to receive Old City Hall update Dec. 14 (Tacoma Daily Index, December 10, 2010)
- Bank publishes notice to foreclose on Old City Hall; City to study public development authority for historic buildings (Tacoma Daily Index, December 9, 2010)
- Old City Hall for sale (Tacoma Daily Index, January 7, 2008)
Todd Matthews is editor of the Tacoma Daily Index and recipient of an award for Outstanding Achievement in Media from the Washington State Department of Archaeology and Historic Preservation for his work covering historic preservation in Tacoma and Pierce County. He has earned four awards from the Society of Professional Journalists, including third-place honors for his feature article about the University of Washington’s Innocence Project; first-place honors for his feature article about Seattle’s bike messengers; third-place honors for his feature interview with Prison Legal News founder Paul Wright; and second-place honors for his feature article about whistle-blowers in Washington State. His work has also appeared in All About Jazz, City Arts Tacoma, Earshot Jazz, Homeland Security Today, Jazz Steps, Journal of the San Juans, Lynnwood-Mountlake Terrace Enterprise, Prison Legal News, Rain Taxi, Real Change, Seattle Business Monthly, Seattle magazine, Tablet, Washington CEO, Washington Law & Politics, and Washington Free Press. He is a graduate of the University of Washington and holds a bachelor’s degree in communications. His journalism is collected online at wahmee.com.