Seattle-based Stratford Company LLC has put Old City Hall up for sale, according to a listing posted Monday morning with Colliers International Tacoma. It’s the latest development for a building that developers had initially planned to renovate into upscale condominiums and, later, Class A office space.
Stratford purchased the 115-year-old Italian Renaissance building in May 2005 for $3.76 million, and planned to convert it into a 48-unit condominium complex. In late-2005 and early-2006, all but two of the businesses that occupied the building had moved out.
In August 2007, however, Stratford announced it would convert the building into historic Class A office space. The building once served as an indoor bazaar for small vendors. Monday’s listing, which includes a sale price of $6.95 million, puts the future of Old City Hall in limbo.
On Friday, the Tacoma Daily Index met with Mark Isner, Stratford Company’s asset director, to discuss renovations to the Washington Building (see “New tenant, lobby renovation for downtown Washington Building,” 1/7/08). During that interview, the Index learned the company would announce Monday that it planned to sell Old City Hall. Here is what Isner told the Index Friday regarding the decision to sell the building.
TACOMA DAILY INDEX: Why has the company decided to sell Old City Hall?
MARK ISNER: We had initially purchased the property with the idea of doing a condominium conversion. I think it’s been very well documented that the luxury condominium market in Tacoma has never really gelled the way that many people thought it would, there are not a lot of buyers out there, and existing projects are struggling. We took a lot longer getting to the point where we were ready to start construction. By the time we got there, number one, the market was not where we thought it would be. Number two, building costs have increased 40 percent. Also, we had some difficulty finding parking, frankly. After some really tough decisions — we’ve made some significant investments in terms of design work — we decided we would step back and do Plan B, which was to take it back to an office type situation.
INDEX: What challenges did you face in developing the office space?
ISNER: Considering what we were going to do from an office standpoint, we’ve always struggled with the amenities in that building in terms of walking into the building and thinking, ‘OK, this is what the building should be.’ Back in its hey-day, you had the 20- to 30-foot ceilings. You have the grand archways. You’ve got the 15- to 20-foot windows. All that has gone away because they built those mezzanines. It created all kinds of problems. So we had the idea that we would tear out everything on the surface and see what it looks like. We did that. From there, what we then needed in order for it to make sense, we had to find full-floor users. It wouldn’t make sense to chop it up into little pieces again. We had this opportunity to lease full floors with big open floor plans. For that whole thing to play out, it would probably take us two years. We’ve already been into it for two-and-a-half years. We are an investor-driven company. We don’t have another two years to do this. We don’t want to wait another two years. That was the process that led us to where we are today. We are going to list it and sell it to somebody who understands that and is willing to spend those two years, and start getting in there with the fresh enthusiasm. For another two years, our fund can’t carry that. We just need to cash out and find something else.
INDEX: Do you think you will find something else in Tacoma to invest in?
ISNER: We really hope so. We have good relations in the brokerage community, and with developers in the area. We are really interested in re-investing whatever we get out of Old City Hall somewhere else in the general Tacoma area, absolutely.
INDEX: Do you think it will be a challenge to sell Old City Hall to another developer, considering the challenges you faced?
ISNER: Oh, absolutely. And that’s going to be reflected in the selling price. All the smart money out there, they know exactly what it is, they look at it, how it pencils — none of that is a big secret. It’s just the nature of the business.
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.