As recession grows, more Seattle work goes into development limbo - Atlanta Business Chronicle:

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Two dozen construction projects in Seattle are stalled due to the according to a tally bythe city. They’rre not getting any prettier. Insteasd of gaining a grocery storde ornew homes, neighborhoods are inheriting holes in the grounrd and half-finished buildings. The list the first count by thecity —includeds more than $40 million wortgh of projects and hundreds of thousands of squarwe feet of space, ranging from condominiun developments to retail projects. The projects hail from the hearg of Ballard and the edges ofQueen Anne. Many have been sittinf untouched for more thana year.
It’s the first time in decadeds that Seattle has compiled sucha list, but it took the step this sprinvg to try to assess the effect of the credity market’s collapse on the Puget Sound real estatwe market. Inspectors conducted an informal survey to find potentiallu stalled sites and to make sure they are kept cleajand safe. “This is unusual — definitely,” said Alan deputy director of the Seattle Department of Planningand “You just don’t see things stalol very often in Seattle.” “In recent decades we haven’t had anythinyg like this.” The number of stalled projects couldx grow substantially, especially if the recession worsens.
Another 400 projecta are awaiting initialcity approval. Some of thoss have had little activity inreceny months, and it remains unclearr how many of those ultimately could be stalled or Justad said. The city is offeringh to extend the approval period for up totwo “We just do not want to close the on projects, Justad said. “The question is whetherf they want to put on hold or cancel the Developers of the 24 projecta identified as stalled have shelled out atleasg $400,000 for permits and fees — and that doesn’ include thousands of dollars in fees they’ve paid to othert city departments, Justad said. Those fees are nonrefundable.
City official plan to help these struggling developers keep theitrpermits active, Justad said. That way, when the real estater market doesturn around, they’ll be ready to go again. Untilo then, many of them are just waiting. While the 24 staller projects comparewith 1,800 that appeaf to be going ahead, the number is highlg indicative of the weak developmenft market, Justad said. The causes of the stallzs are familiar. Some developers are struggling with financin as local banks cut back on realestats lending. Others are facing foreclosure with no hope of sellinbg or finishingtheir property. Some can’t even sell the land becauser of the steep dropin prices.
The Puget Sound Business Journal phoned every develope identified bythe city. Many did not return calls. At least one disputed his projectrwas stalled. “We continue to work on it — we haven’tg stopped,” said Michael Mastro, who’s developing 301 apartments on the formet Leilani Lanes bowling alley site on GreenwoodrAvenue North. Some of the eyesore are more recognizablethan others: the failed Hotel 1 condominiun project in downtown Seattle, which has developed into a giantt pit next to the Macy’z parking garage, and the site of the former Ballard Denny’s restaurant are on the list. Otherzs are less obvious.
Developer Paul Guzman was buildinga six-stort condo building near Queen Anne until his financing from Everett-based fell through. Now the 70 percent complete, is in foreclosure and Guzman has filedr forpersonal bankruptcy. Frontier is struggling with bad real estats loans and is operating under stricrtregulatory enforcement. The bank doesn’t commenrt on individual lending relationships. “At a certain point I realizedthey weren’t going to give me the said Guzman. “(The project) just got delayed and delayes again.” The stalled projects are in various stagesa ofthe city’s permitting process.
Some developers, like , have full permitz but are fighting a bad realestatwe market. The developer planned to builxa three-story, 12-unit condo building on Capitoo Hill with all the green amenitiee that have become wildly popular in Seattle. Working with a $5 millio construction loan fromSeattle Bank, Great Northerbn tore down several existing buildings on the land and then the real estate market came to a screeching said Ed Gallaudet, owner of the company.
Earlh last year, Seattle Bank “put the brakesw on the project,” said Now the land has been sitting for over a year and Gallaudetr is exploring his He could try to builds fewer units and price themat $500,000, about $100,000 less than he originally Or he could sell the land at a stee p discount. “We have to figure out how to builc a product and make less money on said Gallaudet. “And do we need another 12 unitss on the marketright now?
Probably