Cadius Partners Limited with Gustin Property Group are the sole developers interested in building a hotel near the future Performing Arts and Event Center.
Working with Mosaic Architecture, the firms proposed the construction of a 130-room “upper-mid-scale to upper scale hotel” on 1.8 acres at 2141 S. 314th St. in Federal Way.
“I think the region is exploding with growth, so I think there are a number of opportunities out there, but we’ve been looking and working with partners in the region to submit applications,” said Mayor Jim Ferrell in a phone interview when asked for his thoughts on why only one proposal was submitted. “And we’re really excited with what we’ve seen here with the Cadius project, the Cadius proposal.”
Cadius is based in Bozeman, Montana; Gustin is based in Albuquerque, New Mexico; and Mosaic Architecture is based in Helena, Montana.
The proposal illustrates a vision similar to the city’s and includes a grand staircase connecting the lower-level Town Square Park and the Federal Way Transit Center to the hotel and performing arts center.
“The connectivity of the properties in Town Center is absolutely essential,” Ferrell said about the staircase.
The properties are currently divided by a 20-foot wall.
The proposal states the hotel’s total square footage will reach 75,000 square feet of hotel and will be in an “L” or “V” shape, which would provide “maximum views toward Mt. Rainier.”
There may also be a four-story tower (59 feet) that could be topped with a penthouse/lounge area that would bring the total height to 68-70 feet.
According to city documents, the city’s zoning allows a hotel in the City Center Frame to be 65 feet in height with the “potential for additional height upon meeting specific criteria.”
“A brand has not been selected for the hotel, but it will be a Hilton, Marriott or Hyatt product,” the proposal states.
The hotel could also feature a restaurant, which the developers believe will be run by a third party to “maximize the profitability and profile of the restaurant.”
The hotel’s close proximity to the Performing Arts and Event Center is apparent in the developers’ proposal.
“We anticipate working with the PAEC on the use of the meeting space for hotel meetings and coordinating rooms for events and performances at the PAEC,” the proposal continues. “Close coordination between the hotel and PAEC will be important for maximizing each’s benefit to and from the other.”
The land the proposed hotel sits on is city-owned – 1.3 acres on Town Center III and a half-acre on the Performing Arts and Event Center site for shared parking – but the city will soon start negotiations with the intent of selling that hotel property to the developers.
The sale of the hotel property will likely go toward paying down the debt of the Town Center III, although the mayor said the entire sale of the Town Center III could go toward the cost of the Performing Arts and Event Center in the future.
The Federal Way City Council approved the purchase of Town Center III, also known as the former-Target site, for $8.2 million in November 2014.
The city used cash reserves up front before they internally bonded those funds. According to a previous report, the city’s short-term plan was to finance up to $385,050 in interest over a three-year time frame with hopes of selling to the entire Town Center III property to a developer.
Although no developers submitted a proposal for the entire 7.5 acres of Town Center III when the city issued the first Request for Proposals in winter 2015, Ferrell said Cadius and Gustin are interested in developing that land as well.
“So while we put out the RFP for the hotel, what we got back is something that will address the entire property,” Ferrell said, noting that the city will first hash out the details of the hotel before they address the entire Town Center III site. “What we’ll probably do is, once again, address the hotel first and maybe even just the sale of that property, but we’ll see – maybe it encompasses everything.”
Ferrell said that because Cadius and Gustin’s proposed plan encompasses the entire site, he’s not sure Requests for Proposal are necessary for the Town Center III site anymore.
“The focus, initially, will be on the hotel, but I’d like to see us really work toward some sort of understanding or agreement that we’re working toward the full build-out,” Ferrell said.
Although the mayor wouldn’t disclose for how much the city will try to sell the hotel land – it will be “subject to negotiation” – the developers’ proposal states that Federal Way Economic Development Director Tim Johnson informed them that the price of the land is $27 per square foot.
“We believe this to be a reasonable price for the land,” the documents state. “That being said, we fully expect to participate in the cost of the ‘grand staircase’ and in the event a parking garage is eventually built, we would agree to some sort of long-term use agreement to defray the cost.”
Ferrell said sharing the cost of the staircase is something the city is going to explore in the negotiation process, which will take place this summer.
The developers are expected to take on the rest of the project’s cost and will seek bids from local, regional and national contractors.
Design and construction of the hotel will provide between 75 and 125 full-time jobs, hotel operations will generate 25 to 30 full-time employees and the restaurant and lounge will provide 15 to 30 jobs.
The City Council is expected to vote on the proposal by August, which would allow the developers and architecture firm to begin design in September. The proposal anticipates the entire project, grand staircase included, to be complete by May 2018.
“It’s important to make sure that we’re doing what’s in the best interest of the city and that we negotiate with that in mind,” Ferrell said. “I think this is really truly exciting for the future of this city.”
