Blaming Financing Problems, Mayor Announces No Deal for Troubled Civic Square Project

The hole in the ground at 4th Avenue and James Street will stay a hole in the ground for a while longer. Ansel Herz

After a political scandal and multiple deadline extensions, the proposed downtown Civic Square project will be delayed yet again. That will leave a giant hole in the middle of downtown on a lot some some advocates say should have been used for affordable housing.

Today, the mayor announced that the developers working on a deal for the Civic Square project—you know it as a fenced-in empty lot between 3rd and 4th Avenues and James and Cherry Streets—failed to find the necessary funding and the city would "explore other options." What exactly those other options are remains a mystery.

To refresh: The lot in question used to be the site of the public safety building. When that was torn down, the city made a deal with the developer Triad in 2007. The city would sell the lot for Triad to build a mixed-use office, residential, and retail development. In exchange, the developer promised to build a public plaza. But the project stalled during the recession and the city offered Triad multiple extensions on their deal.

Then, last year—as Seattle was in the midst of a building boom and housing crisis, but Triad still wasn't getting the project off the ground—a group of tenants sued the city and Triad. They alleged, as Ansel explained then, "that a double standard exists: renters get forced out of their apartments with no recourse, while developers get endless extensions on permits to construct new buildings." They eventually settled and, in a victory for tenants, Triad agreed to pay $5 million toward affordable housing if they ever actually built the Civic Square project. (With Triad is off the project now, that funding won't happen either.)

Things got even worse for Triad when an executive at the company embarrassingly tried to shakedown city council candidate Jon Grant, who'd been working with the tenants in the lawsuit. In response, Mayor Ed Murray promised to cut ties with Triad.

But then, in hopes of salvaging such a high-profile project, Murray reversed course and gave them an extension. When Triad handed the project off to another developer, Touchstone, Murray offered another extension. Today's announcement indicates that despite all the extra time, the deal Murray hoped for fell through.

In short, what all of this means is that even as the city has tried to build more affordable housing, a city-owned lot in the center of downtown has remained undeveloped. And now, that will remain the case into the foreseeable future.

The city and the developers are staying tightlipped about why they couldn't find financing for the project and what's next for the hole in the ground. In an email, a representative from Touchstone directed all questions to the mayor's office. Triad did not immediately return a request for comment.

In a statement, Murray said the city will "assess whether the project as designed is viable or whether adjustments are needed," but offered no other details. Fred Podesta, director of the city's Finance and Administrative Services Department, said in a statement, “As the city explores its options for moving forward, we will not be publicly discussing contract issues."

When I followed up with Finance and Administrative Services spokesperson Julie Moore, she said in an email, "We need time to brief elected officials before beginning to explore the full range of options. It is too early for us to speculate what options may or may not be discussed."