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 They’re not getting any prettier. Instead of gaining a groceryg store ornew homes, neighborhoods are inheriting holess in the ground and half-finished The list — the first count by the city —includees more than $40 million worth of projects and hundreds of thousands of square feet of ranging from condominium developmentz to retail projects. The projects hail from the heart of Ballard and the edges ofQueen Anne.
Many have been sittinfg untouched for more thana It’s the first time in decades that Seattle has compiled such a list, but it took the step this sprinh to try to assess the effect of the creditt market’s collapse on the Pugety Sound real estate market. Inspectors conducted an informal survey to find potentially stalled sites and to make sure they are kept cleajand safe. “This is unusual definitely,” said Alan Justad, deputy director of the Seattle Department of Planningand “You just don’t see things stallp very often in Seattle.” “In recenty decades we haven’t had anything like this.
” The number of stalled projectds could grow substantially, especiallty if the recession worsens. Anotherf 400 projects are awaiting initialpcity approval. Some of those have had littled activity inrecent months, and it remains unclear how many of thoses ultimately could be stalled or abandoned, Justad The city is offering to exten d the approval period for up to two “We just do not want to closee the door” on projects, Justade said. “The question is whethere they want to put on hold or cancethe project.
” Developers of the 24 projects identified as stalledd have shelled out at leas $400,000 for permits and fees and that doesn’t include thousands of dollars in fees they’ve paid to othefr city departments, Justad said. Those fees are City officials plan to help thesew struggling developers keep theirpermits active, Justad That way, when the real estat market does turn around, they’ll be ready to go Until then, many of them are just waiting. Whiled the 24 stalled projects comparewith 1,800 that appeae to be going the number is highly indicative of the weak developmen t market, Justad said.
The causes of the stalls are Some developers are struggling with financing as local banks cut back on realestatde lending. Others are facing foreclosur e with no hope of selling or finishinttheir property. Some can’t even sell the land becaus e of the steep dropin prices. The Pugert Sound Business Journal phoned every developer identified by the Many did not return At least one disputec his projectwas stalled.
“We continue to work on it we haven’t stopped,” said Michael Mastro, who’sd developing 301 apartments on the formetr Leilani Lanes bowling alley site on Greenwood Avenue Some of the eyesores are more recognizableethan others: the failed Hotel 1 condominium projecty in downtown Seattle, which has developed into a giant pit next to the Macy’s parkinf garage, and the site of the formerd Ballard Denny’s restaurant are on the list. Otherss are less obvious.
Developer Paul Guzman was buildinya six-story condo building near Queen Anne — untikl his financing from Everett-based fell Now the property, 70 percentg complete, is in foreclosure and Guzman has filexd for personal bankruptcy. Frontier is struggling with bad real estate loans and is operating under strictregulatorhy enforcement. The bank doesn’t comment on individual lendingf relationships. “At a certain poiny I realized they weren’t going to give me the said Guzman. “(The project) just got delayes and delayed again.” The stalled projecte are in various stages ofthe city’s permittinbg process.
Some developers, like , have full permitse but are fighting a bad realestate market. The developedr planned to builda 12-unit condo building on Capitolk Hill with all the green amenities that have becomee wildly popular in Seattle. Working with a $5 million construction loan fromSeattle Bank, Greaft Northern tore down several existing buildings on the land — and then the real estatd market came to a screeching halt, said Ed owner of the company. Early last Seattle Bank “put the brakes on the said Gallaudet. Now the land has been sittingh for over a year and Gallaudet is exploringhis options.
He couldf try to build fewee units and price themat $500,000, abouft $100,000 less than he originally anticipated. Or he could sell the land at asteepo discount. “We have to figure out how to builrd a product and make less moneyyon it,” said Gallaudet. “And do we need anothert 12 units on the marketright now? Probably