Article by Todd Matthews

It sits on the corner of South Ninth and Commerce like an 80-year-old, 12-story monolith.

Some people see it as everything that is wrong with downtown -- a concentration of low-income and senior housing in a neighborhood where nearby merchants complain of shoplifting, drug-dealers, and panhandlers.

Others see it as Tacoma's future covered in dust and grime -- with a little creative vision, it could be the home of a refurbished hotel that could bring some historic luster back to the center city.

What's for certain is this: rarely has a development deal been through as much turmoil as that which surrounds the Winthrop.

Last Friday, city leaders announced San Francisco-developer AF Evans negotiated a 60-day purchase agreement with the building's owner to develop the building into a multi-million-dollar blend of market-rate and low-income affordable housing with improved commercial storefronts and a restored Crystal Ballroom, restaurant, and lounge.

The news came on the heels of an earlier agreement that expired two months ago. In June, AF Evans received a state loan that would have completed funding for the original cost of the project -- $21 million. However, by the time the loan was approved, construction costs rose and a funding shortfall existed. The purchase agreement expired in July.

In the meantime, Aberdeen-based Quigg Developers has been quietly putting together a financing package that would turn the building into a restored, four-star historic hotel. Quigg's $40 million plan calls for a new parking garage, as well as relocation costs for Winthrop's 194 tenants displaced by the development.

On Tuesday, Tacoma City Council will vote on a resolution that would give $1 million to AF Evans to help complete their development plans.

While news about the project's on-the-market, off-the-market status has been dizzying at times, a number of downtown merchants and city leaders are watching the issue closely in hopes that whatever happens to the Winthrop will turn a troubled part of downtown around.

"A hotel would be the best thing to happen to this end of town," says downtown merchant and property owner Laura Hanan. "There's nothing to anchor this end of town except for low-income housing." Hanan, owner of the Rowland Building and Brick and Mortar Gallery on Pacific Avenue, has spent four years documenting the crime and nuisance behaviors she says are tied to the Winthrop.

"Drug dealers continue to operate out of there," says Hanan. "I watched them all weekend. That's the first thing I'd like to see -- the Winthrop be brought under control."

Turning the Winthrop into a four-star hotel could help balance out a discrepancy between two ends of downtown, says Hanan. While the south end of town boasts three museums and the University of Washington campus, the north end is home to three high-density, low-income housing buildings.

Fellow downtown merchant Kris Blondin agrees that the Winthrop's current use has impacted business in her neighborhood.

(Phone messages to the Winthrop management onsite and through its property manager, Coast Real Estate Services, were not returned).

Like Hanan, Blondin believes developing the building into a four-star hotel will turn her neighborhood around. She is hoping City Council will vote against loaning $1 million to AF Evans.

"I really hope that they see it for what it is," says Blondin. "It's an issue of taking a landmark and really using it as a focal point. I think it could be great."

But Councilmember Tom Stenger sees merit in supporting AF Evans and the resolution. He notes that the $1 million request would go toward renovating the building's public rooms -- namely, the restaurant, lounge, Daffodil Room, and cafe. "The position the city should be in is that we are probably going to have to financially help whoever does that work," says Stenger.

Stenger also argues that AF Evans could bring a level of control over the Winthrop that merchants like Hanan are asking for. "I think that if AF Evans were to own it, it would be a significant improvement," adds Stenger. "AF Evans is a responsible property manager. If AF Evans moved in there, we would see the problems disappear. Whether AF Evans owns it or Quigg, we'll see improvements."

Stenger points out that the city should be looking at the issue in the context of a purchase agreement between AF Evans and the building's owner -- not other development hopes.

(A phone message requesting comment from AF Evans was not returned).

Tacoma Mayor Bill Baarsma, however, is pushing for a hotel renovation. He says developing the Winthrop is similar to the investment made during the 1990s at Union Station -- a move that many argue spurred development in downtown's south end.

Baarsma says he was surprised by AF Evans's recent bid.

"This cat has nine lives," he says. "I thought [AF Evans was] out of the picture. Now they are back and asking taxpayers to cough up an additional million dollars.

"I look at this as opportunity costs," adds Baarsma, referring to the $1 million request. "Once we allocate those dollars to AF Evans, we lose the opportunity to use those funds [elsewhere]."

The mayor says he is familiar with the concerns of merchants near the Winthrop. Last December, City Manager Eric Anderson ordered the Tacoma Fire Department to inspect the building. According to a city report, inspectors found 41 corrections over a two-day period. Inspectors also discovered a corpse, adds Baarsma.

"I'm not criticizing the good souls who live in that building who are trying to make it," says Baarsma. "Some of them are trying to get back into the mainstream. But what inevitably happens is that it becomes a magnet for people who perpetrate and victimize those people who are susceptible to that -- whether it's sale of drugs, prostitution, or whatever the case may be."

Public safety issues raised by Baarsma and downtown merchants are consistent with a report released earlier this year by the New Tacoma Neighborhood Council, which includes downtown. The report, prepared March 30 after a community meeting with residents, merchants, property owners, and city leaders, outlines recommendations for improving the area around South Ninth and Commerce -- and identifies many of the problems that plague the neighborhood.

"This neighborhood has great potential for development, but it currently struggles," the report reads. "Small businesses have a hard time and empty storefronts linger . . . . Some people who do visit are wary of the presence of panhandlers, drug activity, and other nuisance behaviors."

According to statistics from the Business Improvement Area (BIA), 20.8 percent of downtown incident reports compiled by BIA bike patrols from January through March of this year occurred near the Winthrop.

But developer Tim Quigg says a four-star hotel would do more to improve the area. According to Quigg, his plan would create 200-300 jobs at the Winthrop Hotel, and spur tourist activity.

"We need more people visiting downtown, walking the streets, and enjoying the traditions of a city," says Quigg. "It was designed as a four-star hotel. Anything else is going to fail. If you go take a look at it, from Sea-Tac to the Columbia River to the coast, it's a unique property."

Currently, downtown is home to the Best Western Tacoma Dome Hotel, Courtyard by Marriott, and Sheraton Hotel. According to the Wolfgang Rood Hospitality Report, an industry standard that gauges the hospitality industry, the hotel occupancy rate in Pierce County was 81.3 percent in June (the most recent month available).

Can the area support another hotel?

Quigg says his hotel idea is different from others.

"It's a different experience at a four-star hotel," he says. Quigg says the Winthrop would be more akin to historic hotels in Seattle (Sorrento, Alexis, Mayflower Park, and Fairmont Olympic) and Spokane (Davenport Hotel). "Many travelers are looking for that four-star experience."

Mayor Baarsma agrees.

"We are the only mid-sized city in the region that does not have a grand old hotel," he says. "Seattle, Portland, Vancouver, Spokane -- nothing in Tacoma."

He points to a development project across the street from the Davenport Hotel in Spokane -- namely, a companion building with 300 rooms. "Already, Spokane has more hotels than we do," says Baarsma. "And we are competing with Spokane."

Though AF Evans's move takes the property off the market, Quigg says he is still actively pursuing his development goal by meeting with potential investors and determining costs. "We're going to keep meeting," says Quigg. "We're going to meet once a week from here on out."

Whatever happens to the building, any development could continue an investment momentum in the area: contractors are busy finishing a $5.1 million renovation to the Pantages Theater at South Ninth and Broadway; across the street, Colliers International in Tacoma is completing renovations to a commercial building that will house a fine furnishings importer, and space for prospective restaurateurs; the city was recently awarded $944,000 in transportation funding from the state to restore the Spanish Steps near the Elk's building; and Council also approved a Local Improvement District plan for the Broadway neighborhood, and has met with property owners to discuss future improvements.

"I'm hopeful the council will think long and hard about the long-term interests of the district," says Baarsma.

This article originally appeared in the 7 September 2006 edition of the Tacoma Daily Index