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September 18, 2019

Da Li and Moriguchi family to partner on taller hotel-apartment tower at 5th and Jackson

By BRIAN MILLER
Real Estate Editor



Development plans for a parking lot at 500 S. Jackson St. have shifted from a self-directed project by the owner, the Moriguchi family (of Uwajimaya), to a partnership with Da Li Development USA. The latter is an arm of the Hsieh family's Da Li Development Co. Ltd., a developer and contractor in Taiwan.

Da Li's Kevin Hsieh and Tom Doig told the DJC yesterday that the company will build its third Seattle project on a site that's kitty-corner to its 17-story Koda condominium tower, now under construction at 450 S. Main St.

“They're gonna partner with us,” says Doig of the Moriguchis, longtime Chinatown-International District merchants and landowners.

The planned 27-story tower — to include apartments over a hotel and retail/commercial space, plus underground parking — will be called Fujimatsu Village. That name, Hsieh explains, is significant in that it honors Fujimatsu Moriguchi, who founded Uwajimaya in 1928. The family patriarch is his son, Tomio Moriguchi, now retired as CEO.

As the DJC first reported in 2017, it was Tomio Moriguchi who initially sought to develop the lot, using the Pritzker Prize-winning Japanese architect Shigeru Ban to design a 24-story hotel/apartment tower.

That plan is dead. Ban is out. MG2 is the new architect for what will become the tallest building in the Chinatown-International District. (The 27,000-square-foot corner, at Fifth Avenue South, was upzoned two years ago.)

“It's very collaborative. The partnership with Tomio went all the way back to the Koda site,” says Hsieh. “Tomio sold us the Koda site.” (That was for $5.5 million in 2016.) “Tomio's been to Taiwan; he's done due diligence.”

Community outreach for Fujimatsu Village has already begun, says Doig, and Da Li will present its plans to the International Special Review District board later this fall.

Fujimatsu Village could include up to 40,000 square feet of retail/commercial space on its lower floors. A 200-room hotel would run up through the 12th floor. Levels 13 through 27 would have 160 rental units.

Two levels of underground parking, accessed from the alley to the east, would have 170 stalls. A bike room with 200 stalls is also indicated. The project is listed with a nominal value of $138 million.

“We're probably two years away from breaking ground,” says Doig.

“It'll be a long-term hold,” says Hsieh, meaning for both the Moriguchis and his family-run company.

And though Da Li, back in Taiwan, hasn't previously developed hotels, “The family does have experience in hotel operations,” with about a half-dozen properties under a local Taiwanese hotel brand.

No hotel brand or operator — local or national — has been selected for Fujimatsu Village. Doig says that, “Currently were looking and three and one-half to four stars.”

He suspects that business travelers will be the focus. “We're 35 minutes from the airport,” with the light rail station only steps away. Also, he and Hsieh note, sports tourism can help to fill hotels on game weekends; and culinary tourism is starting to be felt in the district, too.

The hotel will be either limited or full service, which will determine the final amount of retail and restaurant space. “The concept is to have retail activity on all three sides,” says Hsieh. The Moriguchis will necessarily have a say on who those retailers and restaurateurs will be.

“Tomio has that vision,” says Hsieh. At the Moriguchis' nearby Publix, “He's really putting in good retailers.” Hsieh also notes that international brands like the Taipei-founded 85 Degrees Celsius Bakery Cafe, which recently opened at Fifth and Jackson, are making inroads in the district, helping enliven the food scene.

Doig says the that a “village street” will separate some of the retail along Fifth from the main tower pushed east toward the alley. MG2 describes a three-story podium for retail and likely hotel amenities. The hotel entrance will probably be on Jackson, with the main apartment entrance on Main.

Da Li entered the U.S. market in 2015, and began shopping for sites in Seattle the following year. Compared with Los Angeles or San Francisco, says Hsieh, “We feel there's more potential.” And Seattle's land prices, while high, aren't so high as those two cities.

Hsieh cites the tech sector and light rail investment — $54 billion for Sound Transit 3 — as “a really good sign that the city is dedicated” to transit. In selecting three sites, and now looking for a fourth, he likes the Chinatown-International District, downtown Bellevue and the University District as areas that are — or soon will be — served by light rail

Seattle is now Da Li's U.S. base of operations, and Hsieh now lives in Bellevue. The company has two other projects underway:

• Koda should top out early next year, says Doig, and be completed by the end of 2020. Its 203 units are about 50% sold by Realogics Sotheby's International Realty, with prices running from around $400,000 to $1.2 million. “I don't think you can find that kind of price range” at other competing condos, says Hsieh.

KMD Architects is the architect, and PCL Construction is the general contractor.

Why make the firm's first Seattle project condos instead of apartments? “We got a lot of feedback about the risk of condos,” says Hsieh. “Condos were just our past area of expertise back in Taiwan.” There, the company is finishing up on three condominium towers with over 20 stories. “We've done buildings over 35 stories,” says Hsieh

Hsieh says his family owns 100% of Koda, with “no other equity partners.” It took out a construction loan from Taiwan Cooperative Bank, and will cash out of the building once the units and retail space are sold.

• At 222 Fifth Ave. N., Gensler is the architect for a planned eight-story office building to replace the McDonald's east of Seattle Center. Da Li paid about $18 million for the 24,800-square-foot property, on the corner of Thomas Street.

Gensler says the building will have about 164,000 square feet of offices, 9,500 square feet of retail and 80 parking stalls below grade. Doig says that floor plates will average around 21,000 square feet, and that the amenities will be concentrated on the top of the building. An open staircase overlooking Thomas is meant “to encourage movement.”

Doig says Da Li is willing to build on spec, but is also now talking to brokers about marketing the unnamed building. Doig, who was previously with PCL Construction, says, “We're abut halfway through schematics.” He hopes to begin design review in November and break ground next year.

The building will be walkable both to South Lake Union and Seattle Center.

Hsieh says of the office project, “We've done a few but that's not our main portfolio” back in Taiwan.

As with Fujimatsu Village, he describes 222 Fifth as “a long-term hold,” an asset that Da Li will keep — unlike Koda. Of that project, he says, “When we came here, we wanted to be more conservative. We took it one step at a time. We're slowly building our team.”

Doig has been one key hire. Da Li presently has its small office at the construction office for Koda, also near the Chinatown-International District; then it will seek permanent digs. “We want to be here long-term,” says Hsieh.

“It's not easy to find sites,” says Hsieh. “We went after a few sites on Brooklyn,” in the U District, but without success. On the demand side, for both office and residential tenants, “The market has slowed, but we do have confidence in the market. We do believe there's more coming”


 


Brian Miller can be reached by email at brian.miller@djc.com or by phone at (206) 219-6517.




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