May 22, 2023

More sales offerings, drama, and construction at Point Ruston

Map via JLL [enlarge]

JLL is offering three future development pads (red). Circled in blue are five planned apartment buildings; the public market is done.

Down in Pierce County, construction has been steadily advancing at Point Ruston, the 97-acre former Asarco smelting plant facing Commencement Bay. (The development takes its name from the larger peninsula.)

The Cohen family and partners acquired the EPA Superfund site in 2006, did the costly cleanup, then began building about a decade ago.

Various completed portions of the phased, mixed-use development have since been sold, as planned, and more sales will surely follow.

JLL is now offering three building sites for future retail developers. It's also selling about 80,000 square feet of completed and fully leased commercial space. That's home to various retailers, restaurants and the Century Theatre, which is operated by Cinemark. The sales listings appeared last year, and continued into the spring of this year.

At the same time, however, private lender TerraCotta Credit REIT LLC initiated foreclosure proceedings earlier this month in Pierce County, calling in six loans now worth about $70 million. Add in the associated fees and penalties, and the number rises to around $75.5 million, as county records show.

Each loan is assigned to a different Point Ruston-related LLC owning three completed and three future developments straddling the Tacoma city line and extending northwest into the municipality of Ruston. The loans include a commercial space that JLL is now offering for sale, but not the future development pads.

Pierce County recorded the six trustee sale notices on May 2. Those documents include a local trustee for the scheduled Aug. 4 courthouse sales. Those sales can be averted until July 24, county records show, with new financing.

Pierce County says the six previously recorded loans were made during 2019 and 2021. The loans have past-due dates beginning in September of last year and extending to February of this year. County records state that all six notices were delivered and received by certified mail.

The six pending trustee sales — which can certainly be averted when and if new money is found — don't cover any separately owned prior developments at Point Ruston, including individual condos, apartment buildings, the GenCare senior community, the Silver Cloud Inn, etc. Those are mostly to the south, in Tacoma, at various addresses; none of that is at risk.

The August auction date gives the master developer two-plus months to find new financing. And if by that date JLL sells the development pads and existing retail/commercial space, that could well cover the amount in arrears.

But, significantly, the TerraCotta loans cover the planned future Buildings 14, 15 and 16, on the northwest end of the development, next to the marina. At least some ground work has been done there.

For those buildings, aka Phase IV, as for the entire prior development, Point Ruston generally acts as its own architect and contractor, using different names and LLCs for those corporate arms.

Buildings 14, 15 and 16 are to have 640 units, with an equal number of parking stalls. No retail is planned.

To the south, wrapping around structured parking garages, Buildings 9 and 11 were supposed to start last year, per JLL's timeline, and wrap at the end of this year. Google satellite view doesn't support that schedule. Those are to total 253 units. As part of the Building 11/garage complex, the Public Market building opened three years ago; that's home to a variety of food purveyors.

Based near Los Angeles, TerraCotta joined the Point Ruston financing effort in 2019. The project has had other lenders over the years. The loans were assigned to the local new trustee in March. The six foreclosure sale notices first ran in the DJC on May 8.

In recent months, as is not uncommon with large and complicated construction projects, there have been some liens filed by various parties against the developer, all recorded by Pierce County. Some if not all of those may have since been satisfied.

At full build-out, Point Ruston is expected to have around 1,800 units, including a neighboring single-family housing component, and over 300,000 square feet of commercial space, including some offices. JLL's Mark Thygesen and Eric Kathrein are selling the completed retail and future development pads.