A long-troubled downtown construction site will sit quiet once again.
Canadian developer Bosa said Friday it is pausing work on the Civic Square project across the street from Seattle City Hall because of rising construction costs and uncertainties in the broader construction market. The developer said it made the decision “after completing additional due diligence and weighing current construction market conditions.”
“Volatility in the construction market, as well as commodity and construction price escalations and the great uncertainty they create, continue to be a concern,” the company said in a statement.
Bosa left open the possibility of resuming work on the site, but offered no details on when that might happen.
“We expect these factors will normalize however timing is unclear,” the statement said. “Although we are pausing the project, we strongly believe in Seattle’s market and growth and will continue to keep a close eye on market conditions. We look forward to the time when we can begin pursuing this project again.”
The pause is just the latest hangup for a central downtown site that has been mired in a long series of delays and strange political scandal.
Soon after the city tore down its old Public Safety Building in 2005, the Great Recession stalled a plan for a high-rise and public plaza at the site.
A decade later, developer Triad planned to build on the lot, but that imploded amid allegations that a company executive tried to shake down a Seattle City Council candidate whose tenant-rights organization was involved in a lawsuit against the developer. The city struggled to cut ties with Triad and Triad attempted unsuccessfully to transfer the site to another developer.
Eventually the City Council agreed to a deal with a new developer, Bosa.
In 2017, Bosa agreed to pay $16 million for the land and at least $5.7 million in affordable-housing fees. The company agreed to include a public plaza at the site.
Bosa finally began work on the project this spring. Its plans include an upscale 57-story condo tower, six levels of underground parking, retail space and the public plaza.
The project is the latest high-profile construction site to go dormant as economic uncertainty mounts. Amazon recently paused work on several office towers in Bellevue. The company said it was rethinking the office designs because of remote work.
Nationwide, the construction industry is facing rising material costs, supply chain problems, challenges hiring workers and other hangups, according to the Mortenson Cost Index, which tracks the industry.
Costs increased 18% nationally and 22% in Seattle over the past year, according to the index.
“I think there is some frustration in terms of planning. If you can’t pin down a price at the start of a project, that makes it a little bit hard to plan for something you need a year down the road to finish that project,” said Elliott Krivenko, a Seattle analyst for the real estate data company CoStar.
And it’s not just construction costs.
The housing market is cooling, with fewer buyers making offers and prices starting to drop since the spring, raising questions about new condo towers.
Meanwhile, rents are on the rise, and most high-rise residential construction downtown and in South Lake Union is apartment towers.
If those trends continue, condo developers could flip their projects to rentals, Krivenko said.
Under its agreement with the city, Bosa has four years from the start of construction to finish the plaza and six years to finish the tower. If the company fails to deliver the project by those deadlines, it could owe the city fees ranging from $500 to $5,000 per day. But the soonest the city could seek those damages would be April 2026, said Melissa Mixon, spokesperson for the city’s Department of Finance and Administrative Services.
The deal includes several exemptions, including if the developer claims that adverse market conditions prevent it from getting a loan for at least 70% of the cost of the project. Bosa told the city it is not claiming that exemption, Mixon said
“Even with the pause, Bosa intends to meet the performance dates outlined in the City agreement,” the company said in a statement.
Construction has closed sidewalks near the project. Those will reopen once the developer installs a safety fence. That installation is likely to start late next week, said Seattle Department of Transportation spokesperson Ethan Bergerson.