By Debbie Cockrell Updated December 12, 2023 11:44 AM
Properties at the residential and retail giant along Commencement Bay are deep in debt, with claims from investors, the EPA and others. The developers of Point Ruston transformed an environmental wasteland into a glittering development on Commencement Bay, but their project could now best be described as a financial quagmire as loans used to build it have come due.
Father-and-son team Michael and Loren McBride Cohen worked to oversee the development of the residential and retail colossus, built atop a Superfund site that caps contaminated toxins left from a longtime smelter. Michael Cohen died in late 2020; Loren Cohen has continued oversight. Today, the Cohens’ business practices are under assault on multiple fronts. Court and county records show that Point Ruston is mired in unpaid debts and back taxes, with investors battling in court over repayment. Two of its lenders, TerraCotta Credit REIT and AURC III, are seeking repayment totaling nearly $170 million — a figure likely to grow as interest, penalties and court costs add up. Seven parcels entered receivership earlier this year, foreclosure on various parcels is in the works and there are lots still undeveloped. The City of Tacoma is owed money, as is Pierce County and the U.S. Environmental Protection Agency. Point Ruston’s borders span the cities of Ruston and Tacoma, with the bulk of development on the Tacoma side.
Ruston’s mayor contends Point Ruston has left his small city in the lurch, failing to deliver on the promise of development there. Loren Cohen and his attorney, Jack Krona, did not respond to multiple requests for comment or respond to questions emailed to both. Krona has defended the LLCs tied to the Point Ruston parcels in cases active in Pierce County Superior Court. In the TerraCotta case, he’s pointed to Federal Reserve rate hikes having “soured the commercial lending market, making refinancing the loans difficult,” among other defenses. In the AURC III case, he’s argued against the debt-collection efforts involving its loans and various parcels, some also involved in TerraCotta’s receivership case. In a response filed in July in the AURC case, Krona wrote, “any written loan documents speak for themselves and the allegations … form an inaccurate or incomplete summary.”
Meanwhile, the federal agency regulating the Superfund site beneath Point Ruston’s condos and businesses, as well as the development’s debt collectors, have had plenty to say in interviews and court filings. The EPA “renegotiated their payment when times were tough,” said Bill Dunbar, public affairs specialist for the regional EPA office, which is owed millions of dollars in past-due costs, according to the agency. “Of course, from their perspective, all times are tough,” he added. There is always risk in development, and defaults are not unusual. The owners of Kansas City, Missouri’s historic and iconic Country Club Plaza, for example, recently defaulted on nearly $300 million in debt. What stands out in Point Ruston’s story is the broad spectrum of those who’ve had to go to court to chase payments in its development and after, from subcontractors to investment partners to the U.S. government via the EPA.
“It is dissolving into a big mess. And it didn’t need to be this way,” attorney Russell Knight told The News Tribune in October. He represents AURC III’s EB-5 investor group that is suing Point Ruston for unpaid debt tied to an original $66 million loan. “For a long time, people looked the other way, because there was enough money there and they were optimistic about the future,” Knight told The News Tribune. “But now everyone is enforcing their legal rights.” Ruston officials also are upset with how the development that bears the city’s name has turned out.
“The fact that all the contaminants wound up in the City of Ruston with very little development continues to financially burden our city,” Ruston Mayor Bruce Hopkins wrote in his monthly newsletter to residents in July 2023. Meanwhile, Loren Cohen is involved in a new $1.8 billion development in Arizona, also ballyhooed by local politicians and bankrolled by loans. 00:00 01:39 Point Ruston at a crossroads Point Ruston at a crossroads Loans worth tens of millions of dollars drawn from two different entities to build Point Ruston have come due. Several parcels tied to six loans are now in receivership. Other locations at foreclosure risk in separate litigation include the Point Ruston parking garage, public market, and lots surrounding the garage planned for residential development. Loans worth tens of millions of dollars drawn from two different entities to build Point Ruston have come due. Several parcels tied to six loans are now in receivership. Other locations at foreclosure risk in separate litigation include the Point Ruston parking garage, public market, and lots surrounding the garage planned for residential development. By Tony Overman Before Point Ruston “I’m convinced that if Mike Cohen and the Cohen family didn’t fall in love with that piece of property, it might still be sitting there with a chain-link fence around it,” then-council member Conor McCarthy said in a public eulogy for Michael Cohen during the Dec. 8, 2020, City Council meeting. Back in 2006, Cohen’s Point Ruston LLC offered Tacoma an ambitious turnaround to transform a Superfund site languishing after the ASARCO smelter era and its subsequent bankruptcy. The purchase of the former smelter property involved terms reached by ASARCO, federal bankruptcy court and the EPA. Original terms included millions of dollars to the EPA and ASARCO along with millions more planned to be spent for cleanup and infrastructure, along with continuing oversight payments to the EPA. Cohen was familiar to local officials through his successful Tacoma condominium projects, including Hawthorne Hill (320 E. 32nd St.) and Allenmore East (2440 S. Steele St.), after branching out into multi-family housing development in 2001. Another proposed condo development project on the east side of the Foss Waterway north of the Murray Morgan Bridge dissolved after business community backlash due to its vicinity to industrial port sites. A pile of rebar from the former ASARCO smelting plants was excavated during construction on the Point Ruston parking garage. Photo taken in Tacoma on Wednesday, April 22, 2015. A pile of rebar from the former ASARCO smelting plants was excavated during construction on the Point Ruston parking garage. Photo taken in Tacoma on Wednesday, April 22, 2015. Drew Perine Staff photographer Point Ruston LLC’s vision was to create a bustling new upscale mini-city reaching into both Tacoma and Ruston. It would feature apartments, condominiums, a movie theater, shops, retail, public market, even a hotel. Cohen shared his plans with Tacoma City Council’s Economic Development Committee in May 2006 and made a presentation to the Ruston Town Council. Leaders from both municipalities seemed pleased. “I think it keeps with the intent and everything we talked about with the original ASARCO plan,” Ruston Mayor Michael Transue said at the time. “It certainly appears as if they are prepared and ready to take this on,” said Tacoma City Councilman Rick Talbert, then-chairman of the council’s Economic Development Committee. The News Tribune reported, “Cohen is reluctant to put a price tag on the project, but he believes the eventual development and sale of homes and commercial properties will pay for the remediation — and make his company a profit.” EPA and Point Ruston LLC reached a consent-decree agreement in 2006, the first of several spanning the project overseeing the remediation. The site would need to be developed in phases, juggling both financing and remediation. By 2008, the Great Recession had arrived. Cohen told The News Tribune that by the time his first condos would be ready to sell, the market would likely be on the upswing. “I’ve lived through a half-a-dozen housing market downturns,” Cohen said. “I suspect we’ll survive this one, too.” In 2017, Michael and his son, Loren Cohen, received the Golden Shovel Award from the Economic Development Board for Tacoma-Pierce County for their Point Ruston work. The award is given to those who’ve “made significant contributions to the economic well-being of Tacoma and Pierce County,” the EDB wrote describing the award in 2017. The EDB, in honoring the pair, said they were “true visionaries who turned a former smelter site into the $1.2 billion Point Ruston Urban Village. The world-class, mixed-use development is a gem in the region’s economic development crown, and the gold standard on any tour of great places to live, work and play.” Fast forward to 2023, and the decision on how to pay off that gem’s creation is still being litigated. Investors and lawsuits Michael Cohen over the years entered into partnerships with investors to help bring his projects into reality. An original Point Ruston partner/investor was the Thomsen family, known for their timber company operations in Thurston County. Two investment lender groups later invested in the project: AURC III and TerraCotta Credit REIT. Each would later head to court. In March 2020, the Thomsens sued, stating in their case that they were owed “in excess of $24.5 million.” Michael Cohen died before the case went to trial, and a settlement was later reached. AURC III represents a group of foreign investors through the American United EB-5 Regional Center of Portland, Oregon. The EB-5 program offers foreigners the opportunity to invest in approved projects as a pathway to U.S. citizenship. For Point Ruston, 132 investors loaned a total of $66 million through AURC III for the project’s Phase 2, to include more than 200 residential multi-family units, theater, retail, hotel and parking garage. AURC and Point Ruston entered arbitration after interest payments on the loan stopped in 2020, court records show. An $11.49 million arbitration award came in October 2021 in favor of AURC against several Point Ruston LLCs. AURC returned to court in November 2022 contending that while the arbitration award was paid, “interest continued to accrue on the promissory note, and defendants failed to pay interest due,” the complaint filed in Pierce County Superior Court stated. A more-than $87 million partial summary judgment against Point Ruston Phase II LLC was awarded to AURC III in August 2023, with a trial and final judgment to come next year. Knight, the attorney representing AURC III in the case, told The News Tribune in an interview this fall, “The loan is now due. And Point Ruston has failed to repay the loan.” On Oct. 6, a court order gave AURC a wider net to cast for repayment, naming Point Ruston LLC as “jointly and severally with Point Ruston Phase II, LLC to the full amount of liability,” to ultimately be determined, including the August judgment. “This is significant because Point Ruston LLC is the parent company of the entire project,” Knight told The News Tribune, creating an opportunity “to obtain a lot of different property,” as AURC pursues repayment. AURC III’s case contends, among other issues, that certain Point Ruston assets tied to its financing were later transferred without its consent to new entities used to secure debt, including some properties also involving TerraCotta Credit REIT. Krona last year told The News Tribune that claims related to the transfers were “100% resolved in a previous arbitration.” Parcels tied to AURC III’S case include Point Ruston’s parking garage, public market, and two lots surrounding the garage, according to Knight, with some overlap property also involving TerraCotta. The parking garage comes with an additional legal entanglement. Serpanok Construction, a concrete and steel construction subcontractor, filed a mechanics lien for nonpayment of construction work on the garage. Serpanok eventually was able to foreclose on the building against Point Ruston Phase II LLC, Point Ruston LLC and Century Condominiums, purchasing it at a sheriff’s sale in June 2020. Serpanok has filed a counterclaim in AURC III’s case regarding ownership as AURC prepares its own foreclosure. Disputes over the garage are further complicated by covenants, codes and restrictions that regulate the property as a designated common area tied to the Point Ruston Owners Association, led by Loren Cohen as board president. A copy of the CC&R’s posted online defines PROA as “an association comprised of all owners of real property in Point Ruston, established to own, operate, and/or maintain various common areas and community improvements and upholding the long term maintenance and management commitments required of the environmental remedy for the site … .” On Nov. 17, an amended complaint granted by the court added PROA to the AURC III case. The amended complaint, which was opposed by the Point Ruston defendants, argues that the CC&R’s declaration designating the garage as a Point Ruston common area and keeping it in Point Ruston’s control via the PROA devalued AURC’s Deed of Trust. Knight told The News Tribune AURC was never told and thus never gave permission to the designation change, made in 2018. He explained that the cost structure is set up so that revenue generated by the garage from Point Ruston-validated tickets, negotiated at below-market rates, is perpetually lower than the garage’s expenses, which include taxes, local LID assessment and security. “It totally disincentivizes anyone from owning the garage,” he added. Krona had argued against allowing the amended complaint. He contended in a response filing that the validity of the CC&Rs had already been heavily litigated in a previous case involving PROA and Serpanok, and, given that, the rules would remain binding in this case. AURC III’s case is set to go to trial next year over two phases, with the battle over the garage included in the second phase. Another lender case involves TerraCotta Credit REIT, based in El Segundo, California. TerraCotta earlier this year filed a petition for appointment of general receiver regarding loan repayments on seven Point Ruston properties — three vacant and four developed. The receiver, Resource Transition Consultants of Lynnwood, was appointed in May by the court to take over the properties’ management, including rents and payments, and to file regular reports to the court. TerraCotta specializes in commercial real estate, finance and investing. It began entering into various Point Ruston loan agreements in 2019. TerraCotta says the loans are in default with the LLCs now owing more than $82 million in unpaid principal balance, interest and fees and attorneys’ fees. A map that was part of a filing in the TerraCotta Credit REIT Point Ruston legal proceedings shows the locations under receivership in the case. A map that was part of a filing in the TerraCotta Credit REIT Point Ruston legal proceedings shows the locations under receivership in the case. CBRE TerraCotta’s properties include multi-tenant retail sites at 5020 Main St.; 5104, 5108 Grand Loop; 5101-5109 Main St.; and Building 8 and Century Theatre building at 5057-5058 Main St.; as well as three vacant building sites on Yacht Club Road. In May, Krona, representing various Point Ruston LLCs, argued that a receivership in the case was unnecessary since “TerraCotta has an adequate remedy through foreclosure.” He further argued that higher interest rates had “soured the commercial lending market, making refinancing the loans difficult.” At that time, Krona argued Point Ruston was anticipating a completed sale before early August, “sufficient to make TerraCotta whole and allow the borrower to turn a profit.” The receivership order allows for Reource Transition Consultants to be paid 2 percent of the net proceeds of any authorized sale. TerraCotta’s motion to remove RTC was denied in August, but the court said TerraCotta could file a new motion regarding “RTC’s compensation formula,” (TerraCotta did so Nov. 20) and directed RTC to retain a new property manager. In August, the receiver, RTC, argued, “It is clear is that TerraCotta wants the properties and would rather have a custodial receiver assist with foreclosure rather than a general receiver that liquidates the properties for the benefit of all creditors, but that is not what TerraCotta and its former counsel bargained for.” “TerraCotta’s filings show that it wants to own these properties and is well aware that the odds are that the secured creditor would be the winning bidder in a foreclosure of multimillion-dollar commercial property. However, TerraCotta is not entitled to the properties, only to payment of its debt after a receiver’s sale,” RTC’s filing stated. On Nov. 8, attorneys for TerraCotta filed a motion to proceed with foreclosure “so that it may then address the Tacoma and EPA senior secured claims and promptly proceed with development of the undeveloped properties.” The attorneys, in their Nov. 8 filing, said more than $3 million was owed to the city of Tacoma in Local Improvement District assessments across the seven properties in receivership, and “several million” owed to the EPA. TerraCotta’s filing noted the seven properties in its case have “at most” an appraised value of $38 million, well short of the more-than $82 million it contends it is owed. “The correct economic, and only equitable, result in this case is … to allow TerraCotta to foreclose on the properties, manage them, and complete development,” it stated. “Unfortunately, the market for obtaining construction financing is rapidly deteriorating,” it added. The vacant parcels also are subject to a further environmental review by the City of Tacoma before any development. “While the additional mitigation measures with the City of Tacoma are yet to be determined, they are expected to exceed millions of dollars and will require years before the parcels are developable,” a supplemental declaration in the case stated. RTC’s response filed Nov. 20 stated, “RTC has been in contact with multiple brokers concerning the listing and sale of real property in these matters. It is the consensus of the brokers that the properties would be best marketed both individually and collectively because the different asset types (i.e. retail, movie theater, and undeveloped land) may not be universally attractive to all prospective buyers.“ RTC also pushed back on TerraCotta’s framing of its activities in its filing: “RTC’s desire to abide by the terms of the appointment order and obtain the agreed upon compensation is not self-dealing. TerraCotta’s principals are clearly upset that RTC is acting independently and not merely doing TerraCotta’s bidding to the detriment of other creditors and parties in interest.” On Dec. 5, Krona representing various Point Ruston-investment related LLCs, contended that TerraCotta had “effectively scuttled” a sale of the retail property “that would have made TerraCotta whole on the retail loans,” and that TerraCotta had “presented no legitimate basis” to modify earlier receivership orders in the case and move to a foreclosure sale. TerraCotta pushed back in a Dec. 6 filing, noting, “The unsupported claim that TerraCotta ‘scuttled’ the withdrawn contingent offer lacks any evidence. Neither the borrower nor the receiver has ever come forward with a credible buyer having the capability to close.“ The parties returned to court Dec. 8. The receiver was granted approval to sell the properties tied to PR Main Street Retail LLC, which overlapped with AURC III’s claim, with proceeds to be paid first to TerraCotta, then AURC III if any sufficient funds remain. TerraCotta, meanwhile, was approved to move forward on foreclosure of its other properties. A petition for dissolution and appointment of general receiver was filed earlier in the week by Krona involving Century Condominiums LLC, Point Ruston Phase II LLC, PR Building 11/9 LLC, PR Retail LLC, The Shops at Point Ruston I LLC, and Point Ruston General Construction LLC. The petition and financial details, including creditors, involving each LLC totaled more than 140 pages. ‘The EPA is not going anywhere’ EPA officials spoke with The News Tribune earlier this fall to answer questions about Point Ruston’s environmental cleanup. “The cleanup plan for the entire property was to cap it,” said Kristine Koch, EPA’s remedial project manager overseeing Point Ruston. “And so buildings become a cap, roads become a cap. Green space has the multilayer cap.” That cap serves also as the remedy for the pollutants at the site, with the site’s toxic dirt sealed underneath, making it unique among Superfund sites that usually follow a pattern of toxin removal, containment and isolation. Dunbar, with the EPA, described it as making “lemonade out of lemons, otherwise there was going to be a big, ugly hole.” Point Ruston’s cleanup is enforced by a consent decree, a court order based upon an agreement negotiated between Point Ruston LLC and the U.S. government outlining plans and project timelines. “It wasn’t dictated or mandated by EPA,” Koch told The News Tribune. “It was a negotiated schedule with Point Ruston. Unfortunately, in the 2000s, the market went south and Point Ruston wasn’t able to meet those obligations.” Point Ruston has had multiple amended consent decrees. The capping, according to Koch, was completed in December 2022, after the last consent decree called for it to be finished that year. The EPA still monitors any site development at Point Ruston. “If anybody wants to develop a parcel and remove a cap, then we would have to be involved to ensure that they’re doing the removal and the redevelopment appropriately, so as not to cause a release of contamination,” Koch explained. EPA’s oversight isn’t free. “Under the consent decree that we have with Point Ruston LLC, they agreed to pay EPA’s oversight costs. And we send an annual bill,” said Kelly Cole, an EPA attorney. Payment is overdue, according to Cole. Other issues, outlined by Cole, include being in violation of the remediation schedule on a number of parcels. On Dec. 4, EPA’s Koch, in response to further questions, said the amount owed to the United States now totals more than $4 million for past costs at Point Ruston. The Department of Justice sent a letter regarding the properties in receivership to TerraCotta on Nov. 27, which the lender included in its Dec. 5 court filings. “The United States is incurring legal and enforcement costs due to Point Ruston LLC’s failures to comply with its obligations under the decree,” the letter states. “EPA estimates that if it is required to take over all such work for the next few decades, the costs of such work could easily exceed $25 million.” It added, “It is worth noting that the United States shares the concern that selling all the properties together poses some difficulties in that, eventually, it may be necessary to determine how much is being paid for each parcel, given the different claims and liens associated with the various entities and parcels.” The creditors’ lists submitted that same day by Krona in the LLCs’ receivership documents showed amount owed to EPA both as “unknown” and “amount disputed.” Lot 5 is the site of Building 5, 4924 Main St. Work on that site has also been an issue with the EPA. Point Ruston’s Building 5, seen in construction this year. Point Ruston’s Building 5, seen in construction this year. Pierce County Assessor-Treasurer Information Portal In her December update, Koch told The News Tribune that “Work on Lot 5 has ceased. (Point Ruston) removed the cap to develop the parcel. The development started without EPA approval in November 2022, and they stopped work in July 2023 due to the contractor not being paid.” She added, “EPA could not approve the development as they were in violation of the Consent Decree for delays in capping Phase II and IV – these violations are still outstanding. There is a temporary cap (plastic and plywood) over exposed contaminated soils and a fence around the perimeter, so it is safe for the public to be around the outside of the fence.” The building has been the subject of a subcontractor complaint filed in May against Point Ruston General Construction LLC in Pierce County Superior Court over a claim of nonpayment for site work following an initial settlement. Buckley-based WA Underground received a $220,000 judgment against the LLC in September. That judgment amount also was listed in the LLC’s creditor list submitted for its receiver on Dec. 4. “Since at least 2011, we’ve given them lots of breaks,” said Dunbar of the EPA. “The 2011, 2014-15-16 time frame, a number of times, we allowed them to forgo paying, and we, with the Department of Justice, agreed to allow them to continue with the remedy and continue with construction,” he said. “And the EPA is not going anywhere,” added Cole. Tax debt Maria Lee, City of Tacoma media representative, told The News Tribune in response to questions in October that the city has been “closely monitoring the local improvement district assessments for the Point Ruston area properties.” “For those seven properties with LID assessments that are in receivership, the City is working cooperatively with the receiver appointed … With the senior priority status of the LID assessments, the City is confident the assessments will be paid,” Lee said. She added, “For three properties not in receivership but with delinquent assessments — two of which are owned by Point Ruston LLC and one owned by a separate individual — the City may file a lawsuit against the property owners to foreclose on the assessment liens,” and ultimately forcing a property sale “in order to pay the outstanding LID assessments.” The total amount still owed at Point Ruston as of October was just under $13 million, she noted, on the original LID bonds of around $30 million. Across the seven properties in receivership, TerraCotta’s attorneys on Nov. 8 listed more than $300,000 owed in unpaid Pierce County property taxes as well as other debts. County records show property tax delinquencies on the seven parcels as of early December: ▪ 5057 Main St. $19,895.39, PR Main Street Retail LLC. ▪ 5058 TO 5064 Main St. $31,912.50 PR Main Street Retail LLC. ▪ 5451 Yacht Club Road, $85,407.57 Point Ruston Phase IV-15 LLC. ▪ 5320 Yacht Club Road, $12,941.87, Point Ruston LLC & Point Ruston Phase IV LLC. ▪ 5103 TO 5109 Main St. $87,060.84, PR Main Street Retail LLC. ▪ 5020 Main St. $78,689.31, Point Ruston Building 7 LLC. ▪ 5201 Yacht Club Road, $13,014.93, Point Ruston Phase IV-16 LLC. Pierce County Assessor-Treasurer Mike Lonergan told The News Tribune in response to questions that “the EPA has been in contact with us several times to check the status of delinquent taxes on Point Ruston properties, since the payment of property taxes is apparently a requirement under the EPA’s agreement with owners of formerly contaminated sites.” He added that in Point Ruston’s past tax cycles, “To date, all taxes and interest assessed have been paid within the three-year limit before tax foreclosure.” The view from Ruston The city of Ruston and Point Ruston have been at odds through the years over permitting and general operational practices with claims made on both sides. In February 2022, the City of Ruston sought help from the EPA in a letter citing the “drastic departure” Point Ruston had made from its original plans. Among other issues, Ruston Mayor Bruce Hopkins cited the contaminated soils originally planned to be a part of the project or moved to a disposal facility instead becoming dunes at Dune Peninsula Park and the remainder put in Ruston. In July 2022, EPA’s Koch met with Ruston residents for a public forum. The sentiment from city leaders and its residents was clear. Attendees described Ruston being “disproportionately impacted” with contaminated soil and an on-site containment facility, while the Tacoma side enjoyed the bulk of the development. Koch told the audience the OCF site was selected in the 1990s because it was found to be a more structurally sound area than an originally planned site on the Tacoma side. Hopkins, who did not respond to requests for comment for this story, has shared occasional Point Ruston updates in the city’s monthly newsletters to residents. From July 2023: “Most of the properties being foreclosed are within the City of Ruston. What this means is an extended timeline for the parcels we had hoped to see developed within our City. We have had lengthy discussions with EPA regarding how this whole remedial action plan has unfolded and the conditions we are facing.” EPA’s Koch, when interviewed in October, was optimistic that the project would somehow reach completion. “I’ve seen things like this happen at other sites … but it will come around, and it will progress and be finished in the future,” she said. “So while it seems like we’re in a dark spot, now, I have full confidence that this will be seen through to the end.” Arizona and the future Despite unresolved troubles aplenty in Tacoma and Ruston, Loren Cohen is involved in a new development in Tempe, Arizona. Rendering shows the planned $1.8 billion South Pier at Tempe Town Lake project. Rendering shows the planned $1.8 billion South Pier at Tempe Town Lake project. City of Tempe, Arizona/South Pier Tempe Holdings Funding for the first phase of South Pier at Tempe Town Lake was announced in June, with $385 million in debt and equity secured for The McBride Cohen Co., according to JLL Capital Markets in a June announcement. JLL described it as a “737,585-square-foot, waterfront, trophy mixed-use project that will include 724 multi-housing units and 26,767 square feet of retail space.” It noted, “Upon completion, Phase I of the McBride Cohen Company-led project will be the largest apartment development in the state of Arizona, and will feature the towering Arizona Amazing Wheel, a pedestrian bridge, public dock, and world class entertainment isle.” Phase 1 completion is anticipated during the second half of 2026, the release stated, featuring three “Class-A” towers atop a parking structure, public park, fitness centers, spas, pools, and more. “We believe in the power of this project, this incredible piece of waterfront and the community we are going to create here at South Pier,” said Loren Cohen in the June news release. “We are truly grateful to our partners at JLL for their belief in this dream.” Kris Baxter-Ging, public information officer for the city of Tempe, told The News Tribune on Dec. 7 that the city’s research into developers happens in its RFP (request for proposals) process, and referred to the city’s website about the project. The city’s website includes a link to the Development and Disposition Agreement between the city and South Pier Tempe Holdings LLC, “an entity of Washington state-based McBride-Cohen Management,” it states. The agreement was approved unanimously by Tempe City Council in February 2022. That approval came nine months before AURC filed its current case against several Point Ruston LLCs in November 2022, though AURC had gone through and was granted an arbitration award in its earlier interest repayment case. The Tempe City Council approval also came more than a year before TerraCotta launched its current Point Ruston receivership case in April 2023. The Tempe agreement addresses, among other items, performance schedule, failure of timely performance and “economic impracticability,” open to modifications and future amendments. At the February 2022 Tempe council meeting, the presentation noted the site qualified as a brownfield eligible for “federal cleanup funds to remove the blight.” The site’s need for remediation had made it a challenge to get any developer previously to take it on, according to the presentation. City officials cited three years of negotiations involving the city’s economic development director, the city’s attorney and Loren Cohen on the project leading up to the agreement. Given the site’s history, Tempe Mayor Corey Woods gave a strong endorsement of the plans at the February council meeting: “When I see a project like this, with the value of the actual public benefits — $2.5 million for public transportation, $10 million for affordable housing, $12 million for a pedestrian bridge, a quarter of a million dollars for the school districts and $2 million for landscaping… that is actual tangible public benefit, not rosy projections.” He added, “If they don’t build, if they don’t perform, they get nothing in tax abatement from the city.”
News Tribune archives contributed to this report. This story was originally published December 11, 2023, 5:50 AM.
Debbie Cockrell 253-597-8364 Debbie Cockrell has been with The News Tribune since 2009. She reports on business and development, local and regional issues.