Tacoma picks McMenamins to renovate Old City Hall

Portland-based McMenamins has proposed to renovate another iconic Tacoma building, and the City of Tacoma said “yes.”

Negotiations for the prenup will begin in the next several weeks for McMenamins to transform Old City Hall, a historic landmark the city bought earlier this year to prevent it from further deteriorating after years of neglect. The city made the announcement in a news release sent at the end of the business day Monday.

Old City Hall, at 625 Commerce St., is across the street from the McMenamins Elks Lodge, where renovation work began just two weeks ago. The company plans to open the Elks in the summer of 2017. According to the city’s press release, the company would begin work on Old City Hall immediately after that, completing it by the fall of 2019.

If the company and the city strike a deal, two treasures of historic Tacoma and national historic landmarks will be brought to life by McMenamins, which operates entertainment venues at 18 other historic locations in Washington and Oregon.

Under the deal as described in the news release, Old City Hall would become a 60-room boutique hotel; four small, signature bars showcasing the jailhouse, clock tower and rooftop greenhouse; a rooftop restaurant; soaking pools; community/private meeting and event spaces; and a gift shop.

The hotel rooms would compliment the 40-some-odd planned for the Elks Lodge across the street.

Old City Hall shouldn’t have to wait for renovation as long as the Elks Lodge did.

McMenamins bought the Elks building in 2009, but work on a property owned by the City of Bothell jumped ahead of Elks because Bothell put performance deadlines on the company. The Elks sale was on the private market, so the city had no influence over the timing of the work there.

Because the city owns Old City Hall, it plans to set performance deadlines, said Elly Walkowiak, of the city’s economic development department. That’s one guarantee that Old City Hall won’t wait for renovation any longer than necessary.

Although negotiations are still to come, the initial agreement calls for the company to enter into a lease with the city that could begin in 2016 and continue through the renovation and opening. That would be unusual for the brewpub operator, which has been in business for three decades and typically purchases its real estate outright.

After gaining rights to work on the building via lease, the company would “consider a purchase of Old City Hall within three years of the initial lease,” City Manager T.C. Broadnax said in the release. “Their financing plan included developer equity and it enables the City to recoup its investment.”

In June, the City purchased Old City Hall for $4 million. In September, the City issued a request for developers to propose a plan. Besides McMenamins, three others responded: Grace Pleasants, who renovated Albers Mill and brokered the deal for McMenamins to buy the Elks; Daniels Real Estate of Seattle, which renovated the building that is now the Starbucks Center; and former State Sen. Larry Faulk, who proposed attracting a Ralph Lauren Polo Bar among other things.

Look for more details on this story in Wednesday’s News Tribune.

This story was originally published December 1, 2015 at 8:56 AM with the headline "Tacoma picks McMenamins to renovate Old City Hall."