Delayed Federal Way project is a sign of the troubled times

In Federal Way, Symphony is considered transformational.

That's the name of a proposed quarter-billion-dollar high-rise development that city planners hope will reverberate across the suburban plain, converting Federal Way's business district into an urban-styled downtown.

Consisting of four towers, the tallest at 24 stories, Symphony would bring 900 homes and 60,000 square feet of retail and office space to the southeast corner of 20th Avenue South and South 316th Street.

But a soft housing market and the credit crunch conspired to delay the project — a deadly combination, and typical of the economic forces that are slowing key developments in several suburbs throughout the region.

Last July, the Federal Way City Council granted Symphony's developer a one-year extension of the September 2008 deadline for closing the sale of the 4-acre tract. The movie theaters that used to be there already have been demolished in preparation for the development, leaving a languishing lot.

Patrick Doherty, Federal Way's economic-development director, said Symphony is being counted on as a catalyst for more investment.

"The project definitely will create a Federal Way city center and change perceptions of Federal Way regionwide," he said. "And that's important."

Developer Victor Setton, principal of United Properties of Vancouver, B.C., said the delay is due to the economy and a cautious lender. Yet he and the lender have assured Federal Way officials that they remain committed.

"Personally, I don't think the Seattle-area housing market is overbuilt," Setton said. "To the contrary, there is a lack of affordable housing. At the same time, the market is not conducive to building condominiums because properties already built are sitting. But the rental market is strong."

The plan all along has been for 700 of Symphony's 900 homes to be condos and 200 to be apartments. The developer originally planned the homes in the first Symphony tower to be sold as condos, but now Setton is leaning heavily toward leasing them as apartments.

The plan is to construct the homes to high-quality specifications so the apartments could be converted later into condominiums.

"Timing is important right now," Setton said. "Our overall plan hasn't changed, but it doesn't take a rocket scientist to look at the market and make decisions based on where the market is going. We have the flexibility to change the ratio of rental vs. condo depending on what the market dictates."

Stuart Eskenazi: 206-464-2293 or seskenazi@seattletimes.com