After over a year of delays, $140M Bremerton project nears completion
By Marc Stiles
Puget Sound Business Journal
Posted: June 13, 2022
If something could go wrong at the Marina Square project on Bremerton’s waterfront, it did.
Covid-19 initially halted construction of the $140 million, two-building project by Sound West Group, which planned the project with apartments and a hotel.
“Good luck getting financing for a hotel during the pandemic,” said Wes Larson, president of Bremerton-based SWG.
And if that wasn’t frustrating enough, the discovery of a buried privy resulted in archaeology investigation, further delaying work.
Construction began in April 2019 but was suspended March 24, 2020, by Gov. Jay Inslee‘s “stay-home” order. Work restarted on a limited basis 10 months later, but full-scale production didn’t resume until May 2021.
All told, there were 305 days of no work plus 112 days of what SWG called “non-critical pathwork.” SWG pegged the average cost of the delays at between $7,300 to $10,000 a day.
“We had a little bit of everything on this project,” said Larson, who added it “was definitely a character-building experience.”
Now scheduled to open in late summer, the project at 280 Washington Ave. will have 125 market-rate apartments in one tower, and a second tower with 127 studio units offered at market, reduced and extended-stay rates, plus 18 live-work units.
The second tower initially was going to be a Cambria-branded hotel, and Larson said it took about six months to figure out and execute the pivot to housing.
Larson isn’t worried about leasing the apartments, but expects filling the 7,600 square feet of commercial space will be challenging.
“This is probably the strongest multifamily market in the state,” he said.
Bremerton’s vacancy rate is less than 1%, according to Commercial Analytics, and the 114,000-employee Puget Sound Naval Shipyard is in the midst of a multibillion-dollar modernization. Apartment rents are rising by double-digit rates.
He expects the extended-stay and other studios will be filled by contractors at the shipyard. The base daily rate will start at $96 a night with a minimum 30-day lease.
Rents for workforce, or reduced rate, apartments will start at $1,400, with market-rate rents beginning at $1,800 a month.
So far nearly 1,600 square feet of space has been leased to Harris Retail Group, which is planning a convenience store. The company owns and manages the nearby Harborside Market and other businesses.
The space is divisible, and Larson thinks tenants could be existing restaurateurs from the region. A brewpub is possible, he added.
Larson said Marina Square, the latest addition to the redeveloped Bremerton waterfront, has been “super impactful” on downtown, where there’s a marina, conference center, two hotels, and the state and Kitsap fast ferry dock.
Larson said stopping the project altogether would have risked all progress, including permitting work. “We just bore down and gritted our teeth,” he said. “Obviously we had to step up and write some checks.”
Investors who had contributed $35 million in equity contributed another $5 million, he said.
Encore Architects designed Market Square, and Compass Construction is the general contractor of project, which includes parking and an event space for festivals and concerts.