The movement to revitalize of Federal Way's city center has a new mascot.

Standing over 500 feet tall, and boasting 400 condominiums, 120 hotel rooms and 36,000 square feet of commercial and retail space, the SKY Hotel and Residences building promises to kick-start the city's economic growth and serve as a beacon for a new era of urbanization in Federal Way.

The new structure carries a price tag of roughly $225 million and developers should break ground in early 2011 with a completion date of 2014.

The project converts the 1.89-acre site of the old Azteca restaurant on 23rd Avenue South into the largest standing structure for miles.

Federal Way: The perfect site

For the past eight years, Federal Way has worked to attract high-density development to its downtown core in an effort to transform the 320th corridor from existing one-to-two-story retail to mixed-use residential and commercial structures.

The long term goal proposes to reshape the city from a bedroom community of 88,000 residents to a major economic epicenter of the South Sound.

Patrick Doherty, the city's Economic Development Director, views this project as a 500-foot leap in the right direction.

"As a city, we've worked hard to make Federal Way a great place to live and work," Doherty said, "and Twin Development's project will only validate this claim."

"We're excited to see it come to fruition," Doherty said.

Developer Steve Smith of Twin Development, LLC and Blaine Weber, principal of the architectural firm Weber Thompson, agree that Federal Way offers the perfect combination of prime location and a business-friendly environment for the SKY project.

"As far as I know," Smith said "(Federal Way) is the only jurisdiction in Washington that has been that aggressive in planning for high-density development."

"Its location is great," Smith said, "(including) its proximity to Seattle, Tacoma and the airport, the transit center and the freeway."

The building's size, while daunting to many Federal Way residents, helps fulfill the city's ambitions of high-density residences and meets the developers' predictions of demand for the new condominiums.

"We really wanted to build a world-class destination - almost a resort," Smith said. "We needed enough critical mass to be able to support all of the services we wanted to offer."

These services, Smith said, include a hotel, spa and conference center.

At just under 2 acres, architect Blaine Weber admits the site "offers its challenges," but he believes "the proximity to transit is one of its most intriguing assets."

"The views of Mt. Rainier will be striking," Weber said, "but also views of Puget Sound, Tacoma and Seattle."

"And the views will be unobstructed," Weber added, "that's the beauty of it."

Bank-free development in a down economy

What separates the SKY project from similar mixed-use development in the region is the way in which the developers plan to raise capital for construction.

In a sluggish economy when banks appear hesitant to lend money on projects of this magnitude, developers will look overseas for investors, with a particular emphasis on those from Korea and other Pacific Rim countries.

"There is no bank loan," Smith said.

Instead, the project will capitalize on the the federal government's EB-5 Immigrant Investor program to fund the majority of the development.

EB-5, or the "Investor Green Card" program, offers participants (including their spouses and children) nearly all the benefits of US citizenship in return for making a financial investment in a US-based commercial enterprise and creating at least 10 US jobs.

For an investment of $1,000,000, Pacific Rim investors earn a "Green Card" and own a stake in the project.

The 1,000 square-foot condos will likely sell for $500,000 to $600,000.

Smith said he predicts that most residents will come from Pacific Rim countries, but the 400 condominiums will also attract local residents "who want to live in a great resort-style place with all the views and services and amenities including a restaurant and spa."

"We don't have any pressure to sell by a certain timeframe, Smith said. "It's not like we have 400 units to sell quickly."

Smith said he predicts that the current over-supply of housing in Federal Way and the South Sound will evaporate by the time the project nears completion, and a shortage of housing in the region will facilitate a quick sale of condos in the SKY building.

A symbol of community pride and economic vitality

Smith considers his experience working with the city of Federal Way "absolutely wonderful."

"I can't think of a more cooperative jurisdiction," Smith said. "Eight years ago (the city) decided they wanted a high-rise downtown, and we're coming in and helping them fulfill their vision."

"They thought of it first," Smith said.

Smith wants the residents of Federal Way to view the SKY building as a symbol of renewed pride in their community.

"It will be visible from miles around," Smith said, "and I think the economic benefits are going to be tremendous."

The developers will be paying for traffic improvements and mitigation in an already congested 320th-I-5 corridor as part of their agreement with the city.

Twin Development estimates that the SKY project will create 2,800 jobs in Federal Way.

"Bringing all of that money into the city can only help," Smith said.

Bank-free lending and high foreign demand, coupled with a strong existing Pacific Rim community and a city government ripe for this type of development, the SKY project contains all of the pieces to make this 45-story structure a monument to growth atop Federal Way's skyline.

"It's really only in Federal Way - in all of Washington state - where these factors come together," Smith said.