Construction was put on hold in August 2015, when the assets of project developer Lobsang Dargey were frozen by a court order after a civil fraud suit by the U.S. Securities and Exchange Commission (SEC).

[4][6] The Sound Hotel operates within the tower, occupying floors 2 through 10, and includes a lounge, meeting spaces, a fitness center, and a bistro.

[4] The 1⁄3-acre (0.13 ha) site, facing 4th Avenue between Blanchard and Lenora streets and located adjacent to the Seattle Cinerama theater in Belltown, was bought by HAL Real Estate Investments in 2008 for $5 million.

[6][7][10] In 2013, developer Lobsang Dargey bought the property from HAL for $11.5 million, and announced his intention to build a mixed-use tower on the site.

Dargey, a former Tibetan Buddhist monk who immigrated to Seattle in 1997,[11] planned to finance the project with EB-5 visas through his company, Path America.

[8][15] Dargey was joined by Mayor Ed Murray and actor Tom Skerritt, a personal friend of his, at a groundbreaking ceremony for the project on August 28, 2014.

[24] In October, U.S. District Court Judge James Robart ordered that Path America and its assets be removed from Dargey's control and placed into receivership, including the Potala Tower project.

[25] A recovery plan was filed in January by the court receiver, proposing to sell all of Path America's projects,[26] which Dargey and several investors opposed on the grounds of possible loss of EB-5 eligibility.