I think I finished this quest but I have to ask, is it possible to kill the tanner while he is running down to the lower level? My party just keeps whacking him when he is at "near death" but he never drops and then he escapes.

Welcome to Ironworks...

No, it is not possible to kill the tanner outright - he must survive for further sub-plot activity.

Though a high-level instant kill spell like finger of death or, potentially, prismatic spray, might, on occasion, do the trick - I've never tried it on him, but you can snuff some plot-important characters on ocassion with this sort of tactic.

thanks for the welcome and the clarification

<font color="gold">Spoilers
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You will see him again, though, in a wealthy Waukeen-following town called Trademeet. ;) </font>