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Real Estate Editor
December 8, 2022
It's the holiday season, and news is slow. A late flood of year-end deals will likely come between now and New Year's Eve, so let's pause to consider what gifts are worth giving or receiving. In no particular order are:
The former Public Safety Building pit. This one is easy. The city of Seattle should buy back that full-block debacle from Bosa Development. The latter paid about $16 million for the gaping void, plus another $5.7 million committed for affordable housing. Bosa would likely have to eat the loss on its development costs. Clearly, no affluent condo buyer wants to live in a 57-story luxury tower in that blighted part of town. Bosa's required public space, fronting on Third Avenue, would inevitably be filled with homeless folks, as we all know.
Seventeen years have been wasted, from Great Recession to COVID-19. It's long past time for the city itself, or Seattle Housing Authority, or nonprofit partners to do the right thing: affordable housing, not a shelter, no parking and affordability levels from low-income up through solid workforce wages. Perhaps four midrise towers, one on each corner, and private greenspace within. Some architect can calculate the number of rentals on the back of an envelope; I'm guessing 1,200 to 1,400 units.
It would be a gift to Bosa to lose that burden, and a gift to the city to create much-needed housing.
Some ambitious developer would happily receive the Sinking Ship Garage, aka the former Seattle Hotel triangle in Pioneer Square. The Kubota-Fujii family acquired the hotel in 1941. It was razed in 1961, and the loss helped create the Pioneer Square Preservation District in 1970.
Decades later, it suffered the indignity of being condemned by the Seattle Monorail Board — remember that folly? — for a station that was never built. The family got it back, but has long been burdened by leases with various parking operators. (As of this writing, ABM Parking Services is out, and Diamond Parking is in.) The garage has rarely been filled since the pandemic began, unless on game nights in the stadium district. Street denizens often use it as a restroom, or as a private place to use drugs.
Any good architect would welcome the gift of a triangular site facing Smith Tower. And while the office market is depressed right now, and market-rate apartments might be iffy on Second Avenue, a replacement hotel might make sense.
The Lusty Lady building. Lee & Associates has the listing, and says its status is pending. That may only be wishful thinking, but we'll see. (The Tolias family has owned it for eons.) The air rights have been sold, so $3.2 million may be an ambitious asking price for a derelict, long-vacant and unreinforced masonry structure. A tear-down, in other words.
The value of this particular gift lies in the location: opposite Seattle Art Museum, mere steps to the revitalized (er, soon) waterfront, and on the tourist path from Pioneer Square to Pike Place Market. So the lucky recipient should make the most of the constraints: demolish it; shore the site way down to Post Avenue (a three-story drop); then put a two-story bar and restaurant (with rooftop dining) above stacked, automated parking. Tourists will keep those stalls filled. And make the eatery tourist-friendly, not high end. Even a Cheesecake Factory would do.
The so-called “mama and baby” condo tower site on Second Avenue. Plus Investment doesn't yet have a master use permit for that design, by Hewitt. And, again, luxury condos are not an easy sell downtown. Four years ago, Plus paid over $32 million for the land, and its exit price needs to be a little more than that.
An experienced, deep-pocketed buyer would need a background in high-rise rental projects. I think Holland Partner Group or Vulcan Real Estate could have 1516 Second on their wish lists.
The Bavarian Meats corner, overlooking Olympic Sculpture Park. The owner, a Florida investor, hired Olson Kundig for a hotel/residential plan. The first design review, set for this fall, was abruptly cancelled. Five years have passed since the $3.4 million sale, and a more experienced developer would gladly pay a premium over that. And here, condos make perfect sense.
The Green Tortoise Hostel building, aka the Hahn Building, aka 103 Pike St. It's been landmarked, which the architecture surely doesn't merit, but the red-brick exterior can be preserved with a new building to rise from within. Facade-ism, in other words. It produces mediocre architecture, but blame the landmarks board for that.
The old 14-story hotel plan from Ankrom Moisan, on behalf of local investors, made sense when first pitched in 2017. And, despite the prospect of ongoing litigation from condo owners at the Newmark, a hotel still makes sense in that location.
Sorry, Newmark owners. But if you want a protected view, find a lake or cemetery, and live next to that.
The Terminal Sales Annex building is rightfully landmarked, but in the wrong place. (That's 1931 Second, on the corner of Virginia Street.) If it were pushed to one side of the lot or the other, then Pacific Eagle's planned 42-story condo and Langham Hotel could work. But it doesn't, really. The little TSA protrudes awkwardly, like the proverbial sore thumb, from the soaring design by architects Kengo Kuma and Ankrom Moisan.
So, though I hate the term, let's perform a radical facade-ectomy. Cut it apart in sections and sell the TSA for a dollar to some civic-minded buyer. That would mainly be a gift to Pacific Eagle and its architects. And if pricey condos and a posh hotel are to work anywhere downtown, I'd pick that location over those to the south. Nearby Pike Place Market remains one of the few bright spots among downtown blocks.
Then the lucky TSA recipient could reconstruct the building — or its campus Gothic front facade, at least — on some small and otherwise unbuildable parking lot (the footprint is only about 4,860 square feet). Ballard, Belltown … the U District? Take your pick!
The corner site at 1300 Spring St., on First Hill, has high-rise zoning but no momentum. Savidge Investment was the last known broker. A 25-story residential plan stalled two years ago. This would be a gift to an experienced developer of medical offices or senior housing.
Modern Land and Create World, or some related entity, own the midblock property at 427 Ninth Ave. N., in the heart of South Lake Union. A 25-story apartment plan has been stalled for years. Again, this would be a gift to Holland or Vulcan or some such savvy developer.
The Shilla restaurant triangle on Denny Way. Also in unproven hands, also with a high-rise planned, also in need of a new and experienced owner/developer.
The Cinerama, which closed during the pandemic and the Paul Allen estate still hasn't officially put on the market. Astonishingly, it's not landmarked. That should be a gift, for the tax write-off, to a nonprofit like SIFF or Northwest Film Forum. It's a crime against cinema that Seattle's best movie palace didn't reopen for Top Gun: Maverick.
Investco has a master use permit for the 15-story apartment building planned for the corner at 701 Valley St., but no mojo. It's stalled, and a mystery.
The Calvary Christian Assembly property, near Roosevelt Station. A full city block. Over 2.8 acres with midrise zoning. And a congregation that, I'm sure, is shrinking like every other in town. Time to sell.
The Spady family owns its Uptown location, where its one-story Dick's Drive-In was developed in 1974. The corner offers half an acre, with zoning up to 85 feet. Sound Transit doesn't want it for a future station entrance, and the restaurant easily could survive in a new building with no parking — now 84% of the property. So, again, time to sell, partner or ground lease. And the indoor seating disappeared during the pandemic, and shows no sign of a return. It's become a take-out joint.
Not a true developer, Fana Group has made something of a specialty out of land banking and then selling well-located sites. The corner at 802 Pine St., near the old and new halves of the convention center, is perhaps its last key investment to sell. But the price will be far higher than its last trade, in 2006, for $20 million.
Franz Bakery has 4.7 acres on South Jackson Street, with zoning up to 75 and 55 feet. The bakery belongs in Kent, and the city needs more rental housing.
Got a tip? Contact DJC real estate editor Brian Miller at firstname.lastname@example.org or call him at (206) 219-6517.