Lake Union Partners’ $30 million plan for the languishing Eitel Building is benefiting from broader efforts to clean up and redefine downtown Seattle’s Pike-Pine corridor.
Just a block east of the bustling and popular Pike Place Market, the upper floors of the 111-year-old Eitel Building are vacant, as they have been for decades. Paint is peeling. Radiators are idle. Windows are boarded up.
Outside on the street below, assaults, homicides and drug deals have plagued the Pike Street corridor for years. Last April, the city arrested more than 100 suspects as part of a “9½ block strategy” to clean up drug dealing in downtown’s retail core and the Market.
Buoyed by that effort, Seattle-based Lake Union Partners recently bought the seven-story Eitel for $5.35 million and expects to invest about $25 million to reopen it in two years as a boutique hotel.
Built in 1904 and completed in 1905, the Eitel was designated a historic landmark in 2006. Despite the tumbledown interiors, its heavy timber and steel columns are intact. The developers are seeking a permit to add an eighth floor, set back from the existing parapet, for guest rooms with small private patios as well as a rooftop bar with views of the Market, Elliott Bay and downtown.
“For us it’s a huge responsibility given the location and history of the building,” said Joe Ferguson, one of the development firm’s four partners.
Most Read Business Stories
- Here’s one more sign of cooling in Seattle’s hot housing market
- FAA flags potential safety problem in layout of controls on Boeing 767 and 757 planes
- US McDonald's workers strike to protest workplace harassment
- Zillow's zeal to outbid for homes backfires in flipping fumble
- FDA panel backs Pfizer’s low-dose COVID-19 vaccine for kids
Downtown leaders say the Eitel’s renovation, as well as Urban Visions’ construction of a 39-story apartment tower kitty-corner from it, are part of broader improvements throughout the Pike-Pine corridor.
“The density of that site in the heart of the downtown a block from the Market needs to be maximized so it’s drawing as many people during the day and into the evening as possible,” said Jon Scholes, president of the Downtown Seattle Association.
The Eitel, at 1501 Second Ave., began as a home to small offices where dentists, doctors and others treated the ailments of the city’s residents.
In 1907, an osteopath in the building advertised his ability to treat “Rheumatism, constipation, tumors and chronic diseases,” according to The Seattle Daily Times.
“All foot troubles corrected,” declared another doctor in a 1914 edition of the newspaper. “Use no acids to burn the feet or cause infection.”
The ground-floor retail spaces have had a series of tenants over the past decade including a Dr. Martens footwear store and a wig shop. The upper floors have been unoccupied since the 1970s, said Patrick Foley, another principal at Lake Union Partners.
Local real-estate investor Richard “Dick” Nimmer, who bought the property in 1975, made several unsuccessful attempts to redevelop it and battled historic-preservation advocates over the landmark status. Nimmer didn’t return a call seeking comment.
Nimmer had several tentative deals to sell the building, but each fell apart. One buyer wanted to turn the Eitel into apartments, another into offices and yet another into a hotel.
“This was not about necessarily the highest price. This was about who could pull it off,” said Dan Swanson, the Kidder Mathews broker who represented Lake Union Partners. Other buyers “lacked either the right business model or the tenacity to persevere on this tough deal.”
Moreover, damage from the 2001 Nisqually earthquake might have turned off potential buyers. Foley said the quake caused a brick wall connected to the roof to separate a couple inches, but the rest of the structure is in good condition.
“We’re very fortunate,” Foley said.
The efforts to improve the surrounding neighborhood “definitely helped” Lake Union Partners decide to take on the project, Foley said.
Included in the city’s “9½ Block Strategy” is an operations center, across from the Eitel on Second Avenue between Pike and Pine streets, where police, prosecutors and social-service providers coordinate their actions.
The Downtown Seattle Association has grand hopes for the one-mile stretch between Pike Place Market and Melrose Market on Capitol Hill: It talks about putting the corridor on par with Chicago’s “Magnificent Mile,” an upscale commercial stretch of Michigan Avenue.
Over the past two years, the Pike-Pine area has seen more than $233 million in new construction and renovations, the association says. Another $118 million of development is under construction.
Westlake Park, two blocks east of the Eitel, was once a haven of sketchy activity. But it’s now a community center, with a children’s playground, Ping-Pong tables and an event calendar managed by the Downtown Seattle Association. The effort is modeled after one in Manhattan that made women feel more safe using the park behind the New York Public Library.
Developer Greg Smith, who served on the downtown association’s Pike-Pine task force, said the improvements and new development are finally filling in “the missing link” between Westlake Park and the Market.
“It’s like a light-switch changes, and it’s not a drug zone any more,” Smith said. “It’s an extension of the retail core or the Pike Place Market core.”
Smith manages a partnership that in 2006 bought the Liberty Building, which sits due west of the Eitel, for $3.33 million. At the time, the Liberty housed a porn-video store and a consignment shop he says was being used to sell stolen merchandise. After renovating the building, Smith leased it to the Hard Rock Cafe.
Across Second Avenue, east of the Eitel, Smith acquired the Columbia Building in 2013 for $11.75 million and renamed it the Chromer. The Elysian Brewery has a storefront and outdoor seating in a city parklet. Smith said he’s considering putting on the site a 240-foot building with two levels of retail and 10 floors of offices.
Other development projects are bubbling along Second Avenue.
To the north, at the northeast corner of Second Avenue and Pine Street, national developer Equity Residential is building a 39-story, 398-unit apartment tower. At the southwest corner of Second Avenue and Stewart Street, national firm Principal Real Estate Investors has applied to the city for a permit for a 40-story, 196-unit apartment tower.
Lake Union Partners’ redevelopment of the Eitel also benefits from the $73 million expansion of Pike Place Market.
Collectively, the new development will bring more residents, shoppers and tourists into the Pike-Pine area.
“That’s what’s ultimately going to improve the security situation down there,” Foley said. “People working and living there.”