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Why nobody* is building hotels or office space in Pike/Pine

There should totally be a hotel here, a developer says (Image: Bernard)

If Pike/Pine is an attractive area to live for a year or a lifetime, why aren’t there more places in the neighborhood that let you stay for a night or two?

While new apartments and condos have mushroomed through Capitol Hill’s Pike/Pine neighborhood, there have been no new hotels and none are in the pipeline. One noted developer says there’s a simple reason. 

“The land use code is pretty much stacked up against doing it,” says Scott Shapiro, a partner behind the Melrose Market development and many other projects on the Hill including this microhousing development planned for 12th Ave.

Shapiro and others are hoping the city will revisit zoning regulations that were put in place more than a decade ago that favor residential development over strictly commercial uses.


“There have been a lot of apartments…There aren’t enough hotels in the mix,” says Shapiro. “And it’s not just hotels, it’s also office space. There are creative companies that want to be on Capitol Hill but there is not enough Class A office space.”

To illustrate the zoning double-standard, Shapiro points to a 9,000 square-foot lot for sale at the corner of Belmont Ave and E. Pike St. According to city regulations, a new residential development there could have a maximum Floor Area Ratio (FAR) of 4.75, while a commercial development is limited to a FAR of 2. 

In practice, that means an apartment or condo on the site could be 4.75 times the floor area or 42,750 square feet. A hotel or office building on the same site can only be 2 times the floor area — or 18,000 square feet.

“The apartment developer has the advantage. I can’t compete against someone who can build twice as much,” said Shapiro. “We’re not asking for more height, we just want an even playing field.” 

Plenty of apartments on E Pine? (Image: Bernard)

The zoning disparity dates back to the mid 1990s when the Pike/Pine Overlay District was established to address concerns that high-density commercial development would creep up the Hill from downtown. The overlay, with few exceptions, imposed limits on non-residential use, while encouraging affordable and market-rate housing.

“There’s no reason for commercial developers to look at Pike/Pine,” said Hugh Schaeffer, a principal at architecture firm S+H Works. Schaeffer says when he and his clients, including Shapiro, look at properties on Capitol Hill, “the commercial option usually goes right out the door because it’s just not going to pencil out.”

This zoning distinction applies roughly to Pike and Pine Streets (and some of Union and Olive) between I-5 and 15the Ave E. It does not extend north on Broadway — so you could see a hotel near the light rail station developments join the Silver Cloud on Broadway. 

Dennis Meier, the city’s senior urban designer who oversees Pike/Pine, says it may be time to re-evaluate the regulations because they seem to have achieved the goal of increasing the residential supply. But while Meier acknowledges the value of diversity in development, he said there’s also virtue in balance.

“There is interest in preserving the neighborhood and not throw gasoline on the fire of development,” says Meier. “Any direction that you might consider going, you have to weigh the factors. Because of the character of the neighborhood, you want to be cautious.” 

Shapiro, who brought up the issue at a recent meeting of the Pike Pine Urban Neighborhood Council, says he wants a balance too because a diversified mix makes for a better community.

“You want to have residential, you want to have offices, you want public spaces,” says Shapiro. “It would be nice to have the option to do what makes the most sense.”

Meanwhile, at least one intrepid developer is moving forward despite the limited environment and the likelihood she’s leaving money on the table by not pumping even more housing capacity into Pike/Pine. Liz Dunn, Shapiro’s partner on Melrose Market, has cut the apartments and unveiled her plans to build a project mixing restaurant and office space on 11th Ave behind her Piston Ring building.

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12 thoughts on “Why nobody* is building hotels or office space in Pike/Pine

  1. If people really wanted the Capitol Hill experience they can always try the more low key route of AirBnB or CouchSurfer. Checking both sites shows an ample number of available spaces in the Capitol Hill area for prices significantly less than one would pay for a hotel room.

  2. I would love to see more hotels – not because of the need for the ‘Cap Hill Experience’ but more because it would be nice to have a place close by that friends and family could stay. Most places on the hill are small and/or there are people who would prefer to stay in hotels rather than crash on the couch or air matress. There are only a handful of B&B and a lot of people aren’t interested in crashing on some stranger’s couch via CouchSurfer.

  3. The streets in the picture look about as deserted as the apartment buildings. No business person in their right mind would ever think to set up an office downtown because of the high cost, high crime and comically high parking rates. It doesn’t take a genius to figure that out. The smart office builders go outside the city, outside the high-crime areas, where there is much more parking. In other words, outside the box. The downtown “box” belongs to yesteryear. Even east of downtown is a bad idea.

  4. I have argued on numerous occasions with friends that what Capitol Hill needs is more office space/commercial real estate options. I love that Capitol Hill has its own vibe; however, if we are going to tout ourselves as the area for great food and entertainment, we should be doing more to bring new customers to our local businesses. Imagine if we had a few small/mid-size companies move into the area, this would help maintain all of our favorite local restaurants by bringing in the lunchtime crowd, pull in more funding for infrastructure projects and ultimately bring in more money for the local economy. Plus if a local resident were able to land a job in the area, think about the increase in quality of life by being able to work or bike to work.

  5. And yet downtown and Pioneer Square are full of start-ups. Zillow, Popcap, Moprise, Payscale… Maybe none of them are in their “right mind” or maybe they don’t have such a negative view of the area?

  6. I’d love to see a few mid-sized hotels on the Hill. Additionally, I love the idea of a traveler’s hostel across from the Broadway Light Rail Station. Make it easy for lower budget travelers to our city experience one of its best neighborhoods.

  7. Pike Pine and the rest of the Hill do need a change in zoning to allow for a greater variety of uses, including office and hotel. While a great night time spot, daytime retailers need the type number of patrons that our restaurant and bar patrons provide, and that office workers and hotel guests enable. Such a change would also make the Hill a more complete neighborhood, by providing a greater variety of employment options and a more diverse community.

  8. If the area does not consider some changes which include the ability to build hotels, offices, and other mixed use buildings, diversity in businesses will suffer greatly. As a retailer we can directly relate that not enough pedestrian traffic is out to shop during lunch/post-work hours (12pm-1pm, 3pm-5pm) to merit a viable business for regular-jane/joe business owners. Rent for commercial spaces is the next biggest issue.

    If rent profiles don’t change, Capitol Hill will only have businesses owned/run by people with high-income backgrounds. Perhaps folks think this is inevitable, but it will probably mean things on the Hill will eventually look a lot like the Eastside: mostly chain stores, and few mom-and-pop independent retailers with character, heart, and love for the neighborhood in all its forms– upscale and scruffy, young and old, friendly and introverted.

  9. I agree completely that this is needed. One only has to look at what is happening in South Lake Union…the streets there are crawling with Amazon workers, especially at lunchtime, and they help support various local businesses. Have you ever been in the Westlake Whole Foods around mid-day?….it’s a mob scene. That store is a goldmine thanks to Amazon.

  10. Even though there may not be enough hotels, we have amazing vacation rentals that are very nice, have full kitchens, and so much more space than a hotel room. They are in high rises downtown like Harbor Steps on 1st and University and our prices are so much better than neighboring hotels. Check us out at http://www.PicturePropertiesVacationRentals.com Vacation rentals are becoming more and more popular, and once a guest stays with us, they rarely go back to a hotel room. P.S. Go Hawks!!!

  11. Pingback: ‘Seattle’s top startup’ grows off Capitol Hill | CHS Capitol Hill Seattle