In Seattle, everything’s for sale.
With every new announcement of a longtime business or building selling or making way for apartment buildings, the sense heightens that nothing is sacred.
So it was no wonder that after CHS reported that iconic Capitol Hill property Melrose Market sold to Regency Centers, a Florida-based real estate investment trust, for $15.5 million, many feared the worst for the preservation and locavore focused retail development home to Sitka and Spruce and Terra Plata.
“I got so many texts, it wasn’t funny,” says Terra Plata chef/owner Tamara Murphy, who says she’s had to calm down many people. Murphy’s not stressed, she says. “They’re not going to turn into a shopping center, at least not in ten years,” Murphy noted that the tenants in the building are safe until their leases run out. Many of the building’s tenants have long-term leases with renewal provisions. “They can’t turn around and say we’re out.”
No, Melrose Market won’t be razed to make way for a new condo building, said Craig Ramey, Regency’s managing director for the Pacific Northwest, Northern California and Colorado. “That’s not anywhere in anyone’s plans. [Regency’s] core business is retail.”
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Still, with Regency’s other ‘assets’ such as Broadway Market shopping center, Roosevelt Square, and Ballard Blocks and other, more strip mall-type properties across the country in mind, the question remains whether the company will tinker with Melrose Market’s success formula of small, locally-owned businesses and restaurants in an award-winning, preservation-focused decor.
Or, as Marseille owner Brandin Myett put it: “What if someone leaves and they put a Chipotle here? That’s not what this place is supposed to be.”
“The locally-owned businesses are exactly what we want,” Ramey said. “The whole reason we like this property is because of this unique local feel. And those we are part of it. That’s exactly the appeal. Not to change it, but to run what’s already great there.”
Ramey said Regency has no plans to make changes or put other types of businesses in, although he said he couldn’t “make a decision today” about what’s going to happen “in ten years; if someone leaves.”
Seattle developers Liz Dunn and Scott Shapiro purchased the auto row-era building for $3 million in 2008 and took on the transformation of the property into an open market place with shops and restaurants for a 2010 debut centered around anchor tenant Sitka and Spruce after Matt Dillon agreed to relocate his critically acclaimed restaurant from Eastlake. Terra Plata’s opening in Melrose Market was a less tidy affair with a legal battle that delayed the project finally wrapping up in time for a late 2011 debut. Other tenants of the currently fully-leased building include Rain Shadow Meats, Homegrown, Taylor Shellfish, the Melrose Studios event space, Greenfire Loft, Butter Home, Still Liquor, and Glasswing.
“It’s bittersweet,” said Shapiro when asked for comment on the sale. “It’s like letting your kid go off to college. You helped create something, you’ve seen it grow and mature. Now it’s ready for it to take the next stage of its existence.” Shapiro, who’s working on an apartment building in Columbia City and a micro-housing project in Nashville, Tennessee with his company Eagle Rock Ventures, said the sale helped free up resources for new projects, which he cited as main reason for the sale.
Dunn’s development company Dunn and Hobbes is next setting its sights on the Central District with planning begun on a “four-story building.”
Many tenants say they’re thankful for Dunn and Shapiro creating something wonderful. Still, among some tenants, there’s a sense that perhaps Dunn and Shapiro had so many other projects going on, they’d become less interested in Melrose Market. Some tenants say the building, which was managed by an affiliate of Eagle Rock Ventures was left “unmanaged” in recent years, with repairs and updates experiencing delays. Some tenants also say the “lack of management” coincided with a period of declining foot traffic due to construction in the area of the market, which they felt the management could have responded to better.
“As local owners, we’ve been very responsive to any property management needs,” Shapiro said. “As for foot traffic, we tried to take steps and to mitigate the adverse effects of construction. For example, Liz and I, with our teams and outside experts, increased our marketing and PR efforts to bring greater awareness of Melrose Market.”
“Two summers ago, I sat Liz and Scott down and was basically like: ‘hey, my business if failing, yours is failing, we’re all suffering, we need help,’” said Russell Flint from Melrose Market’s Rain Shadow Meats. “In the last year and a half, Liz has pushed for us to get some promotion and pay for some advertising, got us an event coordinator, … things were starting to look up, and then they decided to sell it and then it just fizzled out in the last few months.”
Though some are worried or skeptical, tenants say they are hopeful the new owners will bring a breath of fresh air.
“Of all the different potential buyers, [Regency] seemed like they were more engaged. I mean, the other potential buyers were basically douchey New York investors arriving in a fancy town car with their driver and first stopping at the Starbucks Reserve Roastery before going into our building,” said one tenant who didn’t want to be named out of concern for the reputation of their business. “The people from Regency were not like that at all. They met each business owner in person and seemed interested and engaged.”
“But,” the tenant added, “the whole transition hasn’t taken place, and we have to see yet the direction it’s headed. We’re still in limbo.”
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