One of the few coveted parcels in the city that can be licensed for marijuana retail has hit the real estate market in the Central District but demand for the property isn’t being driven by pot entrepreneurs, Ponder owner John Branch tells CHS.
“It has appreciated to the point that retail isn’t a good use,” Branch said about this small stretch of E Union between 24th and 25th Avenues that the Ponder shop calls home. “Increased housing, mixed with retail on the lower floor,” that’s what is coming next, the pot shop owner says.
Seattle’s marijuana real estate boom is faded. The growing city’s other addiction is tough to outpace. The demand for new housing development has driven Branch and Pete Sikov, the real estate investor he owns the property with, to put the Ponder shop and the neighboring single family style house they purchased next door on the market for $3.15 million. They purchased the properties seven years ago for a combined $1.2 million and change.
“This is a unique opportunity to obtain one of the last remaining large parcels in a location where demand for development is at a premium,” the Windermere sales pitch reads:
This property is surrounded by the demand for development in every direction. There are huge new construction projects next door, kitty- corner, across the street and down the block. Parking requirements are at a minimum, to maximize on the number of potential units.
It’s true. The Lake Union Partners-developed, market-rate, four-story Stencil mixed-use project rose on the block six years ago. Across the street, the Liberty Bank Building affordable housing and inclusive development from Community Roots Housing opened in 2019.
One block west, contractors for Lake Union Partners are finishing construction on the massive Midtown Square development, a three-piece, seven-story mixed-use apartment development with 428 market-rate and affordable apartment units, a quasi-public central plaza, and a huge underground parking garage. Regional pharmacy chain Bartell Drugs is had been planned to occupy the large retail space on the corner of 23rd and Union with a mix of smaller, more neighborhood focused retail and restaurant spaces surrounding the inner square, — “with a goal of renting to local, minority-owned businesses,” Lake Union Partners says. Neighborhood favorites Raised Doughnuts and the Neighbor Lady bar, displaced in a squabble with pot shop entrepreneur and landlord Ian Eisenberg, are lined up to join the opening-soon project.
Branch says the neighboring growth was expected. What really put the Ponder property on turbo boost toward development was Seattle’s Mandatory Housing Affordability program. In the process leading up to 2019’s Ed Murray and Bruce Harrell-led rezoning of the city’s densest neighborhoods to allow for taller buildings with more housing units, the Central District was surgically rezoned first in what was positioned as city leaders taking action to address issues of displacement and gentrification in the city’s core. Because it was part of more significant zoning changes, the land now has higher affordable housing requirements for developers to either include a portion of the units as affordable or pay fees to support development of affordable housing elsewhere in the city. Branch and Sikov’s properties were part of a rezone that boosted allowed heights from 40 to 55 feet — enough for at least another floor of height in development projects.
As property owners, Branch said, the partnership with Sikov was always expected to eventually be part of developing the land — but the planned timeline had been more than six years.
“I originally bought the land to have a long term location for Ponder,” Branch said. “But the value has dramatically increased to the point that it’s a lot of capital tied up in the land.”
“Before, it was just one of the buildings on the block. Now, it’s the only undeveloped building on the street.”
The stream of unsolicited offers to purchase the property can now transition to the real deal.
Any sale will probably bring the end of the Ponder shop though Branch does intend to sell the license to a buyer who might be interested in reopening a shop nearby. Branch says he is ready to move onto other pursuits.
“I don’t think it’s going to be me,” he said. “It will be somebody who has the energy to take it on.”
Ponder opened quietly in the Central District around this time of year in 2015 as the neighborhood’s second pot shop. A year earlier, Eisenberg opened his first Uncle Ike’s location at 23rd and Union, and, for a time, the store sold more pot than any other in Seattle. Ponder has continued on as a quiet alternative to the flashier, more ambitious Ike’s. There are currently five Ike’s locations around Seattle including two on Capitol Hill.
Current state laws limit ownership to five licenses per individual so it’s not clear if Eisenberg’s business organization would allow for the pot entrepreneur to put in a bid on Ponder ownership. Eisenberg did not respond to CHS’s inquiry about Ponder hitting the market.
Branch declined to comment on any specific individuals making offers for the 2413 E Union property or the license.
In the meantime, the shop remains open on another block of the Central District being readied for incredible changes.
“Ponder’s not going to close tomorrow,” Branch said. “Maybe within a year.”
“I really enjoyed being in the neighborhood. It’s with a heavy heart at some point that Ponder is going to move out of there.”
UPDATE 9/13/2021 4:20 PM: The local chapter of the United Food and Commercial Workers announced that Ponder is the latest cannabis shop in Seattle to unionize. We’ll ask Branch more about how that factors into his decision to sell the store and update when we learn more.
Workers at Ponder Cannabis Shop in Seattle won their union election and are joining the UFCW 21 family!
All across WA, cannabis workers are organizing for fair contracts, for respect in the workplace, and for the right to unionize. pic.twitter.com/HXr5KYv461
— UFCW 21 (@UFCW21) September 13, 2021
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