Shakedown

As Pike Place Market experiences record vacancies, can it boost business while retaining its quirky soul

Last fall, business was drying up at the Retro Viva clothing store at Pike Place Market. So owner Cindy Speare asked her landlord, the Market's Preservation and Development Authority (PDA), for help covering the costs of remodeling that would allow her to introduce new merchandise. She thought her 21 years at the Market, not to mention the thousands of dollars she herself had already invested in the space on First Avenue, would earn her some goodwill.

But staff at the PDA weren't interested in helping her, Speare says. As a matter of fact, they brought her to tears with their blunt response. Meanwhile, rainwater leaked from the ceiling onto her clothing racks. And she was finding the landlords at her several other locations easier to deal with. So she closed up her Market shop in March.

The storefront has sat vacant ever since.

Have old habits at the PDA exacerbated a new problem at the Market? Since the onset of the economic downturn last fall, seven other shops have also left the Market. Encouraging businesses to stay hasn't typically been the primary imperative for the PDA; new applicants have always been waiting for Market space.

Not anymore. Not since the Market was revitalized in the 1960s has it seen so many empty storefronts. In addition to Retro Viva, the vacancies also include another prominent First Avenue address that used to house Goldman's Jewelers.

The PDA finally resorted to hiring a real-estate broker to help with the problem. "We hadn't been proactive [at recruiting tenants] before, because we didn't need to be," says PDA executive director Daniel Lieberman. The measure apparently worked. Lieberman says five vacancies are on the verge of being filled—after almost a year of trying.

But the loss of lease revenue from those empty spaces has contributed to a tight budget year at the PDA. Its lease revenues have gone flat, while utility and insurance costs have soared. In response, the PDA had to cut its 2002 administrative budget and bump up rents. The timing isn't good: This year the PDA had to start looking for $17 million in surplus revenue—almost twice its annual revenue—that will be needed over the next 10 years to shore up its aging buildings, where, like Speare, merchants have to dodge rivulets of water that leak through the ceilings during rain storms.

The PDA has a tough job balancing the needs of Market merchants against the tight restrictions the Market's Historical Commission imposes on the use of the publicly owned retail space. Tenants first have to meet general requirements (they have to be owner-operated, no chain stores), and then each has to agree to further lease restrictions, which the PDA is in charge of enforcing. But some merchants, particularly the smaller ones, say the PDA has forgotten that it's supposed to value mom and pop stores, not bully them with rules and bureaucracy. "We've got to return this Market back to what it's supposed to be," says artist Patrick Kerr, who has helped whip the Pike Place Merchants Association into a confrontational stance with the PDA, resulting in the association passing a no-confidence resolution against the PDA in March.

But determining what the Market is "sup- posed to be" is not a simple proposition. It's a hundred-year-old question that's sparked heated standoffs between vendors and Market officials dating back to the 1920s. Farmers once threatened to pull out of the Market because their hated rivals, commercial produce wholesalers, were allowed to rent prime space on Pike Place. Now, economic hard times are causing a painful shakeout at the Market that's prompted shop owners to look up from their cash register receipts and begin to loudly debate the matter again. Most of the Market vacancies are in the small nooks and crannies in the Market's down-under area—the twisty series of passageways where shop windows are cluttered with curios and the air is perpetually redolent of incense. Start-up businesses like Kerr's, a gallery that sells his pen-and-ink renderings of Seattle landmarks, often make their debuts on these floors.

The PDA council offered one solution to the merchants' economic woes in May. Responding to complaints that business has simply become insupportable in the Market's down-under area, the council suggested that the space be converted into offices. Predictably, tempers flared, and the proposal has since been shelved—but only after cost estimates for remodeling were found to be too high.

Can the PDA preserve Pike Place Market's quirky, homespun characteristics as it tries to chart a financially viable future for the public landmark? That's the most difficult challenge the PDA faces as it forays into new ventures that it hopes will ultimately drum up more business, including the first proposed expansion to the Market in more than a half-century.

Market advocates have high hopes for the expansion, planned on a city-owned parking lot (dubbed the PC-1 North site) across from the Market on Western Avenue, just south of Victor Steinbrueck Park. No one is sure how the space will be used—suggestions range from a multistoried building with retail space to landscaped parkland—nor even if the PDA can afford to buy the lot from the city. But boosters hope the proposed addition will coax more pedestrian traffic through the Market by shoring up access from Western Avenue and Alaskan Way.

The current route from Alaskan Way—up a rickety staircase that climbs a trash-strewn slope—is an astonishingly humble, if not intimidating, entryway for visitors from down the hill seeking the world-famous Pike Place Market. Tom Graf, of the Downtown District Council, says the development should be a "strong statement" that gives the Market a presence on its west side.

PDA council chair Robert Van Cleve agrees, hoping that the new building will include kitchen demonstration space where chefs could show off dishes made from farmers' produce and other Market products. "It's a huge opportunity to increase traffic from the waterfront and downtown," he says. "A lot of it would go into the Market's upper levels, but the entrance to down under could also be enhanced."

The PDA has commissioned architects to hold public meetings and submit design proposals, currently on view at the American Institute of Architects building on First Avenue.

Still, the expansion plan has not been without debate. Merchants, ever suspicious that the PDA is willing to sacrifice their needs to bring in new business, fear that the PDA will allow a developer to build a high-rise that blocks their (and their customers') view of Elliott Bay. For the time being, though, none of the proposed designs rises above three stories.

Meanwhile, some downtown residents —supported by the PDA—say they could give a big boost to the Market, if only vendors would modernize their business practices a little by staying open later in the evening. The Market's business hours haven't changed much since farmers first hawked their produce to housewives on Pike Place nearly a hundred years ago: early to open, early to close. But the new breed of urban shopper tends to come out after happy hour.

Gary Howse, 36 years old and owner of a posh hair salon in Belltown, represents the new money that's moved in next door to the Market. He fantasizes about life in an older era—when neighbors knew their grocer's name without reading it off a plastic tag. So naturally he embraces the Pike Place Market, where family-owned shops are still the rule rather than the exception, as his local grocery store. Howse, who lives in a three-story condo with gleaming wood floors on Second Avenue, says community is just as important to the tide of affluent, less-family-inclined people settling into Seattle's urban core as it is to those who live elsewhere. "People think we're this massive group of people who get lost in nameless towers and that we don't interface with people in the street," Howse says, "but I think the opposite is true."

Howse, who does in fact know his butcher and his baker at the Market very well, leads the recently formed Downtown Seattle Residents Council, which has as one of its first orders of business persuading the Market to better serve the 22,000 souls who now live within walking distance. The council's had some success. In June, the PDA passed a rule allowing vendors to remain open until 8 p.m.

But on July 1, the first day the new rule took effect, few vendors were still around when the Market clock struck 6. Howse was shopping at the Market that day. The same vendors who offered to scoop the bone out of his pork loin and helped him choose the best tomatoes told him there was no way they'd be hanging around until 8. Their reasons were simple: Who wants to work an additional two hours when you've already been on your feet since 7 a.m.? And extra help is hard to find and hard to justify for just two additional hours, they said.

Still, other vendors were willing to give later hours a try. Sandy, who operates Clayzeness Whistleworks from a stall in the Market's north arcade, said she's heard people complain as merchants close up shop, so she decided to see if she could rack up extra business. "Do I look enthusiastic? I'm trying to be enthusiastic," she said, sitting beside the empty fish bins of a merchant who wasn't so enthusiastic. Just down the arcade, Mario and Luigi's produce stall was still open, too. "Why not? We're still selling," said Bonnie Viar. "It doesn't really cost any more." Actually, Viar was pleased with her new schedule. She didn't have to be at work until 10 a.m., which made staying out late at clubs a lot less painful.

Three weeks later, the upper-level arcades were just as dead in the evening, but retailers down under hadn't given up. On one floor, a smattering of shops, including longtime Market tenant Hands of the World, were still open at 7:30. Confused but persistent tourists were wending their way through the lower levels. "Is there a bakery open around here?" asked one man heading a passel of out-of-towners. There wasn't.

Howse says Market merchants will eventually have to change their ways, just as his salon did when it started running both day and evening shifts. "My business used to be open for a perfect eight-hour day, too. But it got to the point where it just couldn't be," says Howse. The Market used to be closed on Sundays, too, he notes. Now it's the Market's second-busiest day.

Yet even if the Market does build a bridge to its downtown customer base, it's not clear that the extra business would benefit down-under merchants directly. Their merchandise isn't particularly well-suited for Market regulars: How many sets of Beatles nesting dolls does one need? The fact is, tourist dollars still drive the Market.

Perhaps, though, a change of attitude at the PDA could ease the Market though the rough financial times. Michael Yaeger, who's spent more than 20 years as a Market merchant and is roundly dubbed the "mayor of the Market," says the PDA has let an overly controlling management culture develop that has exacerbated business' hardships. He says the PDA leadership has been destroying the Market in order to save it—requiring so much paperwork that mom and pop stores with creative ventures are driven off. The PDA takes the business plans required of tenants too seriously, says Yaeger, demanding details that would be expected of chain stores, not fledgling businesses. "They are looking at this Market more as a mall, a corporate entity. . . . Under these complicated leases, they're killing Seattle's spirit of entrepreneurship, which is what this Market's all about," says Yaeger.

Consider artist Patrick Kerr. He says he's just the kind of homegrown entrepreneur the Pike Place Market should welcome with open arms. So he doesn't understand why he had to endure what he calls a "nightmare" to get the gallery space he now rents in the down-under area.

The space—one in a swath of storefronts with "for lease" signs in the windows—sat empty for seven months while the PDA refused to let him rent it, says Kerr. He had already set up shop in a dark cubbyhole across the hall, but the sunny room he's in now with windows overlooking Elliott Bay was obviously a better location. Kerr continued to protest, and the PDA eventually relented. But first Kerr had to agree to some tough lease stipulations: One requires that his shop open its doors at least five days a week. Kerr relies on his family's assistance to comply; he still works a day job while the business gets started. But Kerr recently went out of town to care for his mother and got hit with a substantial fine.

Is this any way for the PDA to nurture a small business that pays its rent on time? Kerr wonders. (The PDA wouldn't comment because it doesn't discuss individual disputes with tenants.)

Some say it's long been this way. Patti Summers, whose jazz cabaret has endured some precarious financial situations during its 17 years in the Market, says PDA staff nitpicked her business plan to death trying to harass her out of her space. Summers says the PDA staff once tried to sell her belongings out from under her when she fell behind in rent. She has a copy of an ad the Market staff posted in a local newspaper listing the equipment in her club for sale.

"The merchants get no respect here, unless you're one of the high-end places," says Summers. "If they could replace me with a slick sushi bar, they would."

But merchants complain that the PDA can be too accommodating of the businesses it likes. Right now, in the space directly behind the famous Market entryway where Rachel the pig stands, a tarp wraps around the future site of Kathy Casey's Dish D'lish, the prominent debut of the locally famous food designer. The surrounding businesses are sore as hell about Casey's: The cafe was allowed to expand five feet further into the walkway than the previous establishment. Adjacent business owners say their own service counters are going to be cut off as a result.

Henry Kim, who owns the Rotary Grocery, was among those who filed an appeal with the city of Seattle to force the Market's Historical Commission to disallow Casey's the extra five feet (they lost). "New people cannot see my shop," Kim says. "It feels like my store is more inside."

Downstairs, the owner of the Honey Bear Caf頣an't serve Chinese food to her customers because the paltry exhaust fan above the stove merely flings oil down the walls rather than pull it outside. Owner Jian Yu Chen, who says she invested about $6,000 remodeling her space, has unsuccessfully appealed to the PDA for years for a new fan. So she finds it a little unfair that the PDA installed a new hood fan in the space occupied by the Emerald Kettle cafe last year.

Andrew Hanson-Krueger, the PDA's communications director, explains that the PDA sometimes improves spaces while they are unoccupied, as was the case with Emerald Kettle's location, but won't comment on why Chen's request has been denied other than to say that the PDA's ability to aid tenants is limited by building constraints and lack of money.

PDA council chair Robert Van Cleve, though, denies that the administration practices favoritism or actively recruits high-volume businesses rather than small-scale shops. "We want all our tenants to be magnets; if they're small start-ups, so much the better," he says. He does, however, say that high-profile additions like Casey's draw more customers for the Market as a whole.

And PDA executive director Daniel Lieberman stresses that Market merchants need to mind the fundamentals—regular business hours, clean windows, and well-arranged merchandise.

Lieberman has worked to reverse the acrimonious relations between the PDA and merchants that developed during the era of his predecessor, Shelly Yapp. Stepping into his job not quite three years ago, the former marketing director for the Washington State Liquor Control Board has given a big push to promotions and advertising at the Market. Critics complain that those efforts primarily tout the highly visible fish and produce vendors on the Market's street-level floor, but he has also injected a new air of diplomacy into the PDA's relationship with tenants. After the Merchants Association passed a no-confidence resolution, Lieberman instigated roundtable discussions with Market merchants and other constituents.

He admits that the sins of the past still haunt relations. "There have definitely been times we have not been as responsive as I expect." But he feels that things are improving. "If we went to every merchant, we'd find more that are pleased with our service than are displeased," he says. "Obviously, they're not the loud ones."

Still, former City Council member Charlie Chong, who just took over as chair of the Pike Place Market Constituency, believes that the PDA could think more creatively. If the PDA would let go of its fixation with difficult lease obligations, he suggests, the down-under area could become the incubator for local entrepreneurs that it was meant to be. "The PDA has gotten obsessed with something that doesn't work," he says. "These are not people who come out of Harvard Business School; they're more equivalent to the guy who sets up a hot dog stand."

Chong likes the idea of moving more craftspeople down under, saying customers will seek out artists whose work they favor, drawing more people down to the lower levels. That's not likely to please a lot of merchants down there, who say they want to see permanent residents, not crafts bazaars.

But the problems of the down-under merchants need to be resolved one way or another. "Or else we're going to find we have no more Market," Chong says.

info@seattleweekly.com

 
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