Which is worse for Pioneer Square: a slightly taller hotel or another damn office building? That’s still an open question following yesterday’s inconclusive city council


No Welcome to the Marriott

Licata puts the kibosh on Alaska Building hotel conversion. For now.


Which is worse for Pioneer Square: a slightly taller hotel or another damn office building? That’s still an open question following yesterday’s inconclusive city council meeting, which was to consider a zoning exemption for extra floors to be added to the historic 103-year-old Alaska Building. Though the building’s owner is intent on all (conversion to a 250-room Marriott hotel) or nothing (the same dingy 15-story office tower), council member Nick Licata succeeded in adding language to the proposed zoning amendment that would deny the extra floors to any purpose but housing.

“I always felt that building should be used for housing,” Licata explains. “My amendment is basically to strip out the hotel.” He notes that he essentially borrowed the legislative strategy from fellow council member Richard Conlin (now said to be opting for the Marriott as the lesser of two evils). And, so far as housing advocates are concerned, he points to the King County deal just approved to sell the parking lots north of Safeco Field to developers, which should create around 400 units of housing near Pioneer Square. Of the Alaska Building’s role as hotel, condo, or office building, he says, “It’s not like this is a make-or-break deal.”

While housing advocates and labor groups who oppose the non-union Marriott might cheer Licata’s resistance, there’s not such a clamor for new hotels, where Pioneer Square is rather underserved. There’s a small Best Western on Yesler, and the Arctic Club Building at Third and Cherry—sold by the city at the same time as the Alaska Building—is being renovated into a 120-room boutique hotel. But Seattle’s many new hotel-condos are sprouting north of Pioneer Square and up through the Denny Triangle—meaning new construction, with fewer zoning restrictions.

With so much construction, you might think there’s a hotel glut in this town. Not so, according to broker-turned-hotelier Craig Schafer, who runs the Ändra Hotel (which wouldn’t compete with the lower-priced Marriott). “There is support for additional rooms in the market, provided the economy stays strong. To put a few Ks in over a decade is not a big deal,” especially given Seattle’s increase in population and wealth over the same period. With only 250 new rooms in the proposed hotel, he points to the projected cost of conversion: $85 million—“that’s a lot of money to spend per key.” He also terms the proposed rooftop addition of some 37,000 square feet and 30-odd rooms “a very, very expensive upgrade.”

Which is why the Alaska Building’s lead developer, Kauri Investments, is rather cleverly engaged in all-or-nothing brinksmanship with the council. Give us the bigger hotel, it’s essentially saying, or you’re stuck with another old office building that empties out at night. (Efforts to reach the firm were unsuccessful.)

Not that Licata seems so worried by the latter prospect. “The chance of it being used for office [space] is fairly low,” he insists, arguing that in the long term, there’s little tenant demand for older Grade B office space, and that the Alaska Building’s present owners will eventually find a better return in conversion to housing (which entails costly seismic improvements to meet residential code). “That building needs to be renovated.” Would the Alaska Building conversion be more palatable for him and the council if the developers added housing in one of those hotel-condo duplexes? “I think it would be helpful.” Still, no one would expect that to be sub-market housing; nor would the city have any leverage in that direction.

The council will next revisit the Alaska Building’s zoning rewrite on July 16. Licata’s language could stand (office building) or be replaced by other council members (hotel). He estimates the votes (of nine) are presently arrayed about three against three, with three still undecided.

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