Neglected downtown landmark could become a hotel

By Eric Pryne
Seattle Times business reporter

One of downtown Seattle’s most-neglected historic buildings could become a boutique hotel.

Ariel Development of Seattle has signed a contract to buy the 7-story, 108-year-old Eitel Building at Second Avenue and Pike Street, Shimon Mizrahi, one of Ariel’s owners, said Thursday.

The sale is expected to close by the end of the year, he said. After that, converting the mostly empty office building into an 80-room hotel would take 12 to 18 months, he added.

The Eitel Building’s location, a block from the Pike Place Market and close to downtown’s retail center, is ideal for a hotel, Mizrahi said.

Ariel, led by Mizrahi and Herzel Hazan, has been involved in several Seattle hotel projects, including the Courtyard by Marriott at the renovated Alaska Building and the new Hyatt Place Hotel & Towers on Denny Way near Seattle Center.

The Eitel Building has been owned since 1975 by Richard Nimmer, of Seattle. While the ground floor is rented to retail tenants, the upper floors have been vacant for decades.

The building was designated a historic landmark in 2006.

Nimmer made several unsuccessful attempts to redevelop, either by demolishing the building or adding more floors to it, and engaged in a long battle with historic-preservation advocates.

He put the building up for sale last fall, asking $4.85 million. Nimmer declined to comment Thursday.

Historic Seattle, a preservation group, led the push for landmark designation for the Eitel Building. Eugenia Woo, the nonprofit’s director of preservation services, said she’s delighted with Ariel’s proposal.

“It’s exactly what we were hoping for that location,” she said. “It needs to be cleaned up, but it’s a really nice building.”

Ariel plans to preserve the building’s exterior, Mizrahi said. It’s too soon to say what the renovation will cost, he added, or who Ariel’s partners in the project might be.

A hotel operator has not yet been signed, he said.

The building is named for brothers David and Fred Eitel, the developers who built it in 1904.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

June 02, 2008

Hyatt Place hotel/apartments coming up

By JOURNAL STAFF

Photo by Soundview Aerial Photography

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Crews from Malcolm Drilling Co. recently finished temporary shoring work to prepare the Hyatt Place hotel and apartment project for its foundation, which is now under construction along with lower-level parking garage walls.

Malcolm installed about 32,000 square feet of shoring, including 157 vertical elements and 716 soil nails. The subcontractor also attached horizontal tierods to the Marselle condo project across the alley to the east.

Graham Contracting is the general contractor for the $60 million hotel/apartment project being developed by Kauri Investments and Ariel Development at 600 Denny Way. When finished in the fall of 2009, the project will have 160 hotel rooms geared toward business travelers and 56 upscale apartments.

The hotel and apartment components will share a common wall, but will have separate entrances and elevators. Johnson Braund Design Group is the architect. Ground Support was the shoring designer.

June 23, 2003

Rainier Brewery could become artist
space

By JOE NABBEFELD
Journal Real Estate Editor

Eight years ago, Herzel Hazan and Shimon Mizrahi began their
development careers together by creating four convenience store gas
stations in Seattle and a small retail outlet in Burien.

They’ve advanced to become partners with Silver Cloud Inns in
developing a future hotel next to Safeco Field and another on Broadway,
near Seattle University. The Safeco Silver Cloud will replace one of
their convenience store gas stations.

The 41- and 43-year-old developers also launched plans to replace their
station near Seattle Center with offices and condos, but that project
was put on ice after the dot-com bust.

Now they’re stepping up to buy the former Rainier Brewery in the Sodo
area for about $6 million. They’d spend another $2 million removing beer
brewing equipment and then fill it with low-rent artist studios and
possibly artist live-work units and galleries.

Tully’s Coffee would like stay, too, as a tenant in 80,000 to 100,000
square feet of the 240,000-square-foot, landmark on Airport Way, next
to Interstate 5.

“It was Herzel’s idea. It’s his vision,” said Mizrahi. “He has more of
his heart in art.”

The purchase from Benaroya Co. could come together in a few weeks.
“We’re close to closing,” Mizrahi said.

Some local real estate experts said they remain skeptical that Mizrahi
and Hazan, who work together as Ariel Development, will close on the
deal, though, because it’s hard to collect enough rent from artists to
make such a complex profitably.

“It’s certainly not a dumb idea. It’s a good idea … but I don’t know
if there are enough artists to fill it up,” said Art Wahl, a manager at
the CB Richard Ellis brokerage.

Since 1974, Wahl has been an owner of the Pioneer Square building that
houses F.X. McRory’s. He and his two partners evaluated turning the
space above the F.X. McRory’s restaurant into art studios many times but
never could make it work, he said. He has looked at doing the same in an
industrial structure near Georgetown and passed.

“When you get down to it, the artists have to pay rent,” Wahl said. “I
think it would be a great addition to the city, but I’m just skeptical.”

Stroh Brewing Co. transferred the brewing of Rainier Beer to Tumwater
in 1999 and sold the brewery and 15 acres of land on Airport Way to
Benaroya for $17.6 million. Benaroya sold 11 acres to Sound Transit for
a rail yard for a $24.3 million, giving Benaroya a hefty profit even if
it did nothing with the brewery building.

Benaroya leased the building to Tully’s and explored what to do with it
long-term. Last year, Benaroya drew up plans for converting the
structure into space for established artists and put it up for sale with
those plans for $7.5 million. No buyer emerged and the asking price has
dropped to $6.5 million.

Hazan and Mizrahi have altered the plan to offer cheaper, trimmed-down
space for less established artists. Mizrahi said they’re looking at
charging rents of $7 to $10 per square foot. Wahl, the skeptic, said
that could still be a bit high for artists.

“We’d have a lot of space” to offer, Mizrahi.

“You can create some really neat space in there,” said Tamir Ohayon, a
Puget Sound Properties broker who is representing Hazan and Mizrahi in
the deal. “It’s like a bunker in there.”

They’re looking at converting several huge tanks that rise about 30
feet off the ground on the brewery’s south side into studios. “Wouldn’t
that be cool?” Mizrahi said. Their plan also calls for installing
windows throughout the building.

The developers have been contacting artists and arts organizations
around the area to build momentum, much of that through consultant Conan
Gayle.

Mizrahi and Hazan both grew up in Israel but didn’t meet until each had
moved to Seattle 12 years ago.

Mizrahi, 43, spent two years in Los Angeles converting apartments into
condos before he moved to Seattle to do condo conversions here. Hazan,
41, started on the construction side.

“We became friends here and were always looking for something to do
together,” Mizrahi said. Their company, Ariel Development, is named
after one of Mizrahi’s two young sons.

Their first project was building the gas station north of Safeco Field,
at First Avenue and Royal Brougham Way, Mizrahi said. The station
includes a Tully’s, Taco Bell and a lot of groceries, so Mizrahi
described it as “more of a mini-mall” than a convenience store.

Their station at Denny Way and Aurora Avenue follows a similar format.

Ariel is a joint venture partner with Silver Cloud Inns to replace the
Safeco station with a high-rise Silver Cloud. That proposal is in for
permits. That deal with Silver Could led to the second joint venture to
develop the hotel that’s scheduled to open in October on Broadway.

Their architect on at least two of the stations, Broadway Silver Cloud
and the brewery is Ed Linardic’s LDG Architects.