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Real Estate Editor
August 3, 2017
Before Amazon, before voters rejected the Seattle Commons (twice), before Paul Allen began buying up land in South Lake Union, there was Wally Trace. He's the guy who, during the mid-1980s, developed Chandler's Cove and an adjoining strip to the north along Fairview.
Should he be called the pioneer of South Lake Union?
“I do feel that way sometimes,” says Trace with a modest chuckle.
He started in 1984 by buying the H.C. Henry Pier, where Daniel's Broiler is now. Previously, when Benjamin's operated there, Burger King was a neighbor.
Trace went on to buy the Lone Star Cement site in 1986, and combined it with the Henry Pier to create Chandler's Cove. It's now home to El Chupacabra , Chandler's Crabhouse, Duke's Chowder House and office tenants.
In the early 1990s, Trace recalls, he and partners sold Chandler's Cove in separate transactions to Taiwanese buyers. Those buyers, plus Burger King's parent company, would later sell three parcels with 8.3 acres to Vulcan Real Estate for almost $30 million in 1999-2000.
Trace says after voters rejected Allen's Seattle Commons park offer, it made sense for Vulcan to snap up waterfront parcels and much of SLU. “It was a very logical buy. I think that was really the turning point. He got stuck with all that land. There wasn't a grand plan.”
And at the time, Amazon was just a small, struggling SoDo startup that sold books.
Now the great wheel of development is about to turn again.
In a January letter to tenants, first reported in Northwest Yachting magazine, Vulcan wrote, “We (Vulcan Real Estate) are in the early planning and design process for the redevelopment of Chandler's Cove, including both the Chandler's and H.C. Henry Pier parcels. We do not currently have a definitive timeline for the redevelopment effort. Vulcan Real Estate is under the working assumption that the earliest redevelopment can begin is during the third quarter of 2018.”
“The scope of the redevelopment will include demolition of the existing buildings and development of new infrastructure on the property, in compliance with the applicable codes. As such, all Chandler's Cove tenants will need to vacate their respective premises, which includes use of the piers and docks, in advance of the construction phase.”
This was no surprise to Duke Moscrip, who founded his eponymous chain of seafood restaurants — now numbering six, with two more in the works — in 1977. He says he has been on Lake Union since “June 30, 1989,” recalling the exact date when the Chowder House opened.
Reached by phone on a golf course in Pendleton, Oregon, where the temperature was 105 degrees, Moscrip says he doesn't know what Vulcan wants to do with Chandler's Cove. “We'd love for them to be a bit more transparent. There's all kinds of rumors. But we'd love to stay.”
Moscrip has no idea what rents Vulcan might charge in the future. And, critically, “We can't move twice. It's too expensive, too distressing.”
For that reason, he and architect Chin-Ley/Reche Associates are investigating nearby properties to the north along Fairview where he might build or lease restaurant space.
“We're looking now,” Moscrip says. “Hopefully we'll find it. We've got 16 months.” Bob Conrad of Kidder Mathews and independent broker Al Mayes are aiding in the search.
Suitable restaurant space on Lake Union is scarce, he says. Right now, the Chowder House has about 2,800 square feet, plus an outdoor patio. “We'd like to have about 4,000 square feet.”
Ironically, one such property might be the old site of his Duke's Yacht Club restaurant, which operated for about five years in the early 1990s, on land just north of Chandler's Cove.
In general, says Moscrip, “We wanna stay in the neighborhood and we wanna stay on the water. We love our location. It's killer, with Amazon and so much more housing. Even with the Mercer Mess, we did well. So many restaurants feel the same way.”
In the meantime, says Moscrip, “At Lincoln Square, we should be open by the end of the month.” He compares his new Chowder House in Bellevue to Pike Place Market or a food hall, with an open entry and more casual vibe.
He also plans a new location at Shilshole Bay Marina in Ballard, slated to open in 2019, and further expansion in California, Oregon, Colorado and beyond. So now's a good time to rethink the restaurant formula to match changing consumer tastes. Moscrip will also update the name of his chain to Duke's Seafood and Chowder. A new SLU location would allow more such innovation.
So what is Vulcan planning at Chandler's Cove?
The developer issued a short statement in response to DJC queries: “Vulcan is exploring plans to re-design Chandler's Cove to create a world-class waterfront destination that brings visitors closer to the water's edge. Master planning is underway and the work will likely not start until late 2018. All tenants have been informed that Vulcan is exploring such plans.”
Mithun is doing the master plan, but nothing has been filed yet with the city. Zoning for the area is capped at 30 feet, while the 1980s buildings that Trace developed are one- and two-stories tall. The piers and shorelands also complicate redevelopment, with more environmental regulations than on a dry, upland site.
(Editor's note: An earlier version of this article said Miller Hull was the master planner. Mithun is the master planner. Also, the height restriction was changed from 40 to 30 feet.)
“I've heard rumors,” says Trace, whose Trace Real Estate Services is now mainly concentrating on small port and waterfront development in Kitsap County and on the San Juan Islands. “I'm addicted to waterfronts.”
“They've been pretty quiet about it,” he says of Vulcan. “I have a hard time figuring out what they'd do. You hear a lot of things. I think it's a pretty tightly held story. It'll be an interesting site to redevelop.”
What would Trace like to see, given the taller zoning and large expanses of parking? “I would think a hotel would be phenomenal there.” Back in the day, “I would've loved to be able to do that,” but the zoning didn't permit such use.
As a friendly warning, however, Trace points to the old concrete plant: “The soils under it are a mess. There's no structure to it.” Nearby Lake Union Park has had similar issues with settling. Then there's the construction cost and environmental complications of dealing with piers.
“It'll be a difficult job for any developer,” Trace says, “the first time this kind of redevelopment has been done in Seattle.”
Whatever Vulcan does build, he speculates, won't be done on the cheap. And future restaurant rents won't be cheap. Chandler's Cove has appreciated so much in value during the past three decades — owing to Amazon, Facebook, Google and others — that the land has to be maximized in use. “It's a better location than it was when [Vulcan] started, but in some ways it's not.”
By that, Trace says, he means the traffic, density and shift from relaxed sit-down dining to more of a grab-and-go approach to meals. Thirty years ago, during the first SLU boom, all those lakeside restaurants were serving patrons who wanted to linger over their halibut and watch the seaplanes and sailboats. And there was no email to check on their phones, no 24-seven work cycle.
“Somehow we were able to hit that nail on the head,” he recalls. “So many people went there to have fun. That's what waterfronts are for.”
Still, Trace won't claim sole credit for the 1980s SLU-Fairview development boom. “The reason Amazon is there is because Paul Allen is there. Paul Allen is there because Fred Hutch is there.” That was in the late 1980s, with William Justen a prime mover in creating the 15-acre campus for Fred Hutchinson Cancer Research Center. Trace recalls vying with Justen over various properties in the area. “I tried to buy the Seattle Steam Plant back in the day.”
As for Chandler's Cove, Trace says, “I'm not very sentimental about it. Buildings are built to be torn down.” When he and his wife visit the area, they'll eat at Daniel's. And, of course, “I go to Duke's a lot.”
Got a tip? Contact DJC real estate editor Brian Miller at email@example.com or call him at (206) 219-6517.