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Real Estate Editor
May 20, 2021
An iconic presence in Pioneer Square for well over a century, the original Seattle Steam plant at 619 - 633 Post Ave. is bound for closure and sale. Update: Ross Klinger at Kidder Mathews says that firm will offer the property. It's the smaller of two sister plants downtown. A few blocks north, the larger, newer plant at 1319 Western Ave. — on both sides of that street — supplies almost all the company's steam heat. That will remain in use under current ownership.
The original Post Avenue plant now has one old gas boiler, used for backup (as recently as this past winter), plus that familiar smokestack. It's also a shop and warehouse with lots of raw space. It sits on nearly half an acre, slightly north of Yesler Way, and extends to Western. It's also the DJC's immediate neighbor, and heats our building.
The company's Clarence Clipper said, “We're definitely moving out. We need to be out by the fall of 2022. It's not just a rumor.” The plan is to add a new boiler to the north plant (replacing the south plant's backup capacity), then decommission and remove the circa 1965 boiler from the south plant on Post. Clipper is in charge of operations, not the building's sale; that responsibility lies with the ownership … which is about to get more complicated.
Following a 2014 sale, Seattle Steam became Enwave. That company announced in February that it would be sold (for a reported $4 billion), so the disposition of underutilized real estate isn't a surprise. The company sale is expected to close in the second quarter of this year. Brookfield Asset Management of Toronto is selling the company in Canadian and American chunks.
The U.S. division will be owned by a venture of Ullico, an insurance company, and the state-owned Australian asset manager QIC. As part of the sale and reorganization, the new owners announced last month that Enwave will become CenTrio.
Seattle Steam was founded circa 1893 with the original one-story building at 619 Post, aka Old Post Station. The larger and more recognizable three-story building at 633 Post is New Post Station, which followed during the next decade or so. Both are in the Pioneer Square Preservation District, and any adaptive reuse would have to be cleared with the district board. There's no chance that the smokestack would be removed.
The complex has about 44,067 square feet in its present configuration. It's on the city's list of unreinforced masonry buildings (URMs), categorized as “high risk.” During the 2001 Nisqually earthquake, the old smokestack swayed and nearly collapsed onto the DJC building. It was repaired and reinforced. “It's still a functioning stack,” says Clipper. “The facade and the stack are landmarked.”
Also, as one might expect, the property is polluted and still awaiting cleanup, per the state Department of Ecology. Underground oil tanks remain in place, though natural gas now fires the boiler when in use. The last soil and water testing was in the late 1990s, and no remediation plan has been prepared by the seller. A colleague who's toured the plant says it has asbestos on its upper levels.
Some of that has been abated. “There's still some stuff that's been identified,” says Clipper. Regarding that and underground tanks, “We're doing some studies. A lot of that stuff was left in place,” as was the norm during Seattle's dirty industrial past.
Assuming the seller is responsible for removing the boiler, asbestos, underground tanks and contaminated soils, the buyer would then assume the cost for a seismic retrofit to allow adaptive reuse for the complex. After that, an overhaul for lab or office space seems more likely than residential use. (Or maybe a brew pub? That's Clipper's notion.)
The city lists the 633 Post ceiling heights at 18 feet, though century-old building records are notoriously vague. More floors and/or mezzanines could be added. The older south 619 Post portion of the complex does not appear to be in great condition; and the preservation board occasionally allows the removal of such vestigial structures. Do that, and you might have room for an atrium-style addition to the north 633 Post portion of the plant — the one that people recognize and often photograph for Instagram and Pinterest.
Unlike the larger landmarked former Seattle City Light Steam Plant on Lake Union, whose 106,000 square feet are leased to Fred Hutchinson Cancer Research Center, the Post Avenue plant has fewer floors and windows. South of downtown, the old Georgetown Steam Plant may become a combination events space and museum, with its equipment left intact. That building will remain under city ownership, with a private operator.
Nationally, there are only a few examples of decommissioned old steam plants being repurposed. In Toledo, HKS added mezzanines and other features to organize a cavernous old building into the very modern headquarters for ProMedica. At Amherst College, in Massachusetts, Bruner/Cott & Associates turned a much smaller old coal-fired plant into a boutique events space.
QIC has about $65 billion in assets under management, with U.S. offices in San Francisco and Washington, D.C. QIC is the investment corporation for the state of Queensland. It's also something of a specialist in alternative assets, including energy.
QICs' Ross Israel said in February of the pending deal, “We are delighted that our team has been successful in its bid to secure such a high-quality core infrastructure asset. Our thematic-based investment strategy has highlighted strengthening trends in distributed energy and sustainability.” CenTrio's future network will extend to eight U.S. cities with over 400 buildings/customers served.
Ullico insures and invests on behalf of union-related entities. It has an infrastructure fund with about $3.3 billion invested.
Clipper has been told the deal is expected to close at the end of July, when a formal announcement is expected.
In Seattle, CenTrio will continue to provide heat for over 200 customers from downtown to First Hill. Its network of pipes spans about 18 miles. Like most companies founded after the Great Seattle Fire, and before the Yukon Gold Rush, Seattle Steam has a long, complicated history — including several sales and mergers. The firm was established soon after the fire by James D. Lowman, the namesake for several buildings in Pioneer Square. The company was later folded into national utilities provider Stone & Webster. It was sold back into local hands in the 1960s.
Coal and oil powered Seattle Steam's operations until 1952, when natural gas was added and coal discontinued. A biomass boiler was added to the north facility, on Western, in 2009. (That plant began service in the 1930s.) The company also ground leases the land beneath the Cyrene apartments, right next to the Western plant.
Between now and the fall of 2022, about 18 months away, Clipper and CenTrio need to permit and install the new north boiler on Western, and simultaneously remove the old south boiler and clean out that complex on Post. (Some staff and operations will move to SoDo.) And the company will change hands in the meantime. “We're still in the transition,” says Clipper. “Brookfield still owns us. The business itself is doing fine. There's a lot going on.”
He adds, “We will still have a presence” on Post, but that presence will be subterranean — i.e. the network of steam pipes that will remain beneath the old complex. “It's a great facility. It could be repurposed. We hate to see it go.”
The south plant last traded for $17.9 million, as part of the 2014 Enwave deal. The county now values it for about half that amount. But you can't put a price on charm. And if a future buyer should step forward to transform the old complex into something new, we have a pretty good idea who will provide the heat.
Got a tip? Contact DJC real estate editor Brian Miller at firstname.lastname@example.org or call him at (206) 219-6517.