City's downtown shopping district has come back from the dead

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Shoppers jam the sidewalks. Traffic fills the streets. A lone protester shouts to passing cars, while a guitarist and violinist play classical music near the entrance to bustling Pacific Place.

It's the corner of Sixth Avenue and Pine Street in Seattle, a few years ago the symbol of a dying downtown, where stores were shuttered and panhandlers seemed to outnumber shoppers.

Now the stores, crowds and street life are back. Business is flourishing, with the retail core's vacancy rate under 2 percent.

New retailers such as Tommy Hilfiger and Furla, the Italian handbag company, are moving in and some older retailers, such as Nordstrom and Gap, have moved to bigger and better sites.

But a cloud hangs over downtown's rapid retail resurgence.

A slowing national economy and declining stock market, the local dot-com crash and Boeing's recent decision to move its corporate headquarters out of Seattle have some retailers worried.

"We are optimistic, but at the same time, there is some uncertainty," said Lynn Beck, marketing manager for Pacific Place, the 2-½-year-old shopping center across from Nordstrom that has been credited with helping spark downtown's revival.

Overall sales at Pacific Place dropped in February compared with the same month last year. Beck said, declining to provide specific numbers.

A number of other major downtown retailers contacted also declined to release sales figures. But some national chains with stores in downtown Seattle - such as Nordstrom and Gap (which also owns Old Navy and Banana Republic) - have reported declining sales at stores open a year or more.

"There's going to be a bit of a retail shakeout if we have any type of prolonged economic downturn," said George Rolfe, director of the University of Washington's urban-design program and an expert in downtown development. "There are going to be some vacant stores."

There already have been, as retailers such as the downtown Disney Store and J. Peterman have shut down. But at this point, they're being described as part of the normal turnover in the volatile retail business and not a sign of imminent danger.

"When space becomes available in downtown Seattle, it's in high demand. But retailers are more cautious," said Susan Zimmerman, a retail specialist for Kidder Mathews & Segner, a commercial real-estate company.

Seattle Mayor Paul Schell said that's no cause for alarm.

"We weren't going at a pace that was sustainable long-term," he said. "So some slowdown was inevitable."

Strength in numbers

Memories of downtown's dramatic downfall a decade ago are still vivid for many, which is why talk of a recession can be so unsettling.

Zimmerman was the leasing agent for the elegant white-marble building at Sixth and Pine that housed the I. Magnin apparel store for nearly a half-century.

It closed in 1993 and soon was decorated with graffiti and the big display windows were covered with plywood.

Zimmerman recalls the feeling of hope that came with the opening of Westlake Center in 1988.

"But by 1992, things were like `Whoa,'" she said. That was the year the financially troubled Frederick & Nelson department store at Sixth and Pine closed.

If there is a recession today, downtown Seattle's retail core, now considered one of the nation's healthiest, is in much better shape to weather it than it was 10 years ago, downtown experts said. That's because:

• A critical mass has been achieved in which the number of stores and shoppers attract even more stores and shoppers. Gone are the days when people - and retailers - were afraid to come downtown because of the perception of high crime, vacant storefronts and difficulty parking.

• A boom in office, residential and hotel construction is bringing tens of thousands of new shoppers downtown to live, work and play. The downtown residential population, which had hovered around 10,000 between 1970 and 1990, doubled in the past decade to about 20,000 and is expected to shoot up by another 10,000 by 2010. More than 160,000 people work downtown, and there are about 8,500 hotel rooms.

• Seattle's downtown can fall a long way and still be better off than many other big cities, where downtown shopping areas limp along with 10 percent or more of their retail space vacant. Ironically, because of the high demand and high rents in downtown Seattle, some retailers are being forced to settle in the suburbs, where for decades they had fled at downtown's expense.

• Many of the vacant locations downtown are being snapped up, and rents are remaining stable, if widely varied, from about $35 to more than $100 a square foot a year.

That compares with an average of about $17 to $23 a square foot in a typical neighborhood strip mall in the Puget Sound region, according to Dan Durr of First Western Properties in Tacoma. The bigger, closer-in malls, such as Southcenter, Northgate and Alderwood Mall, however, can get $20 to $50 a square foot, while Bellevue Square rents run from about $50 to $80 a square foot, according to Jeff Veraldo, a retail expert for CB Richard Ellis, a commercial real-estate company.

The bottom line is that downtown is back, to the tune of more than $500 million a year in retail sales.

Most people say downtown's recent resurgence can be traced to Nordstrom announcing in 1995 that it would move across Fifth Avenue into the vacant Frederick & Nelson store.

Plans for Pacific Place and its 1,200-space underground parking garage across Sixth Avenue from Nordstrom came next. The square-block complex of stores, restaurants and movie theaters is owned by Pine Street Development, headed by Matt Griffin.

A report by the city's finance department showed retail sales downtown rose about 8 percent in the six-month period immediately after the opening of Pacific Place in October 1998, generating an additional $36 million in sales and $306,000 in sales taxes. The new Nordstrom flagship also had opened earlier that year.

Downtown's hot streak shouldn't make retailers complacent about promoting themselves, said Downtown Seattle Association's marketing director, Sylvia McDaniel.

"We have to maintain our success," she said. "It's harder to get it going than to keep it going."

From his small jewelry store across Pine Street from the downtown Nordstrom, Philip Monroe has had a front-row seat to the changes in downtown Seattle for the past 35 years.

He was there when suburban malls were just starting to sprout and lure shoppers from downtown, and sadly watched the slow decline as one downtown store after another closed.

But Monroe hung on, even when his street was nearly deserted in the early 1990s after Frederick & Nelson and I. Magnin closed.

"There was no one. That was a very uncomfortable feeling," Monroe said.

He can't believe how quickly things have changed. The crowds he sees downtown now remind him of how it used to be in the old days during the Christmas holiday season.

"Now it feels like (Christmas) all the time," Monroe said.

Scott Renwick opened his Pine Street Coffee cart across the street from the entrance to Pacific Place in November 1999. Since then, he has seen sales soar from about 25 drinks a day to about 175.

"The market is continuing to grow," he said, undaunted by the countless other baristas in the downtown area.

Big moves on Pine

The downtown shopping district generally is considered to be concentrated in a 16-block area framed by Olive Way and University Street, Third and Seventh avenues.

To the Downtown Seattle Association, the official "retail core" spreads south into the financial district and covers about 50 blocks, between Lenora and Columbia streets, Third Avenue and Interstate 5. This area is one of several downtown neighborhoods, including Pioneer Square, the waterfront, Denny Triangle and what's called First-Second, that comprise a self-taxing Metropolitan Improvement District the downtown association helped form in 1999.

The district raises about $3 million a year from property owners to promote, clean up and help keep downtown safe. Its most visible presence are the 35 "Downtown Safety Ambassadors" who staff a sophisticated block-watch program in the 225-block district.

But the heart of downtown retail always has been Pine Street, where the major department stores, from The Bon to Nordstrom, lined up. Old Navy has moved into the former I. Magnin space, and Gap moved into one of the most visible downtown spots, the southeast corner of Fifth and Pine, a week ago.

The San Francisco-based retailer said it wanted more space so it could feature all four of its lines - clothes for adults, kids and babies, and body products such as scented lotions and soaps.

The relocation from its old store at Fourth and Pine didn't make big headlines. But it was steeped in symbolism.

The Gap moved into the former site of teen-apparel specialist Jay Jacobs, a retailer that, like Nordstrom, began in downtown Seattle and spread across the nation.

Unlike Nordstrom, Jay Jacobs went bankrupt in 1999, a victim of competition from chains such as the Gap. Its Pine Street store had survived the downturn of downtown, only to close up just as things were turning around.

Flanking Gap and Nordstrom on Pine Street are two vertical malls, Westlake Center and Pacific Place. Westlake, a Monorail terminus, draws large tourist and office lunch crowds with an eclectic mix of shops ranging from Made In Washington to the Galleries of Neiman Marcus, while Pacific Place boasts such upscale retailers as Cartier and Tiffany. The two centers complement each other well, noted local retail analysts Pat Johnson and Dick Outcalt.

Heading south along the Fifth Avenue spine to University Street is Rainier Square, downtown's first modern indoor mall, which opened in 1978. The nearby City Centre mall opened in 1989.

It's this combination of urban malls and old-fashioned street-front stores that makes downtown so appealing, say urban planners and shoppers.

"I wouldn't bother going to an ordinary mall. I'd stay in Sequim then," said Cindy Caldicott, who made a trip from her home on the Olympic Peninsula to downtown Seattle recently, where she was shopping at Westlake Center.

Outside on Pine Street, the sidewalks were alive with the sights and sounds of urban life - panhandlers, skateboarders and musicians.

At the entrance to Pacific Place, violinist Pasquale Santos and guitarist Bob Gronenthal were entertaining a half-dozen onlookers.

They first started playing downtown 20 years ago, but took a 10-year break when downtown began to slide. They returned in September with Santos' English bulldog, Mack Daddy.

"Downtown is vibrant," Santos said. "It's happening and that's the reason we're back."

Bill Kossen can be reached at 206-464-2331 or Gina Kim can be reached at 206-464-2761 or