Iconic Smith Tower may become condos

Ninety-three years after Pioneer Square's Smith Tower was built as an elegant business address, its new owner hopes to turn the 38-story landmark into residential condominiums.

Chicago-based Walton Street Capital filed papers with the city Wednesday to begin what could be a months-long process of getting approval to redo the tower as housing.

It seems that living in old buildings is more charming — and practical — than working in them.

The tower's architectural details, such as its terra-cotta façade, Mexican onyx staircase and marble wainscot, would appeal to people who like living in old buildings, said Michael Allmon, Walton Street's local operating partner. He added that the women and men who run the seven brass-and-copper caged elevators would remain, as would the building's ornate Chinese Room, popular for weddings and public events.

The proposed change is a way to ensure that the tower remains a vibrant part of downtown Seattle, Allmon said.

"It's what we don't plan to do with it that's key," Allmon said. "We want to embrace and enhance the historical fabric of the building."

The 260,000-square-foot building holds landmark status with the city and cannot be substantially altered without permission. The exterior falls under the control of the Pioneer Square Preservation Board; the interior under the city's Landmarks Board. The proposed change was filed with the city's Department of Planning and Development.

Condominiums in new downtown high-rises are selling for $700 a square foot and up. At that price, a 500-square-foot unit would cost $350,000.

But it's too early to gauge the Smith Tower's potential appeal to buyers. The number and size of units has not been determined, nor the prices.

Matthew Gardner, principal in the Seattle-based land-use economics firm Gardner Johnson, said Smith Tower's conversion "could be incredible."

"The building itself is iconic, so it does make sense to go down this road."

Gardner also said the switch would benefit Pioneer Square by bringing more residents into the neighborhood.

Smith Tower has struggled a bit to attract and retain business tenants as more modern office towers emerged in recent decades.

"The building itself was never ideally suited to a modern, commercial office-type tenant," said Kevin Daniels, president of Nitze-Stagen, a private commercial-property investment firm.

The floor space in the upper stories is too small — just 2,000 square feet — and the spaces on the lower levels are either too cut up or too big.

Smith Tower's occupancy rate was up to 90 percent last year, from 75 percent a decade earlier. But that could reverse itself with the reported departure of two of its largest tenants.

Providence Health & Services will relocate about 200 employees to office space it recently bought in Renton. And the Disney Internet Group will move to a building in downtown Seattle, according to reports in the local business press.

Allmon declined to discuss individual tenants, but he did say that the reported departures got Walton Street thinking about changing the building's function.

"We bought it, frankly, as an office building, and it wasn't until we found out we would lose the two largest tenants in the building that we really looked carefully at what our options were," Allmon said. "We've just become excited about the possibility of changing its use.

"It's important that all possible current and future uses be explored in the preservation of this iconic tower," he added.

Walton Street became the historic building's 20th owner last year when it made an unsolicited bid, snapping up Smith Tower and an adjacent two-story building for $48 million. Its previous owner, the Samis Foundation, paid $7.47 million at a liquidation sale a decade earlier, then spent $28 million on renovations in the late 1990s.

Allmon believes a condominium-ized Smith Tower would have little trouble competing with the dozen or so swank condo developments under construction in downtown Seattle.

"I think this really is a category unto itself," he said.

When the tower opened in 1914 at the corner of Second Avenue and Yesler Way, typewriter tycoon Lyman Cornelius Smith spared few expenses. Fireproofing was a major concern, so Smith went as far as to paint and carve metal window frames to give the appearance of fine mahogany.

Downtown Seattle has seen relatively few landmark buildings readapted for residential use. The Cobb Building on Fourth Avenue, long made up of medical and dental offices, reopened last year with luxury apartments.

In 2001 the Seaboard Building, which formerly housed Nordstrom corporate offices at Fourth Avenue and Pike Street, went condo.

Daniels, of Nitze-Stagen, said Pioneer Square has a real need for market-rate housing. Converting Smith Tower to residential condos "could be positive depending on how the building's historic preservation element is dealt with," he said.

It might also improve the historic area's reputation, which Daniels says is undeserved.

"If you look at the demographics and crime facts, you'll find Belltown actually has more crime."

Allmon says he's seeking the input of city officials and historic preservationists. "It's a great building, and we're really very excited about having this conversation with the city."

However, the transformation could meet with sadness from current tenants.

"You're kidding," said Robbie Cape, CEO of Cozi, a software company that occupies about 4,000 square feet on the seventh floor, upon learning about Walton Street's proposal. Cape said he "adores" Smith Tower. "It's a bright, bright place, and it increases morale."

Cape said Cozi's lease at Smith Tower runs through spring 2009, but if Walton Street "wanted to buy us out of our lease and make it worth our while, we'd move."

Walton Street is in the process of converting portions of two office buildings in Chicago to residences, Allmon said.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com