Seattle's downtown retail core needs 'new spark'

You know downtown Seattle's retail scene is hurting when the best thing a local business leader can say is the number of coffee shops and spas increased slightly last year.

"People, this is not enough to get through 2010," Downtown Seattle Association President Kate Joncas told more than 900 people at the group's annual economic forum this month.

With the total number of places to shop in the retail core down 10 percent last year, what it now needs are property owners willing to make upgrades that attract new stores, and streets so enjoyable that people don't mind paying to park, Joncas said in an interview this week.

The retail core — an area of 40-plus blocks between Belltown, Pioneer Square and Interstate 5 — has had to contend with two major forces: a severe recession that caused many chains to close stores or stop expanding, and tougher competition from surrounding suburbs.

While downtown hasn't had a major new retail development since Pacific Place opened in 1998, three local malls — Alderwood, Northgate and Westfield Southcenter — have made room for more shops and restaurants. Across Lake Washington, Bellevue Square underwent a $40 million-plus renovation in 2008, and The Bravern opened last fall with the Northwest's only Neiman Marcus store.

"Bellevue is going to compete with us for luxury retail, and it's kind of inevitable," Joncas said. "Our goal is to make the streets of downtown as nice to walk along as Michigan Avenue" in Chicago.

She described crime downtown as "very low," but said there's a perception that panhandlers are increasingly aggressive about asking for money. She said she's working with the City Council to identify places where panhandlers should not be allowed, such as at ATMs and bus stops, or the doorways of retail establishments.

Currently, panhandlers can be arrested if a police officer sees them yelling at someone for money or otherwise being overly aggressive, she said, but "it shouldn't be OK for someone to trap you at a bus stop and ask you for money."

Before the recession, General Growth Properties, which controls Westlake Center, expressed an interest in renovating the downtown mall. She's hopeful it'll regain interest after an economic recovery takes hold (although General Growth's future was thrown into doubt this week with Simon Property Group's $10 billion hostile bid for the company).

Rainier Square, a mall between Fourth and Fifth avenues, presents another challenge, Joncas said. It's owned by the University of Washington and is long overdue for a makeover. No word yet on when that'll happen, but she's encouraged that UW has assembled a real-estate advisory committee to consider new possibilities for its 11-acre tract downtown, including Rainier Square.

"We need that new development, that new spark," she said.

There are some signs of new life. Gold's Gym will open a 12,000-square-foot fitness center at Rainier Square in mid-April, filling space vacated by a home-décor store and art gallery.

Elsewhere, Old Navy plans to move under the same roof as Gap near Westlake Center, paving the way for a new, three-level Forever 21 store at Sixth Avenue and Pine Street. Forever 21, a Los Angeles-based chain known for trendy-yet-affordable clothing, marks the retail core's biggest fashion coup since European rival H&M arrived in fall 2008. Forever 21 plans a fall opening.

Maria Royer, who worked on the deal as a principal at Real Retail in Seattle, said recent store closures create new opportunities for up-and-coming chains with the financial wherewithal to expand amid economic uncertainty.

Prominent downtown vacancies include an old Coldwater Creek store at the Fifth & Pine building and a former Rite Aid site at the newly renovated Joshua Green Building on Pike Street.

Royer, working on behalf of Fifth & Pine landlord Metzler North America, said she is close to finding a replacement for Coldwater Creek, which pulled out of downtown last month. Although Royer would not name possible tenants, she described interest as "very significant" and said an announcement is likely within a month.

"If retailers are expanding, Seattle is on their radar," she said.

Downtown also remains an attractive destination for such sneaker-clad shoppers as Ruthy Linne, who rode the train Tuesday from her home in Puyallup to King Street Station. Linne, 22, then walked to H&M for a new purse and sweat shirt.

"It's nice to get fresh air while you're walking from store to store," she said. "And I think there's more variety here than at the mall."

— Amy Martinez

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Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com.