June 9, 2008

Apartments Up, Deano’s Down

The north end of Seattle’s Central District is seeing big changes, thanks to developer Jim Mueller. Following the successful build out at 22nd & Madison, which gave the north CD both an apartment complex and a Safeway–Starbucks meld, Mueller has set his sights on developing two lots that flank Madison at the same junction. You know the ones — the snaggletoothed strip that includes the now-defunct Deano’s corner market and Club Chocolate City, as well as the former and current homes of the Twilight Exit bar.

Now, Mueller plans to turn the space in to a mixed-use corridor, complete with both retail and living spaces (new apartments! new shops!). Plus, the project at 2051 E. Madison — now home to the Twilight Exit and a nail salon — plans to honor the area’s rich musical heritage. Mueller has engaged Seattle music historian Peter Blecha to help drive that portion of the project, which will focus on the site’s historic significance as the former location of the Mardi Gras Grill, a spot that once hosted some of the hottest names in jazz and R & B.

On the Deano’s side of the street, Mueller and his team are planning another residential/retail mix. Pics of the proposed development are here. After reading Ryan’s recent Sweet Digs post — Apartment Dwellers Staying Put? — I wonder how these new abodes will affect the rental market. Will they fill up quickly, given the observed shortage of rentable living space? Or will they be transmuted into condos? Only time will tell.

If you want to hear Mueller talk turkey about the Deano’s development, take a trip to the corner of East Denny & Madison this Saturday, June 14, at 9 a.m. Mueller will be there to discuss plans over free coffee and donuts.

Double Your Pleasure: Stick around post–discussion-and-donuts to browse the wares offered as part of the Capitol Hill Community Garage Sale. Or, if you’d like to divest yourself of Great Aunt Edna’s gerbil figurines, register at the garage sale site (above) by tomorrow, June 10.

Check out these recent sales in this up-and-coming section of the city.

1802 19th Ave. #210
Sold: May 9, 2008
Price: $369,950
Specs: 1 bath
Square Feet: 827

1628 23rd Ave.
Sold: May 22, 2008
Price: $380,000
Specs: 2 bd/2 bath
Square Feet: 1,190

1602 20th Ave.
Sold: May 30, 2008
Price: $305,000
Specs: 1 bd/1 bath
Square Feet: 780


  • That would be my guess, as well, given Jim's history.

    Just yesterday, at the kickoff of the Capitol Hill Community Garage Sale, Jim talked about his plans for the site; while he didn't go into detail about plans for affordable housing, he did say that he plans to make the Deano's site a "European-style," pedestrian-friendly area, with streetside cafes and shops, which certainly bodes well for property values in the surrounding area, don't you think? And, if not, it a least raises the vicinity's Walk Score, right?
  • I don't know specifics of this particular project. I am going to speculate that part of the development is designated "affordable housing".

    most large developments have to pay fees, taxes, whatever you want to call it in support of affordable housing to get a project approved. some are required to build a certain percentage of affordable housing units.
  • I wasn't aware that the number of rental-to-condo conversions totaled 5,000. That is a huge number to offset.

    If this new construction fills up, as you predict, Michael, I do wonder what the economic makeup of its renters will be. Will they be high-rent places, as you suggest? Or will they be wrapped into the City's proposed Homes within Reach [PDF] program?
  • yes, they will fill up quickly. those units coming online are not enough to make a significant impact on the supply shortage.

    Some conversions are reverting back to apartments. The return on capital or discount rate as a long term rental property is higher than for resale as condos. We are continuing to see quite a bit of institutional multifamily investment.

    New apartment construction to fill the loss of 5000 rental units to condo conversions since 2003 and the reversions of new condos back to aprtments is not enough to meet demand. Expect high rents and low vacancy to continue through the end of 2009.
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