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May 25, 2017

Ivar's sells Pier 54 for $39.5M but keep clam: there's a 29-year lease

Seattle Daily Journal of Commerce

Brian Miller

Ivar's has sold its Pier 54 location at 1001 Alaskan Way for $39.5 million, according to King County records.

The buyer was Pier 54 LLC, which is associated with A.F. Gilmore Co. of Los Angeles. The privately held family firm grew from dairy farming in the 1880s into oil and real estate. It has diverse real estate holdings on the West Coast, including the famous Farmers Market in Los Angeles.

Kidder Mathews' Andy Miller, Jason Rosauer and Rob Anderson represented Ivar's in the sale. Gilmore had no broker representation.

Last fall, Ivar's sold its Salmon House property on Northlake for $13.7 million. With that sale, it negotiated a 20-year leaseback agreement, with two five-year options to extend. The same Kidder Mathews team represented Ivar's on that deal.

Ivar's President Bob Donegan said that a similar deal is in place for Pier 54: a 29-year lease for Ivar's Acres of Clams, and 20-year leases for the Fish Bar and a new Kidd Valley that will open in June. Those leases also have options to extend.

Other tenants at Pier 54 include Ye Olde Curiosity Shop, Simply Seattle, a Harley Davidson shop, Cherry Street Coffee and Cupcake Royale. "They all have varying leases of 10 to 15 years," said Donegan.

"We've been here since 1938," said Donegan. "We intend to stay as long as possible."

After leasing space on the pier, Ivar's founder Ivar Haglund bought the property in installments during the 1960s and 1970s. The first major renovation was completed just before his death in 1985.

The next renovation, including a full seismic retrofit, was done while Ivar's and other waterfront businesses were closed during the seawall construction. That work cost $20 million and started in September of 2014. Donegan said, "273 days of closure - that's when we remodeled the pier."

Ivar's now has a 10-year lease for its corporate offices on the west end of the pier.

Donegan said after the viaduct comes down, the number of waterfront visitors is expected to double or triple, so the plan is to expand Acres of Clams into the office space.

"We could extend the restaurant back here," he said, on the view side of the pier. During the last remodel, the kitchen was expanded to allow for a larger restaurant.

Pier 54 - along with piers 55 and 56 - was developed in 1900 as the terminus of the Northern Pacific Railroad. The present size of Pier 54 is about 1.38 acres, according to Kidder Mathews. The main building has 66,250 square feet.

About 22,000 square feet of creative office loft space was created during the recent renovation. Donegan said that some potential tenants are now in negotiations for that vacant space.

And here's a bit more about A.F. Gilmore. It's run by Stan Savage Jr., who Donegan said "grew up here." The Savage family has roots in Rainier Bank and Commerce Bank of Washington.

"Because they own the Farmers Market," Donegan said, "they saw the pier as an attractive heritage project."

Gilmore also once ran a chain of gas stations that extended up the West Coast and into Washington state.

Donegan cites a recent economic study that projects a big upsurge in waterfront visitors from the 5.5 million who were counted in 2014. After the viaduct is gone, he said, the estimate is 11 million to 17.5 million by 2022 or 2023.

"They're impressive numbers," he said. "There's $1 billion investment going on" along the waterfront in anticipation of that increase.

Donegan also estimates that 54 percent of Ivar's business comes during the summer season, roughly June to October. That's why he guarantees that Pier 54's Kidd Valley - a brand that's part of the Ivar's empire - will open in time for summer tourists. "We're getting close. We don't want to miss it."

This will be the first Kidd Valley to serve beer and wine.

No further property sales are planned for Ivar's, said Donegan. "We have a half-dozen other properties, but we'll likely keep them."

© 2017 Seattle Daily Journal of Commerce. All rights reserved.

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