Proposal For F&N Site Tailored For Nordstrom -- Retailer Is Still Taking A Cautious Approach
Two prominent national real-estate developers who helped redevelop the Four Seasons Olympic Hotel have presented a proposal to put Nordstrom in the Frederick & Nelson building between Fifth and Sixth avenues at Pine Street.
The proposal by Seattle investor Jeffrey Rhodes and Chicago developer Thomas Klutznick calls for the entire, 10-story building to be occupied by Nordstrom's flagship store and corporate offices. Nordstrom's current store, at Fifth Avenue and Pine Street, which is made up of a patchwork of several buildings, would be redeveloped for other retail business.
Nordstrom confirmed that it is talking with Rhodes, despite the retailer's failed attempts to make a deal with F&N's owners in the past.
Dave Mackie, Nordstrom's vice president for real estate, warned against making too much out of the discussions.
"We've been sort of sitting on the sidelines and seeing if (Rhodes) and his partners could make anything happen with the owner of the building," Mackie said.
But, he added, "the issues are still the same. While we would very much like a bigger store, it would have to be something we could afford. To date, F&N hasn't met that criteria."
The F&N building is the size Nordstrom wants, Mackie said. It's large enough to accommodate the store and house close to 400,000 square feet of Nordstrom corporate and store offices that are now scattered in five downtown buildings.
The latest proposal is one of several that have been made for the F&N building but it is by far the most encompassing. It also calls for redeveloping the Systems Garage on Sixth Avenue across the street from F&N, putting in a coffee house, possibly for Starbucks.
Rhodes and Klutznick declined to give development costs. Local sources estimate a redo of the F&N building could cost at least $70 million for a tenant such as Nordstrom. The proposal is one of at least three now being considered by Don Padelford, who owns the F&N property along with other family members.
Padelford reportedly is asking $20 million to $30 million for the property. Renovation will be expensive, appraisers say, because there is some asbestos to be considered and an estimated $2 million worth of seismic strengthening is probable.
Steven Wood, the real-estate consultant representing Padelford, declined to comment on the proposals or on the progress of discussions on the property. The site has been vacant since F&N closed in June 1992.
Both Rhodes and Klutznick are experienced in urban and resort development. Most recently, they were affiliated with Miller-Klutznick-Davis-Gray Co., a real-estate-investment firm that, by the time it disbanded in the late 1980s, had amassed real-estate property - including office buildings, well-known resorts, such as Aspen Ski Co. and the Pebble Beach golf course, mixed-use developments, hotels and other properties - reportedly worth more than $1.5 billion.
Klutznik was a managing partner of the Miller group; Rhodes was president.
Before the Miller group, Klutznick was chairman and chief executive officer, and Rhodes was chief financial officer, of Chicago-based Urban Investment and Development Co., a major urban-real-estate-developer formerly owned by Aetna Life & Casualty. It was when Rhodes and Klutznick were with UIDC that they were involved in the Four Seasons Olympic renovation. The pair left after UIDC was sold to JMB Realty Corp. in 1984.
Rhodes, who recently moved to Seattle, believes his proposal could help inject new life into the city's retail core. A new flagship Nordstrom store would attract other retailers to downtown, he believes.
"They could build a world-class store in the Frederick & Nelson building," Rhodes said. Such a store "will be the proper anchor that will make the rest of downtown happen the way the people of Seattle want it to happen."
Nordstrom has had a long relationship with Rhodes' and Klutznick's groups. UIDC developed numerous centers anchored by Nordstrom stores, alone and in partnership with other developers.
The firm is better known nationally for investments such as Chicago's Water Tower Place, whose tenants included Marshall Field, Lord & Taylor, a Ritz Carlton hotel and office and shops occupying between 300,000 and 400,000 square feet.
Another Chicago development was 900 North Michigan, a 65-story mixed-use project including a Bloomingdale's store, a Four Seasons Hotel, offices and apartments.
Copyright (c) 1994 Seattle Times Company, All Rights Reserved.