Safeguard a Seattle icon

Seattle's Olympic Hotel, the oldest remaining building in the University of Washington Metropolitan Tract, continued its meandering trek through history this month. On Aug. 1, management of the hotel passed to the Fairmont Hotels & Resorts group of Toronto, Canada.

What do we know about this young, rapidly growing chain? More importantly, what do they know about one of Seattle's icons?

In 1861, the Denny, Terry and Lander families donated a 10-acre site for a new university. In 1895, the UW relocated its main campus to the present 583-acre Montlake site and the Board of Regents debated selling the downtown tract (it was listed for $250,000) or possibly developing a park.

Fortunately for Seattle, the regents retained ownership. In December 1924, the "grand dame" began a brief reign as Seattle's finest hotel and the center of social life. Tradition was born and an icon was in the making.

Beginning with Herbert Hoover, every U.S. president has occupied the presidential suite. However, the Depression took its toll, and the operator of the hotel, like many in the period, went into bankruptcy. An era had ended.

In 1953, the UW regents made two significant decisions. They agreed to demolish the aging Metropolitan Theatre, around which the Olympic was wrapped, and approved a new 100-year ground lease.

The new operator was the Western Hotel, later the Westin chain, which in 1979 sold its interest to JMB Realty of Chicago. JMB Realty entered into a management contract with the Four Seasons Hotels group. After two years of renovations, the hotel secured an AAA Five Diamond rating, which to this day is the only one in the Pacific Northwest.

Last year, JMB Realty attempted to break the management agreement with the Four Seasons and sought bids for the ownership of the building for 37 more years. Despite a competing bid from a group of local investors, which included the Four Seasons, JMB entered into a sales agreement with a real-estate investment trust and the Fairmont Hotels chain at the end of last year. Thus ended the second great period for the grand dame.

Under the stewardship of the Four Seasons, old traditions had been maintained and new ones begun. Former general managers Peter Martin and Brian Flaherty had recognized that in order to be successful, they had to become involved in the community. Equally important, they maintained a Five Diamond rating, which helped ensure that national clients would include Seattle in their travel plans.

Like the Four Seasons, the Fairmont is a management company. Today the Fairmont Hotels chain includes 15 properties in the United States, 21 in Canada, and six in the Caribbean and Mexico.

Fairmont's decision to ask Dennis Clark to become the general manager of the new Fairmont Olympic Hotel shows promise. Clark is an experienced operator with family ties to Puget Sound. To his credit, the Fairmont has retained most staff and ensured that all received length-of-service credit.

However, it appears from its Web site that the Fairmont has only one other "Five Diamond" property in its stable, the Fairmont Scottsdale Princess. Other rated properties have been given three or four stars.

In an economic environment such as today, where occupancy rates are far below normal trends, most operators will attempt to reduce expenditures and/or take market share from competitors with lower room rates.

In addition, the natural tendency will be to withdraw from the many community commitments begun by the Four Seasons. This would be a mistake. Seattle is a very giving community and in order to maintain the hotel's preeminent position, much less a premier rating, the new management team must realize that these activities go with the turf, in good times and bad.

These issues bring us back to the university regents and their role. They must realize that the Olympic is Seattle's core icon and that its revitalized grand-dame status and five-star rating must be retained. Lose either of these and we, and subsequent generations, will suffer.

Under the terms of the Four Seasons management agreement, the hotel operators had to report to UW Board of Regents on an annual basis. Thus far, the regents have decided not to publicize these reports, possibly because they are simply financial summaries. However the regents, or their metropolitan tract committee, now have the opportunity not only to review financial results, but to set some operating standards, ensure future capital commitments are made, and most importantly to report on an annual basis to the citizens of our city.

A set of standards would demonstrate a commitment to a vision. The regents might consider asking a few well-intentioned citizens, free from conflict, to help draft operating standards for the grand dame and report to the university and the community at large on an annual basis.

This may appear a bit radical. It's a new concept, and probably hasn't been tried before. But then, most everything about the metropolitan tract and the Olympic Hotel is unique. Had a similar strategy been pursued with many other urban icons in the U.S., they would not find themselves in their current state of disarray.

Mike Kunath is a principal in the Seattle-based investment management firm of Kunath Karren Rinne & Atkin and an active participant in the community. He was a member of the local investor group that bid on ownership of the Olympic Hotel.

The Olympic Hotel is not the oldest remaining building in the University of Washington Metropolitan Tract, as stated in the Aug. 13 guest commentary, "Safeguard Seattle icon." The Cobb Building is.