Dr. Tami Meraglia, owner of the Vitality MediSpa, recently had to move her entire business in the span of days to avoid a rent increase.
The ownership of the building (1501 Queen Anne Ave. N.) changed hands. and with it, rents were expected to go up. Meraglia had been in the space for six years.
Seattle-based Cadence Real Estate purchased the building in mid-September. Rent increases haven’t been officially set yet, principal Chris Garvin said, but the company does plan to increase rents to keep up with market values.
Meraglia wanted to stay, but the new proposed rent was $3,000 more than her previous $10,000-a-month rent, and she’d lose her parking, she said.
Meraglia said she requested to stay on her month-to-month lease until Jan. 1, 2014, so she could have time to prepare for the move. Cadence never received a counter-offer, Garvin said. No matter the story, rents were going up, and Meraglia decided to move. In three days, she moved a 6,000-square-foot clinic to a 4,000-square-foot space.
These rent increases aren’t just affecting Meraglia. Like the Queen Anne & Magnolia News reported in July, renters at the Gilbert House (1529 Queen Anne Ave. N.) faced increases up to 50 percent when their building was sold to an out-of-state company.
And it’s happening all over Queen Anne for businesses and renters, said Martin Kaplan, chair of the Land Use Review Committee (LURC) for the Queen Anne Community Council (QACC).
A problematic shift
With cranes building new multi-family buildings and rents going up in the existing buildings, “many of us think it’s getting overbuilt and then it will swing the other way,” Kaplan said.
There’s a land grab in Seattle, Kaplan said. With building prices on the upswing, businesses are paying a lot of money to buy the buildings and raising rent as a result, he said.
This change is likely spurred in part by local real estate companies making up for losses incurred during the recession, said Queen Anne Chamber president Connor Haffey; that increase is affecting the business community, which is vital to the neighborhood.
“Part of what we love so much about the Queen Anne neighborhood and the top of the hill is it’s mom-and-pop [businesses],” Haffey said. “It’s not a place for Walmart. It’s a place for Three Birds [Home and Gifts], Charley + May, Chocopolis — those types of businesses.”
There are two problems with this shift, according to Kaplan: When rents go up, people will less likely spend their income on shopping or eating out. Also, people are moving out of Queen Anne to live in other, cheaper neighborhoods.
“Those people moved out, and if it takes a long time for that unit to get somebody else, I think it could be problematic,” he said. “We’ll have to see how it plays out.”
Many businesses, like Cadence, say it’s just keeping up with market rate. That may very well be true, Kaplan said, but no one establishes the market rate. Kaplan predicts the bubble may burst in the next few years.
Focusing on small businesses
The Ave in Queen Anne is the “anchor of our community,” Kaplan said; small businesses being forced to leave the Ave is terrible in such a great neighborhood.
“We all go there to shop and eat,” he said. “All of a sudden, a business goes away on a fairly important corner, and nobody else [moves in]. Nobody likes to see vacant stores.”
This is a game-changer, Kaplan said. Through his work at QACC and LURC, Kaplan and others are trying to influence small businesses to be the central focus of the Queen Anne neighborhood. The groups have been able to influence the designs of bigger businesses that move into the area, like Safeway, Trader Joe’s and Bartell Drugs to reflect the architecture of the neighborhood and to create spaces for smaller businesses.
“In the future, that is the real commitment from [us],” he said, “to really influence small business to come thrive in our community.”
Meraglia expects her new location (1503 Second Ave. W.) to continue to thrive; in fact, she said the move was a blessing in disguise. Queen Anne feels like home more than her own neighborhood in West Seattle, she said, and with 80 percent of her patients coming from Queen Anne, she couldn’t leave.
“I didn’t want to abandon them,” she said of her patients. “Our business really focuses on relationships, and it would be horrible [to move out of the area].”
The decision to move wasn’t without its challenges, though. Meraglia said her heart did “anxiety flip-flops” every night as she laid in bed, trying to figure out what to do.
“It’s sad because I’m not the only person that this is happening to,” she said. “I feel like I’ve been given a blessing through this experience, [but] it’s an unfriendly experience. Queen Anne is a village. I don’t want to change the flavor of Queen Anne.”
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