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Nike’s exit shows just how far downtown Seattle is from a comeback

By Paul Roberts, The Seattle Times
Published: January 30, 2023, 6:00am

Just before noon last Friday, a crowd gathered quietly on the corner of Sixth Avenue and Pike Street, waiting to pay their last respects to the downtown Seattle Nike store before it closed for good.

“I’m heartbroken,” said Richard Green, who had come up from Tacoma and who, despite being entirely outfitted in Nike (including, he attested, underwear and socks), was nowhere near done with the brand. “I had big plans for this year,” he continued, nodding through the glass at the racks of shoes and other merch.

“Pretty bummed,” added Jacob Boaz of West Seattle. Boaz said he shopped the downtown store “every week at a minimum” and was dismayed at the prospect of going all the way to Bellevue Square, where a new Nike store will open sometime this year. “It’ll take me over an hour to get there.”

Green and Boaz aren’t the only ones bumming at Nike’s departure. The store has been a major presence through much of downtown’s modern, tumultuous history. Its exit sounds an ominous note for a downtown that hasn’t been able to catch its stride since the pandemic.

Even as other city neighborhoods seem more than recovered from the pandemic, downtown’s journey back has been decidedly mixed. While areas like South Lake Union and Pike Place Market bustle with almost pre-COVID-19 crowds, parts of downtown can still sometimes feel like the set for a zombie film, with sparse crowds, vacant storefronts and, lately, a lot of downbeat news.

Just days after news broke of Nike’s departure, word came that the Regal Meridian 16 theater on the same block was closing its doors and Amazon confirmed that it was pulling out of a massive tower near its headquarters. The week before, Facebook said it was leaving its offices at the six-story Arbor Block 333, on Eighth Avenue North.

“Downtown is a mixed bag,” said Jeffrey Rosen, a commercial real estate broker at Seattle Pacific Realty who specializes in retail. “There’s some recovery going on — and there’s some folding up and going away going on as well.”

Nike hasn’t shared its reasons for departing downtown, where it has been a retail pillar for more than 26 years. Local wags blame now-familiar culprits, among them COVID, lack of downtown parking and, especially, street crime. And to be sure, Friday’s crowds were watched over by a clutch of security guards.

Yet to hear some of the puzzled Nike die-hards at the store Friday, the location was still more than capable of drawing crowds. “This place always has a line outside of it,” said Boaz. “Always.”

Of course, there were bigger crowds when Nike opened the store as NikeTown, to great fanfare, in 1996. Back then, its still-novel concept of “experiential” retail, aka “shopping as theater,” was hailed as a key to reviving retail generally — and downtown Seattle’s retail core in particular.

With early success came setbacks. The downtown Nike store had its windows smashed during May Day violence in 2012 — Nike was seen as a villain of globalization — and was boarded up during the George Floyd protests in 2020. And, like other retailers downtown and elsewhere, the store has seen its share of shoplifting, staff say.

Yet today, the Nike brand is thriving, thanks in no small part to its 257 retail, clearance and factory stores. (Examples of the latter can be found in Tulalip, Factoria and North Bend.)

By contrast, downtown Seattle’s story since the mid-1990s is decidedly more mixed.

The area has come a long way back from the early pandemic shutdown. As of late 2021, the Downtown Seattle Association estimated that more than 300 new street-level business had opened downtown since March 2020, including marquee retailers like Uniqlo and PCC Community Market (which positively booms at lunch).

Reports of crimes such as robbery, assault, rape and burglary were down in 2022 versus 2021, while homicides remained the same, according to the Seattle Police Department dashboard data through November. The number of tent encampments has fallen, says Jon Scholes, president and CEO of the downtown association. “There’s still work to be done,” Scholes added. “But we’re headed in the right direction, certainly.”

But, clearly, downtown has a long way to go. Many of the challenges that preceded COVID, such as shoplifting and competition from online retailers and brick-and-mortar stores at regional malls, are the same or worse. Even a 2022 holiday season largely free of COVID restrictions wasn’t enough to reinvigorate retail icons like Nordstrom, whose downtown flagship store was less than full and “still showing the effects of the slowdown,” said Rosen.

As of 2021, roughly 500 downtown street-level businesses had closed since the pandemic started, according to the downtown association, and that’s likely increased since. And many storefronts remain empty. Retail vacancy in downtown’s central business district is now around 13.5%, up from less than 2% in 2019, according to Damian Sevilla, who specializes in Seattle-area retail sales and leasing for First Western Properties.

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And that statistic doesn’t include the spaces where business owners are still paying rent but aren’t actually operating, Sevilla said. “They’re just dark.”

(Retail vacancy in downtown Bellevue, by contrast, went from around 5% in 2019 to around 1.5% today, Sevilla says.)

Seattle’s empty shops have a snowballing effect on downtown traffic: As more stores close, shoppers have fewer reasons to come downtown.

“A lot of the retailers that I have previously come to downtown for have … left,” says Tim McCall of the Puyallup area, who was in the Nike store Friday. “So the draw for me to come downtown is slowly waning.”

Many local retail executives think downtown still has powerful charms that can’t be found anywhere else. Pike Place Market, the waterfront and the Space Needle “aren’t going anywhere,” says EJ Reiser, manager at The North Face, which sits across Sixth Avenue from Nike.

Reiser thinks the high-end shoe store has, or had, one of the choicest retail locations in the city. “They’re making a mistake,” he says of the closure. “I mean, without knowing the ins and outs of it, it’s crazy that they’re moving.”

That bullishness on downtown Seattle is shared by many retail experts, with some big caveats.

Downtown needs to attract more “experiential” retailers that can give shoppers a better reason to step away from their screens and come downtown. “It’s going to have to be some kind of destination-entertainment tenant, versus just soft goods, apparel,” says Sevilla.

More important, downtown Seattle needs to regain office workers who “would buy things on their way to or from work, or on their lunch breaks,” but are now working mostly remotely, says Neil Saunders, a retail analyst and managing director at GlobalData.

Since last summer, however, offices in downtown Seattle have averaged just 42% of the workers they had pre-pandemic, according to data posted by the downtown association. Without the “pop,” or population, of more office workers, Sevilla says, rebuilding downtown’s critical mass of retailers will be hard.

“Retailers can’t just survive on lunch traffic alone,” he says. “They’ve got to have more pop.”

In the meantime, shoppers like Evan Bariault, who was at Nike on Friday, are left wondering how long they have before they’re mourning the loss of still another downtown retailer. Seeing a big brand like Nike pull up stakes, he says, “makes you wonder, what’s next?”