Tacoma’s School of the Arts could set the stage for the historic downtown post office’s revival.
After buying it in 2010 for a mere $1.375 million, the owners made a change this spring in how they managed the building. That quickly resulted in a major success.
In early June, the Tacoma School District signed a five-year, $1 million lease to install classrooms and offices on the second floor of the 102-year-old building at 1102 A St.
In March, building owner Patrick Rhodes hired a director of operations for his real estate properties. That includes the post office and the Olympia Brewing Co. in Thurston County – the other building he owns with George Heidgerken.
They were using “a third-party broker to market the space for 18 months and didn’t have much success,” said John Hunt, a Tacoma native who works for Rhodes. “They were marketing to the wrong crowd.”
Hunt, 36, is a Wilson High School graduate who has worked in accounting most of his career, most recently at Starbucks. He was hired away to manage real estate for Cascade Investment, the portfolio managers for Bill Gates’ family and foundation. He took the job with Rhodes because he was ready for a new challenge.
Finding tenants for historic buildings with major deferred maintenance is certainly that. The key for the post office, Hunt said, is creativity.
“Our goal is to create a creative cluster within the building. We’re going after artists, creative individuals and nonprofits promoting creative endeavors,” Hunt said.
This fall, when hundreds of students arrive, they’ll be the first new tenant since the federal courts left the U.S. Postal Service all alone in the mid-1990s. Hunt hopes the increased traffic will help persuade a restaurateur to open there.
In late June, Hunt provided an update. The interview has been condensed and edited.
When the building sold, we learned a lot about George Heidgerken and his colorful history. He owns an old railroad. He bought a college. He’s been in prison. Rhodes and Heidgerken bought the building together, but Rhodes is your employer. How does this work?
Pat and George are partners. When they bought the post office two years ago, Pat was still working as the head of Rhodes and Associates, an accounting firm in Federal Way. He’s since began his retirement and is focusing on real estate.
He’s always described himself as a CPA, but he’s been a real estate investor his entire career – mostly office buildings in the Federal Way area. The post office was his first big step outside that box. He also has ownership interests in a post office building in Kent and the Olympia Brewery.
The Tacoma post office building is beloved but hasn’t been used in more than 20 years. What work have you had to do?
Most has been deferred maintenance — things like the plumbing for all the upstairs floors. The toilets didn’t work. The drains didn’t work. So we bought new fixtures. Replaced pipe.
Then we cleaned up. We hired a maintenance man, and for the past two years, the building has been his baby. We’ve spent about a half-million dollars on everything from radiator valves to paint.
Have you uncovered anything interesting?
We found the entire architectural plan set from 1908. It’s amazing. Everything looks like it’s been printed on a modern-day printer, but it’s been done by hand.
Real estate investing is risky enough. Why is Rhodes interested in buildings that are so challenging?
Pat has an eye for historic nature of all those properties. He’s spent decades here. He knows the area. Not to sound too cliche, but he cares about these old buildings. He wants to see them be utilized.
That’s what he wanted me to do: develop a plan for the Tacoma post office. Try to adaptively reuse it. Find something that doesn’t require major redevelopment. The school district recognized that. We’re starting to work with artists in third-floor space. We’ve agreed in principle with Angela Wales Rockett to take the first artist suite on the third floor.
How did you land on artists as a target tenant?
We set up some meetings with City of Tacoma arts administrator Amy McBride to gauge the market. One thing led to another and we found out that SOTA was looking for space. We were in the right place at the right time, but we put ourselves there.
Without much marketing we were able to get the deal done with SOTA. It’s important to have early adapters to buy in to what we’re doing.
What’s the post office situation?
They have a lease through 2015 and options to extend. They’re a great tenant.
IDEAS FOR NEW USE OF DOWNTOWN POST OFFICE
Here’s what the owners plan for the building, which opened in 1910.
Basement: About 20,000 square feet. The post office uses 2,000. It contains men’s and women’s locker rooms and showers. It could hold about 15 artist suites or music rehearsal studios. It could be used for storage or certain retail opportunities.
First floor: About 20,000 square feet. The post office uses 7,000. The south end contains some office space. The north end could be retail with an anchor restaurant, and three to five small vendor stalls with public seating.
Second floor: About 16,000 square feet for The School of the Arts.
Third floor: About 16,000 square feet. Can hold up to 20 artist suites. Some office space is available. One former federal courtroom is frequently used for film and television backdrops, including most recently the Travel Channel’s “Dead Files.” The other, on the south end, could be private event space. It has 30-foot ceilings and views of Mount Rainier.
Fourth floor: About 6,000 square feet. Can hold up to 12 artist suites, or a single office tenant.
For more information: tacomapostofficebuilding.com
Staff writer Sue Kidd contributed to this report.