McMenamin’s to begin construction on Tacoma’s old Elks Lodge

McMenamin's, Oregon-based developer of brew pubs and hotels, plans to rehabilitate the forlorn Tacoma building and open it as a pub, restaurant and hotel. Construction begins in 2017. Mike McMenamin talks about how they will do this.
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McMenamin's, Oregon-based developer of brew pubs and hotels, plans to rehabilitate the forlorn Tacoma building and open it as a pub, restaurant and hotel. Construction begins in 2017. Mike McMenamin talks about how they will do this.
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Tacoma’s renovated McMenamins Elks Temple to open in summer 2017, company announces

By Kathleen Cooper

kcooper@thenewstribune.com

November 17, 2015 10:04 AM

Six years after Portland-based brewpub operator McMenamins bought Tacoma’s historic Elks Temple, it’s finally the city’s turn to watch the company polish one of the jewels of downtown.

The company announced Tuesday that the renovated lodge at 565 Broadway will open in summer 2017, with work beginning in earnest in the spring.

The company has set opening dates before, something company co-founder Mike McMenamin said Tuesday he is sensitive to. But now work has started on the five-story white stucco building built in 1915. The design is done, the lead architect said. This week, crews began removing asbestos and lead paint, and doing “exploratory” demolition.

In an interview Tuesday, McMenamin explained why his company thinks Tacoma is a good investment: character.

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“It’s not a dollars and cents thing. It’s a feeling. There’s a good arts community here. We like the lay of the land and the water,” he said. “It’s more gratifying to come into a community that’s not reveling in its own greatness.”

Construction alone will generate hundreds of temporary jobs, said company chief financial officer Chris Longinetti, and the completed lodge will support 150-200 permanent jobs.

The finished McMenamins Elks Lodge will complement work the city of Tacoma has done in the area, including renovating the attached Spanish Steps and overhauling Stadium Way.

McMenamins bought the Elks building in 2009. Tacoma has waited as the company weathered the recession, then moved ahead on a big project in Bothell. That facility, the Anderson School, opened last month.

The company doesn’t typically take several years to start work. But McMenamins had to complete the Bothell project first because it was owned by the city, which set performance deadlines as a condition of the sale. That pushed the Anderson School ahead of the Elks. McMenamins does only one big historic renovation at a time.

“You want the project to be great,” McMenamin said. “Bothell took everything we had. If you start knocking things out, you lose a little of the passion.”

Another complicating factor was financing. One of the results of the recession and its effect on the lending market is that McMenamins sought outside investors for the first time for its Bothell and Tacoma projects. At first, that wasn’t easy. The company approached real estate investment groups and were rebuffed, time and again.

“We were beating our heads against the wall, trying to convince people who do shopping centers to invest in us,” McMenamin said Tuesday. “I hated it. It was stupid.”

In 2013, the Securities and Exchange Commission amended a regulation to allow businesses to advertise to investors via media and the Internet as long as the investors were accredited. That means, among other things, an individual with $1 million or more in net worth or more than $200,000 in annual income in the past two years.

That made all the difference, McMenamin said. “You could market to your fans.”

For the $25 million Bothell project, the company raised $6.3 million in funds from 23 private investors. The minimum investment was $250,000.

McMenamins will use the same strategy for the Elks Lodge. However, the minimum investment level will be $150,000.

“We wanted to open it up to more people in Tacoma,” Longinetti said. The company wants to raise up to $10 million, this way.

Investors must be “accredited” — defined as individuals with $1 million or more in net worth and greater than $200,000 in annual income, or qualified banks, partnerships, corporations, nonprofits and trusts, according to the company. Longinetti said a significant number of investors in the Anderson School are interested in the Tacoma Elks Lodge.

Renovating the lodge will cost around $25 million, Longinetti and McMenamin said. That includes the purchase price of the building itself and the vacant lot to the the north.

Since 2009, McMenamins has taken steps to care for the 100-year-old building. Crews pulled construction permits long before they’d ever use them and did a lot of work to ensure the building was secure. But despite constant work and experimentation, water still gets into the building. On Tuesday, during a storm, rainwater poured down the stairs on the south end of the building and pooled here and there.

That will stop when work begins on the permanent roof and trusses, said George Signori, lead architect and a senior associate of Ankrom Moisan Architects. That part of the building is the biggest area of concern. The ceiling of the top-floor ballroom, just under the roof, has started collapsing. A lot of the demolition in the next few months will reveal the level of repairs that will have to be made there.

Once completed, the lodge will have approximately 46 hotel rooms, three restaurants, a brewery, a bar under sidewalk along Broadway, as well as events space and a rooftop garden for use by the kitchen staff. Some of the hotel rooms will be “cabin” style throughout the fifth-floor ballroom, which will be illuminated by a giant skylight and decorated with greenery.

“It will be like being in your own terrarium,” McMenamin said.

While the Elks fraternal club had a pool in the basement, the renovated lodge will not. McMenamin said they wanted to use the space for a third restaurant, but it has a “water feature.”

“It will be river-like. Atmospheric. Water fun, let’s call it,” McMenamin said, adding that people shouldn’t assume a pool will never happen.

“There is the potential for the future,” he said. “Maybe nearby.”

McMenamin was referring to Old City Hall, across the street, which is now owned by the city of Tacoma. City officials bought the historically significant building from its previous owner to prevent it from deteriorating further and to find someone to renovate it. McMenamins was one of four groups that made a proposal to the city last week.

The company bid for Old City Hall because it’s close to the Elks and “helps us where we need help — more rooms and meeting space,” McMenamin said. “And it’s just a great building.”

Should the city choose McMenamins, the company wouldn’t begin work on Old City Hall until after the Elks Lodge is done. But the investments wouldn’t wait, McMenamin said.

“We’re not afraid to spend money on development, architectural plans and permits,” he said.

Kathleen Cooper: 253-597-8546, @KCooperTNT