Last Friday, when the historic Virginia Inn Restaurant and Bar announced on social media that it would be closing on April 27, the post included a call to arms. The author of the message, Virginia Inn’s owner Craig Perez, asked patrons to contact Mayor Bruce Harrell and the Pike Place Market Preservation and Development Authority (PDA) to protest their notice to vacate. Perez added that the business’s lease has been terminated “due to failed negotiations for an equitable lease,” and ended the message by saying, “We have a staff of 20+ people; many long-term employees who have dedicated their lives and love to this place. We want to stay!”

Open since 1903 at the southwest corner of First Avenue and Virginia Street, the Virginia Inn’s easily the oldest restaurant in the Pike Place Market—it predates the Market itself, which opened in the summer of 1904. The building it’s in, the Livingston Hotel, was erected in 1901. In 2008, the bar expanded southward, taking over the frame shop next door and doubling its square footage.

Known as “the V.I.” to locals, the indelibly Seattle bar-resto earned a rep over the decades as a place where scruffy artists and writers go to drink, often serving as an art gallery, and it even snagged a cameo in 1992’s grunge-flavored rom-com Singles. With its blue-and-white hexagonal floor tiles, mahogany Brunswick bar, and iconic vintage neon sign, it certainly looks the part.

Perez bought the joint in 2019, along with former business partner Karl Sexton, whom he bought out in October 2024. Perez says the Virginia Inn has been on a month-to-month lease since March 2024, following his refusal to re-up on the PDA’s proposed lease terms for another five years. The sticking point, he says, is the clause that requires the tenant to pay 6 percent of its profits to the PDA for every dollar they made over $1.2 million per year.

An email query I sent to the PDA on Monday elicited the boilerplate response that everyone else seems to have gotten. Madison Douglas, the Pike Place Market PDA’s director of marketing and communications, wrote in part:

“First and foremost, the PDA has worked diligently with Virginia Inn for nearly a year in hopes of finding a path forward—we did and do not want them to leave the Market. The Pike Place Market PDA never wants to see a business leave.”

So what went wrong? We reached out to both PDA and Perez, and the story got messier.

“Over several months,” Douglas wrote in her initial response, “the PDA offered numerous opportunities to either negotiate a new lease or sell the business, but Virginia Inn did not pursue either path. As a result, the PDA was forced to end the month-to-month tenancy.”

Douglas explained that, although the PDA doesn’t discuss details of individual leases, the organization is committed to fair and competitive terms for all Market businesses. She also expressed disappointment on behalf of the PDA that Perez has chosen not to work with them, and she claimed that the five-year lease extension Perez was offered contained “terms in line with similar businesses at the Market.”

“To clarify,” Douglas continued, “our goal moving forward is to find a new partner and steward for this Seattle icon so it can remain a part of the Market. The Virginia Inn has had several owners over the years, with the current owners in place for the last five years.”

“By ‘they’re working with me,’ they wanted to force a sale,” Perez says over a cider and a basket of fries at the V.I.’s ornate, wall-sized bar. “That’s what that means. They want me to sell the Virginia Inn, not work out a new lease. They don’t like me.”

Perez says he got the first notice to vacate around Thanksgiving 2024, but he saw trouble coming long before.

“In 2018, before I signed the lease,” he says, “Karl and I were in talks with Tabitha [Kane] and Matt Holland, who were the PDA reps at the time. And they had a few things in the five-year lease that I wanted to discuss, one being the cutoff at $1.2 million. So we were sitting down to finalize the lease, and when I said, ‘Hey, about this lease, I have some questions,’ the hand reached across the table, grabbed the lease, and pulled it back. I was looked in the eye, and the words that came out of her mouth said, ‘This isn’t that sort of meeting, and this isn’t that sort of lease. You either sign it, or you don’t.’”

And so he signed it, Perez says, with plans to renegotiate when it expired in five years. He argues that the PDA’s standard lease is a bum deal for the Virginia Inn specifically, as well as a bum deal for restaurants in general. “Because [the Virginia Inn is] a full-service restaurant, and I do have way more people per square foot working on the clock than a counter-service place, my costs per square foot are higher. And that number of $1.2 million in sales has not moved since 2007. However, like many restaurants, my rent is on an annual escalator that’s tied to CPI [consumer price index] or 3 percent, whichever is greater.”

When asked what he wants the cutoff to be, if not $1.2 million, Perez says, “The PDA should take the original number from 2007, and they should adjust that for inflation at 3 percent. If they were to apply that same inflation escalator to that $1.2 million sales cutoff, I would sign the lease.”

He adds that one-third of his costs are employee wages, which were significantly bumped up by Seattle’s minimum wage increase that took effect on January 1. “Which I do not mind paying! I’ve worked minimum wage jobs, god knows. But that wage increase has a higher rate of inflation than normal, and everything is getting more expensive. So the cutoff should be tied to that.”

He speculates that this lease model possibly exists because people who own restaurants and retail spaces are often immigrants or other types of marginalized people who might not have access to capital, legal counsel, or education. Therefore, Perez says, “professionals” are typically offered a different kind of lease than restaurants are, where it’s a flat fee, without a profit-based percentage tacked on.

“Why don’t you offer me a lease that you would offer me if I were a doctor or a lawyer?” he asks. “You know, a professional? You’d offer me a lease that says, ‘This space is a thousand square feet, I’m charging you X dollars per square foot, don’t burn the place down,' and that’s it. When you’re a restaurant or you’re retail, you’re not seen as a professional. They tie it to the money I make, with that 6 percent bonus for the landlord. That doesn’t really sound fair to most of us who’ve ever taken a pile of beans and divided them up. But someone who doesn’t speak the language, or someone who might be new to the country, someone who might not have a college education, or maybe someone who just doesn’t have credit? Is gonna sign that lease.”

When I emailed the PDA again to let them know I spoke to Perez and to ask for their side of this story, Douglas again responded. “Perez’s speculation that our lease model is predatory or targets marginalized communities is both inaccurate and extremely offensive—to our staff and to the many immigrant-owned businesses that make Pike Place Market what it is. Our lease structures are categorized by business type, location, and size. We do not make exceptions based on perceived professional status or background.”

She went on to say that the PDA is a not-for-profit organization that does not make a profit from rent. “Our rent structure is designed solely to cover the costs of operating and maintaining the Market and to support vital capital improvements that preserve this historic district.”

Perez, meanwhile, draws a correlation to emancipated former slaves in the post-Civil War South, saying that requiring these leases in many cases is tantamount to having workers sign labor contracts that they may not be able to read.

Perez, of course, can read, and he says he is a veteran restaurateur who knows the ropes, so he’s using his voice to protest. “It’s not a fair system. Everyone [renting in Pike Place Market] is feeling it, but I’m the one yelling it. They don’t want their leases terminated.” For his trouble, he says that mayoral-appointed PDA chair Devin McComb “sicced nine security guys on me” following a public meeting with the PDA, which Perez had spoken at. “He did that twice. And he’s a lawyer, and that’s a bullying tactic. That’s intimidation.”

Douglas says that Perez’s account of the incident is inaccurate.

“During a Council meeting in September 2024,” she wrote, “Perez exhibited extremely aggressive threatening behavior—to the point that several individuals in the room became visibly uncomfortable and concerned for their safety. While Perez did use the public comment portion of the meeting to speak multiple times, he continued afterward by moving through the room and getting within inches of each Council member's face with a recording device, despite the meeting having moved on to other agenda items unrelated to The Virginia Inn. He was asked to stop his behavior, advised it was inappropriate and menacing, and was asked to leave the meeting.”

Perez says he’s been barred from attending public PDA meetings in person, although he’s still allowed to join them virtually. Douglas corroborated this. Perez says the PDA is also claiming that the huge mahogany bar inside the Virginia Inn belongs to them, along with various other items inside the space and the famous neon sign.

That’s another wrinkle in this story. Take a walk past the building, and it’s impossible not to notice that the historic sign is missing from the Virginia Inn’s facade. It’s like a face missing a nose.

“The sign is at my house, dogg,” Perez openly admits. He took it down, he says, because he didn’t want the PDA to take it first, and that he’d much rather have it on the building, where it belongs.

“Oh, they’re mad. They actually threatened a police report. They threatened to have me arrested. And you know what? Go for it, because I have their lease with their signature on it that says, ‘Any signage is the responsibility of the tenant. Said tenant will provide the sign, pay for the sign, maintain the sign, and, upon vacating, be responsible for removing the said sign at their own expense, or it will be removed by [the] landlord and billed to the tenant at the tenant’s expense.”

When asked about the sign removal, Douglas replied, “Perez had the historic neon sign removed that had stood outside of The Virginia Inn for over 100 years. While his lease may address signage installed and paid for by the tenant, this does not refer to the historic sign affixed to the outside of the building. Many tenants have been the stewards of The Virginia Inn during the past century-plus, and there will be many more in the future. This historic sign, like the other historic features of The Virginia Inn, is a part of the Market and does not belong to any one tenant.”

When the PDA said they called the police on him for taking the Virginia Inn sign down, Perez says he started keeping his passport on him. “Because my last name’s Perez, and I don’t want to be disappeared.”

Perez confesses that his frustration with the PDA has been building up for years—“They shut the restaurant down for five months during COVID, and yeah, I was rage gardening!”—and he  also maintains that the PDA’s refusal to negotiate seems targeted at him specifically. He says he’s only reacting to what feels like personal attacks. “Like, I’m not a shit-starter, and I don’t go looking for shit, but this is MY shit. If you fuck with me, I’m gonna take down that sign. If you’re a bully, meet me at the flagpole.”

At press time, neither party has budged. If the worst happens and the Virginia Inn is made to vacate, Perez plans to take all of his appliances with him when he goes, leaving as much of an empty box as possible for the next tenant. When asked if he’s considered selling the Virginia Inn, as the PDA supposedly wants him to, he says, “What can I sell? All the knives and glasses? Who will buy an empty space?”

But it’s not what he hopes happens. Toward the end of the conversation, longtime V.I. bartender Steve wanders over and chimes in. “We’re really hoping for a miracle here. We’re hoping to pull a rabbit from a hat.” Perez reiterates that he agrees and that he honestly just wants to work something out with the PDA.

“We want the Virginia Inn to be here,” he states. “We want to have jobs. I did not get into this business to make money—I got into this business because I love it. And I love this place.” He adds that there’s still time for him and the PDA to work out a new, adjusted-for-inflation lease for the V.I., instead of forcing his business out and having to start over from scratch. And that it doesn’t have to end this way.

“It’s changeable,” Perez says. “I am not a pessimist. It’s an opportunity.” 

Douglas, however, closed her email with a stern coup de grace. “Final thought,” she wrote, “the PDA fully intends to find a new steward for the iconic Virginia Inn.”