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.”
Has anyone visited the VI since Perez bought it? I have, several times. I found that prices at a publicly owned and subsidized restaurant had skyrocketed. OK, Covid, minimum wage and inflation have raised the cost of things. But the VI was supposed to be a place locals could visit and have a meal at a reasonable price. not anymore. No dusty poets or writers hanging out at the bar anymore, not for awhile. And, the quality of the food has gone down, and the portions are tiny (I know, Woody Allen) the manager requires all customers to sit right up against the bar, when the rest of the place is empty. We are elbow to elbow in the little area at the bar and adjacent to it, and they wont let patrons sit elsewhere to get a little room and privacy. Truth is, Perez is a shitty owner and has run that place into the ground. All he seems to do to complain that everything in society is stacked against him. Good riddance!!!!
What is this business without the iconic sign and legacy? Lots of good memories, but, the world moves on.
The V.I. will still be there.
Likely not the current proprietor.
As the Market PDA said.
“ 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”
As progressives love to tell us if you can’t pay a living wage you don’t deserve your business. This is the way.
@2: It remains a great place to drink and eat, or it always was went I went there with friends. It has a great location, comfortable brick-enclosed space, great natural light, some good views, and (as pictured) even some direct sunlight. As noted, the Market will likely assign this beautiful legacy to another proprietor.
Perez sounds like an asshole. It’s also sad that he’s claiming some kind of discrimination or that he’s being treated differently.
This has nothing to do with wages. Wages offset profit. Let’s say VI made $1.3M in profits last year and payrolls went up 100k this year, they’d only have $1.2M in profit this year, all else equal, and that payroll increases would bump VI below the level of profit on which the fee is assessed.
That $1.2M threshold from 2007 with 3% increases to 2025 amounts to almost exactly $2M.
Applying the 6% rate to the difference in those two numbers is almost exactly $50,000.
This whole sob story is about Perez taking home an additional $50k (after taking home $1.2M already, annually) instead of paying it to the historical foundation that’s drumming up all his foot traffic business – like everybody else in the Market does. Got it. Here sure did make himself sounds like the little guy there for a sec…
My bad, the $1.2M threshold is in sales, not profits. Either way, Perez is merely trying to make himself $50k of profit between $1.2M and $2M of sales… by not paying market rates to the non-profit PDA for that sweet real estate or for doing all the work that’s ultimately responsible for why customers come to the market in the first place.
Based on the interview the owner doesnt seem like a very nice person or very easy to work with.
Ah, yes. Steal a historic sign off of a historic building. That’ll deescalate the situation.
@8: I think he’s got a case that the 1.2 million in sales threshold should move with inflation.
Very few nice, temperate, moderate people run successful restaurents. Perez runs very much to type and his personality is irrelevant here. There are though basic facts presented that are not disputed. Rent goes up per an agreed upon index. Wages and benefits go city/state law, but the one $1.2M revenue gap does not change. In a sane business envonment, how can that possibly make sense. Over 5 years, at a 5% (rent + expenses) compounded rate that amount should have gone up to $1.5M. Per ChatGPT, average net margin for Seattle restuarents is 1.5%, which gives Perez around $5K a year in additional net income. I really don’t understand what Pike Place Market is doing here.
@10 What matters is whether Perez’s lease (which the article says made him wholly responsible for signage) includes a specific carve-out relieving him of liability for that particular sign. If it doesn’t, then he acted legally and prudently in taking it down. I would’ve done the same.
The Seattle Times had an article about this closing a while back and one of the commenters, who claims to run another business subject to this sort of PDA lease, says things are being misrepresented. They’re saying the 6% isn’t on top of the base rent, it is the rent, as long as the sales reach the minimum threshold ($1.2million/year, or $100k/month in this case). The base rent only exists as a floor in case the business has a terrible month, which apparently should never happen if you sell booze at a prime location as the VI does. So once the VI does $100k/month in sales, the rent is 6% of the total sales, but if they don’t reach $100k for a month, the rent is the “base” value instead of the 6%.
In this scenario, the effort to raise the $100k/month threshold with an inflation clause is just an effort to get more months where the sales target isn’t met and the rent falls to the base level, and an inflation clause going back to 2007 would substantially raise the threshold. The commenter says the 6% of sales rent is already much cheaper than it would be e.g. in one of the privately owned buildings in the area.
I don’t know if any of this is true, but it sounds plausible. The commenter made it sound like everybody pays the 6% rent and Perez is just trying to get special treatment for himself, which sounds similar to what the PDA is saying. In any case, Perez certainly comes across as a drama queen with the tantrum in the public meeting, the stolen sign, the playing of the race card, the social media campaign, etc.
@14: thanks for sharing something actually interesting from the Seattle Time comments.
I was born and raised in Seattle and have been enjoying the market for as long as I can remember. I have family and friends that have worked in the market including a close friend whom currently has his own PPM Tour Guide Company. Everyone has to pay the PDA non-profit for the grand privilege operate a business in the historic and protected PPM. None of the other PPM business owners agree with the current ownership of VI which has indeed jacked prices and lowered quality. BS that he’s a savvy restaurant owner because anyone with experience would know the resto business is much more difficult outside PPM…
The PDA insists its purpose is to maintain the character and history of the Market. But they’re not acting like historical preservationists, they’re acting like landlords.
“Said tenant will provide the sign, pay for the sign, maintain the sign……..” If that’s what the lease says, I have no doubt that the PDA’s talking smack when they say, “This historic sign…..is a part of the Market and does not belong to any one tenant.” I don’t care how long the sign’s been there. If the lease says that and he doesn’t take it down, they’ll screw him.
“Perez says he started keeping his passport on him. “Because my last name’s Perez, and I don’t want to be disappeared.””
I don’t blame him for that one bit. The last few years, every time I think about going out of the country I try to think of anything ANY border guard could do to make my life uncomfortable…..and I’m about as whitebread as they come.
@1, What?, you think a large, corner bar on 1st Ave would be cheap? There used to be a high end French bistro next door, for Christ’s sake.
@8, I don’t know: “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.”
That means profits, NOT sales (Unless this is just more shitty Stranger bad reporting). If that’s the case, I’m not sure the 6% is all that out of line. Needs more info/clarification.
@12, What you said. @13, ditto.