January 1, 2003 was the day the music died at I-Spy, one of Seattle's best-known live music venues. In the face of a faltering economy, fierce competition from other clubs for top-drawing acts, and a deep internal dispute among owners, the downtown club abruptly shut its doors for the last time after a New Year's eve appearance by DJ Spooky, canceling its remaining schedule.

The club, located at 1921 Fifth Avenue, had been beset by financial difficulties for more than a year, according to co-owner Chris Roberts, who ran the club along with partner Sandy Kolbeins. The affiliated Nation, which served food and hosted DJs upstairs, is also now closed, Roberts added.

Roberts blamed the closing on a number of factors. Though the club opened with a bang three years ago, the collapse of the dot-com economy and the ubiquitous, lavish parties that went with it--many of which were held at I-Spy--was the first sign of trouble, he said. And the loss of such business accelerated after 9/11, leaving the venue in shaky financial straits by December 2001.

"All the clubs have weak sales right now," said Roberts, who also co-owns the Alibi Room. "We've gone from a glut of customers to a glut of clubs."

Even after a major reorganization and staff downsizing in early 2002, the club continued to have trouble making ends meet. "It's a miracle we made it this long; it shows the grit of the staff people who worked here," Roberts said.

With the closure, eight remaining regular staffers and a similar number of part-timers are now out of work. Michiko Swiggs, who did web design for I-Spy, expressed sorrow but not great surprise at the club's demise. She said the employees had formed a "tight circle" of friends, and news of the shutdown "had spread like wildfire" among them.

Aside from general economic malaise, the club also suffered from an identity problem. Roberts expressed disappointment with the choices of booker Steven Severin; Roberts believed that Severin's selections, in a tightly competitive market, were not as strong as they could have been. Severin, who left I-Spy to become the booker at Capitol Hill's Chop Suey six weeks ago, expressed anger at Roberts' claim. "What a motherfucker," he said, contending that he poured his "heart and soul" into I-Spy. Chop Suey has been posting record numbers since his arrival there, Severin added.

I-Spy had also been harmed by a running dispute Roberts and Kolbeins had with third partner Chris Beno--who, Roberts claimed, unilaterally withdrew from the day-to-day club operations more than a year ago. According to Roberts, the three are also partners in Graceland, though Beno has been running that club on his own without sharing the profits. He expects the "nightmare partnership" to end up in court; Beno did not return a call for comment.

Finally, a much-publicized double homicide outside I-Spy after an October hiphop show scared staff and harmed the club's reputation, but was not in itself significantly responsible for the closing. "It was just another nail, but not the nail in the coffin," Roberts said.