Condo conversion at Smith Tower one step closer

Owners of the Smith Tower have one of two key city approvals needed to convert the Pioneer Square landmark from offices into condominiums.

Walton Street Capital, a private real estate investment company based in Chicago, filed an application with the city in February to build 150 homes in Seattle's first skyscraper, which was completed at 506 Second Ave. in 1914. On Monday, city planner Lisa Rutzick approved the plan with several conditions, including that it get a required approval from the Pioneer Square Preservation Board.

The board has not set a date to consider the plan. Rutzick's other conditions include limits on construction hours and a requirement for a plan to handle car, truck and pedestrian traffic during construction.

Walton Street bought the Smith Tower and the adjacent two-story Florence Building from the Samis Foundation for about $48 million in April. The foundation bought the tower a decade earlier for $7.6 million, then spent $28 million on renovations and updates.

The tower rebounded after the dot-com crash, getting up to about 90 percent occupancy last year from 74 percent five years earlier. But two tenants, Providence Health & Services and Disney Internet Services, are pulling out, vacating about 150,000 square feet.

In February, Walton Street operating partner Michael Allmon said the firm was "beginning to explore the opportunity" of converting to condos and would make a decision in four to six months.

The developers still haven't decided, he said Wednesday. "We're probably two months away from making a decision. But nothing's happened at this point to keep us from looking."

Pioneer Square's neighborhood plan, which was last updated in 2003, calls for more housing, particularly private development for middle-income residents, to help revitalize the area.