The long term future of the property that houses the strip mall anchored by Quimper Mercantile is under consideration by its ownership, but with leases still in place, any change is years down the road.

“It is more likely that the center will eventually be replaced with new construction — carefully designed to fit in and enhance the community in a way that represents a clear improvement over the existing building,” wrote Brandon Farrell, chief operating officer of Hall Equities Group, which acquired the property in 2022.

Rumors of a hotel planned for the Port Townsend Plaza, which is also home to Don’s Pharmacy and several other stores, have been circulating for weeks online, bolstered by merchants noting they were being told their leases could not be renewed.

“To be clear, we are not tearing the property down and replacing it with a hotel anytime in the near future,” wrote Farrell, adding the spate of social media rumors compelled the organization to set the record straight.

“We believe some members of the public may be confusing our property with the hotel project recently approved across the street, which was approved by the City. We oppose that project, as its design includes woefully inadequate parking.”

The plaza property already deals with “ongoing challenges related to the general public — many of whom shop, dine downtown, or ride the ferry—treating our private property as a public parking lot. Adding over fifty hotel rooms across the street without sufficient parking will only make this issue worse.”

In December 2024, city staff completed an environmental review of the proposed 50-room Water Street Hotel with eight parking spaces, which continues through the city’s planning process.

The application for the four-story hotel, under the ownership of Niviar, an Anacortes-based company, was submitted on March 27, 2024. The project involves removing and replacing the Sanderling office building at 1136 Water St. The application was completed on Dec. 5, 2024 according to city records.The city collected public comment through Dec. 31.  

Farrell wrote that when Hall purchased the property nearly three years ago all but one suite was leased. “To date, we have retained all but one of the tenants who were present when we acquired the property, and we’ve made good-faith efforts to lease the last vacant space at the southwest corner of the center.”

Port Townsend’s “anti-chain store ordinance, coupled with the poor condition of that space, has made it difficult to fill,” according to Farrell. The space requires substantial investment for food service users who have shown interest, which typically “necessitate a very long-term lease to justify the costs of build-out.” Given Quimper’s remaining lease, “we want to keep our options open regarding the future of the Center.”

Quimper is a community owned corporation, having raised funds through a public offering in 2011, according to Peter Quinn, board president and principal of the mercantile.

“At this point we have roughly five years remaining on our initial 20-year lease,” Quinn said. “What I can tell you is that Quimper has been unable to extend our lease past its current term and we are actively pursuing our options. We have time to determine how to proceed and will definitely continue operation well past our current lease period.”

Farrell noted the “practical considerations,” such as economic feasibility, that had to be addressed with any major project. “This may necessitate a change in the property’s current uses, or the introduction of new uses to make the overall economic equation work. It will also likely require a solution to the well-known parking problems that plague the downtown area.”

Quinn spoke of the history of Quimper Mercantile. “Our doors opened on October 11, 2012 and have been in continuous operation since then. Although our primary mission is to serve our community by offering local options for everyday items, we have been profitable since our second year of operation.”

“Quimper Mercantile is here to stay,” said Quinn.

The proposed Water Street Hotel is in the process of completing the State Environmental Protection Act (SEPA) checklist, which determines whether the project will have a significant adverse environmental impact and public comment gathered during the public comment period, will provide the background information required to determine whether the project is likely to have a significant adverse environmental impact.

In addition to completing the SEPA checklist, the city has submitted applications for both a building permit and a demolition permit to clear the site for construction. These permits are currently pending the SEPA threshold determination.

Once the SEPA threshold determination is finalized, the public will also have the option of appealing the decision.