There was a time when Ryan Heidy would visit Tully’s Coffee shop in Eastgate’s Sunset Village and marvel at the location.
An Eastside native who, in 2010, quit his job as a sales representative for TaylorMade Golf Company to open Issaquah Coffee Company in Gilman Village, Heidy delighted in daydreaming about the kind of business he could run in such a choice location.
Situated in a corner spot with ample parking, the Tully’s Coffee shop in Eastgate was visible from Interstate 90 and surrounded by a pool of potential customers — students at Bellevue College, people waiting for their vehicles to be serviced at Michael’s Toyota, or the clientele who visited Jerzee’s Barber Shop next door.
Heidy, 40, eventually sold Issaquah Coffee Company and, along with one of his employees, Ryan Yamaguchi, opened Cypress Coffee Company in Redmond in November 2017. A month later, he happened to drive by the Eastgate Tully’s when he noticed something so unusual that he had to park his car and get out for a closer look. The coffee shop was shuttered, its doors were locked, the lights were off, and the place appeared to be abandoned.
Heidy’s first thought — What is going on here? — was followed by another — It would be amazing if we could get that spot.
What was going on was that Tully’s Coffee — which was founded in 1992 and grew to include four dozen stores in Arizona, California, Idaho, and Washington, and employed more than 450 people — was in financial shambles.
In 2009, Keurig purchased the Tully’s trademark and wholesale business for nearly $41 million, licensing it back to a company that operated the retail stores. Three years later, the coffee shop operation went bankrupt, and was later acquired by the investment firm Global Baristas, for $9.15 million.
Still, financial trouble lingered. By March 2018, every store in the United States was shuttered.
Heidy and Yamaguchi approached the Eastgate property owner and inquired about leasing the former Tully’s Coffee shop space. The business partners signed a 10-year lease in March, and spent the next three months completely remodeling the space: Steel and wood tables fill the room, accented by walls lined with white tiles. There is a central fireplace to be utilized during cold weather, and a garage-door wall that can be opened to let the outdoors in on warm days.
The pair opened Cypress Coffee Company in Eastgate in late June.
“Never did I think they would actually lease to the little guy,” Heidy explained one recent weekday morning while sipping coffee and watching a steady stream of customers pour into Cypress Coffee. “There was a lot of interest in this spot, from a bunch of people with a lot more credibility — as far as length of time they have been around and financials — than we could offer.”
Heidy paused, then added, “We kind of won them over, I guess.”
An adage exists in life and business: One person’s misfortune is often another person’s opportunity.
That’s especially true when you look at what has happened to the Tully’s Coffee shops that once populated the Eastside.
Like Heidy, some specialty coffee shop owners saw Tully’s Coffee shops on the ropes as an opportunity to expand their operations.
For Wes Herman, founder and CEO of Lynden-based Woods Coffee, Tully’s departure facilitated his company’s plans to increase its footprint on the Eastside. Woods Coffee opened a location in Bellevue Square in 2016, Lincoln Square in 2017, and another location near Hotel 116 and Chick-fil-A in August. The Bellevue Square location was a former Tully’s Coffee shop. The Lincoln Square location was first a Tully’s, then a doughnut shop, before Woods Coffee moved in. The third location, which includes a drive-thru, was never a Tully’s location.
“We were ready to build a store in the Bellevue community,” explained Herman, who founded Woods Coffee in 2002, and now oversees a business portfolio that includes a roastery in Lynden and 18 coffee shops in Washington, as well as a location in British Columbia. “Tully’s had been on a downward slide for several years, so they were becoming less of a factor over this time. We would have opened stores in Bellevue regardless of Tully’s. Their exiting these sites simply allowed us to accelerate the timeframe.”
In early 2016, Herman said he learned the Bellevue Square location would be available, and he competed with other retailers for the spot.
“The appeal to us was the opportunity to be part of Bellevue Square, one of the top malls in the U.S.,” he added. “We saw Bellevue Square as a high-visibility location for us to launch on the Eastside. After we had proven ourselves at Bellevue Square, (we were) offered Lincoln Square.”
Another point of interest: In Bellingham, Woods Coffee moved into two former Tully’s Coffee shops.
On the ground floor of the Hyatt Regency in downtown Bellevue, Fonté Coffee Roaster now operates in a space once occupied by Tully’s.
Anchorhead Coffee plans to open in the former space inside the City Center building near the Bellevue Transit Center.
In November, Aegis Living founder and CEO Dwayne Clark purchased the Clyde Hill building that once housed a Tully’s Coffee. The plan? Turn it into Queen Bee Café, a coffee shop named after his late mother.
Not all former Tully’s Coffee shops have been turned into other coffee shops.
The former Tully’s Coffee shop in Bothell’s Canyon Park shopping center has been converted into a second location for Singapore Math Club, a Bellevue-based organization that teaches math to children.
On Mercer Island, the city announced earlier this year its plan to purchase property that is now home to a vacant Tully’s and turn it into a park-and-ride lot that will serve commuters on Sound Transit’s Link light rail service, which is expected to open in 2023.
In the Hillfair Shopping Center on Main Street in downtown Bellevue, the Tully’s Coffee shop has been closed since March 2017. Eviction notices posted by the King County Sheriff’s Office warn that trespassers will be criminally prosecuted. If you peer through the storefront windows, tables and countertops are covered in dust, and product shelves sit empty — the Tully’s equivalent of a “ghost mall,” basically.
Finally, the former Tully’s Coffee shop in Issaquah remains vacant.
Perhaps it could be a third location for Cypress Coffee or another specialty coffee shop owner looking to expand?
“Our model can only support so much,” Heidy said. “Right now, it doesn’t look like any of the other Tully’s spaces really fit what we are trying to do. But it will be interesting to see what happens. Here, we’ve built out what we think is a really cool venue. So far, the response has been awesome.”
If not Heidy, then perhaps another Eastside entrepreneur will see a business opportunity in the couple remaining, and vacant, former Tully’s Coffee shops.