Seattle’s historic Shanty Cafe may not reopen after fire, insurance problems

Seattle, WA — Jose Madriz and his family own what’s left of the historic Shanty Cafe restaurant in Seattle’s lower Queen Anne.

They bought it in 2016 and then lost nearly a quarter million dollars in a disastrous remodel. The project left the place with unfinished and unpermitted work, along with a squatter living inside the shell of the building.

“It’s been very stressful on our family,” says Jose. “And it’s been very difficult to kind of keep up.”

And in June, their dream burned down. The cause is still undetermined.

When Jose heard about it: "I said, I hope I’m insured. That’s what I was questioning, like God dang! Did I pay my premiums? My insurance premiums? Because this is a bad one. "

They paid. The family had $811,000 in coverage on the building. However, their net claim payout is just $114,000. Not enough to rebuild.

“No, not even close,” says Jose.

And that may spell the end of the restaurant.

“Just going day by day, just going ‘what the hell do we do?’” says Jose.

Here’s the problem: the insurer can only pay out what the building’s condition is at the time of the incident. And it was in really bad shape.

Jose says that’s because of a nightmare renovation involving a cut-and-run contractor. The family paid Interstate Interstate Industries, Incorporated, upwards of $250,000 to turn The Shanty into a Mexican restaurant. But when I spoke to Jose and his brother, Lionel, last year the two said the company cleared out the inside of the property and then did little or nothing to improve it.

“We do have some cement pouring here. You can see some of the rebar. But from what I understand from my architect, there was no permitting for this. So we’re probably going to have to take it out, which will cost a lot more than it would cost to put it in,” said Jose at the time.

Jose estimates it will cost upwards of $500,000 to rebuild the restaurant.

“And we’re still at phase one,” says Jose. “Now, even - phase zero now.”

He says the current offer is just enough to clean up the property and prepare it for sale.

We’ve reached out to the insurance company to try to find a solution for the Madriz family and The Shanty.

If you want to help, you can contribute to The Shanty’s GoFundMe.

Email Jesse right now at