During Magdalena's Bistro and Crêperie's last weekend in September, the kitchen stayed open "or until we run out of food." That's how Magdalena Theisen put it to The Bellingham Herald before the restaurant at 1200 10th St. closed for good on Sunday, Sept. 13, after 17 years. By the end of that month, two more Fairhaven doors had closed. Bloomhaven Bottle Shop had already shut down in early August.
Each closure got its own news story. Read together with a vote the Bellingham City Council took in July, they point the same direction. Whoever moves into these four spaces will open under different tax rules than the businesses that left. Those rules cut a city tax that is a small slice of what it costs to run a shop, and they do nothing about the cost that closed at least one of them.
Four closures, August to September
| Business | Address | Last day | Time in Fairhaven |
|---|---|---|---|
| Bloomhaven Bottle Shop | 1201 11th St., Ste. 101 | Aug. 2 | One year, 10 months |
| Magdalena's Bistro and Crêperie | 1200 10th St., Ste. 103 | Sept. 13 | 17 years |
| Corner Taphouse | 1125 Finnegan Way, Orca Building | End of September | Opened 2023 |
| Swag | 901 Harris Ave. | End of September | Moved from downtown in March 2025 |
One had been in Fairhaven for 17 years, one for three, and two for less than two. Magdalena's had been planning its exit for a while. The Herald reported that the closure was first announced in January, and Theisen said she would keep cooking as a private chef, offering dinners and cooking classes. Bloomhaven owner Molly Flynn announced on July 28 that the nonalcoholic bottle shop would close, citing financial difficulties, Cascadia Daily News reported.
The taphouse gave the most specific reason. According to Cascadia Daily News, Corner Taphouse got a new lease offer that raised its rent by 80%. The owners wrote that rising taxes and labor costs had already hurt, but the lease offer confirmed they "simply cannot make the numbers work." Over three years, the pub had become a home for weekly trivia, line-dancing lessons, book clubs and comedy nights.
Theisen's goodbye, as the Herald printed it, captures what a 17-year storefront is to a neighborhood:
"For 17 years you welcomed us, supported us and allowed me to share a little piece of Poland and Europe through my food. I've watched children grow up, celebrated birthdays and special moments with families, and made friendships that I know will stay with me long after the doors close."
The rule that changed on July 27
Before this summer, Bellingham offered new businesses in some of its urban villages a phased break on the city's business and occupation tax. It covered 90% of the tax in year one, 75% in year two and 50% in year three. Fairhaven wasn't one of the eligible areas, and neither was Barkley Village.
On July 27, the City Council voted 6–0 to adopt Ordinance 2026-07-018. For Fairhaven, the ordinance text changes four things:
- Fairhaven is now eligible. The credit now covers every urban village, and the ordinance names the Fairhaven Urban Village outright.
- The credit is 100% for all three years. The old 90/75/50 phase-down is gone.
- Businesses moving within the city don't qualify. A shop that moves to Harris Avenue from elsewhere in Bellingham can't claim it.
- Multi-location businesses get it only for the Fairhaven location. The credit applies only to the tax tied to the qualifying location.
The city's B&O tax page explains how claiming it works. Eligible businesses have to apply before their first return is due. They still file returns to keep their business licenses, because this is a credit against the tax owed, not an exemption from filing.
The same ordinance sets up a separate seven-year, 100% credit, but only for new businesses in a mapped downtown pedestrian core. Fairhaven gets the three-year version. The council's reasoning was mostly about downtown. The ordinance cites a city vacancy study that put downtown's ground-floor vacancy rate at about 14.6%, which it called "unhealthy." That figure is for downtown, and no comparable number for Fairhaven appears in the city's materials.
What a tax credit can reach
Read the Corner Taphouse story and the ordinance together. Cascadia Daily News added a line of context: city taxes make up a small percentage of a business's expenses. The taphouse's last straw was a lease. The city's new tool reduces a tax that sits a long way down most small businesses' budgets.
The credit is also only for new businesses. Corner Taphouse opened in 2023, years before Fairhaven qualified, and an existing pub facing a rent increase wouldn't have counted as new. The policy makes opening in Fairhaven a little cheaper. It doesn't change the cost of staying.
Those empty addresses will be filled under these rules. The next tenant at 1125 Finnegan Way, 1200 10th St. or 901 Harris Ave. could go three years without paying city B&O tax, assuming it's new to Bellingham and applies on time. None of the four spaces has an announced replacement, and the landlords haven't said publicly what they're looking for.
The one door that opened
Fairhaven got one confirmed addition this season. Trevor's Magic Rocks, the business formerly called Trekntreasures, held a grand opening with Starlight Goddess Studio on Aug. 29 and 30 at 1302 12th St. It sells lapidary-made jewelry, carved and polished stones and mineral specimens, and it teaches classes, according to Cascadia Daily News. The Herald's August business roundup confirmed it opened Aug. 29.
It opened about a month after the council vote. Whether the shop applied for the new credit hasn't been reported, and a business that changed its name rather than starting from scratch may not count as new under the ordinance. So for now, the shop is just a new place to visit on 12th Street.
The other address that matters is still a construction site
A few blocks from Finnegan Way, the Fairhaven Center project, which locals call "the Pit," is planned for the northwest corner of Mill Avenue and 11th Street. The city's project page describes three buildings with nearly 200 homes in total. They include mixed residential-commercial buildings, public parking, affordable units and a permanent easement for the South Bay Trail.
The city's estimate for Phase 1 runs from fall 2025 through summer 2027, and it says those dates depend on the developer. The city's plan closes the South Bay Trail between Douglas Avenue and 10th Street and Mill Avenue and 10th Street while construction is underway, and the trail is to reopen near its original route.
This connects to the tax credit. Nearly 200 new homes within walking distance means more people in the village, and the project adds commercial space of its own. A business that opens on the ground floor of one of those buildings would be opening in Fairhaven after Aug. 1, 2026. Under the ordinance, that's the kind of new business the three-year credit was written for.
What's still on the October calendar
The empty windows haven't cleared the village calendar. Two dates are set for this month:
- Saturday, Oct. 24, noon to 5 p.m. Stones Throw Brewery, at 1009 Larrabee Ave., hosts its annual Crave a Beer, Carve a Pumpkin. The brewery bills it as the warmup for Fairhaven's annual trick-or-treat.
- Saturday, Oct. 31, 3 to 6 p.m. Brick-or-Treat returns to Historic Fairhaven Village, with candy and prizes from businesses around the district.
This year's Brick-or-Treat photo booth is in Finnegan's Alley, a short walk from the Orca Building space where Corner Taphouse held trivia nights until last month.
If you own a building near the village and want to know what a lease, a vacancy or the next tenant could mean for your property's value, Julian & Company follows these storefronts all year. Get your free home valuation and start the conversation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
