Another Bay Street institution has closed its doors.

Owner Todd Waterman closed the Bay Street Ale House, which he opened in 1995, on Oct. 7.

Waterman, 44, has had the pub at 807 Bay St. listed for sale for more than two years. He suspects that hurt business because people might have feared that the quality was compromised by having it for sale, which Waterman said was not the case.

He said that perception was only the latest factor in the pub’s decline, though.

“Downtown really is in a slump right now,” he said. “It kind of started with Slip 45 (night club). That place closed down a couple of years ago and has been empty.”

Waterman said that particularly was difficult because patrons frequently would “pre-funk” at the Bay Street Ale House before heading to Slip 45. He said the fire that closed Myhre’s in July also hurt downtown business. While Myhre’s might reopen, others such as Delilah’s Cozy Kitchin, Los Cabos and Shi-Shi Ni have closed.

The latest incarnation in the former Cozy Kitchin space — The Waters Restaurant that opened in March — apparently also has closed, although the owners could not be reached for confirmation.

Waterman initially thought some closures might benefit his pub financially, but he said it has become worse because people do not frequent Bay Street as much. Also, he said the Great Recession forced some former patrons to reduce their entertainment budget.

“Disposable income is the business I’m in,” he said.

Even though the Bay Street Ale House has closed, Waterman said it remains for sale. While the building is privately owned, Waterman is willing to sell the business — and all of its equipment and the food menu and ingredients — for $150,000.

That includes both floors in the 2,783-square-foot building and a private apartment. He said the top floor, which seats about 45 patrons, only was open on Friday and Saturday nights to accommodate heav-ier traffic in the pub. Waterman said he leased it out for private parties during the rest of the week.

He also is willing to sell the business and just the contents on the lower level, which seats about 75 people, for $125,000. Waterman said that does not include refrigeration or the kitchen.

“We’ve had some pretty good years in that place,” he said. “What I’m asking for is reasonable and fair. You couldn’t build a place for that price.”

Waterman said he has received some interest in buying the business, but lenders are complicating the situation.

“I’ve had a lot of people who have been interested, but nobody with the money,” he said. “The banks aren’t loaning anyone anything.”

Waterman is just hopeful that he can offload it soon.

“I’m kind of in a financial nightmare,” he said. “My business has gone under and my house is in foreclosure.”

Waterman, who grew up in Ann Arbor, Mich., moved to Seattle in the early 1990s. He and his friend, who owned a bar there, traveled to Kitsap County and found that there were only bars that served “yellow beers” and none were smoke-free. Waterman said he liked to frequent smoke-free pubs that had “Northwest craft beers only, pizzas, salads and sandwiches.”

That once was a novel concept, but Washington state instituted a statewide law prohibiting smoking in all indoor public places on Dec. 8, 2005. Several pubs also have expanded their food options.

But with the exception of Moondogs Too, which also is located on Bay Street, Waterman cannot think of another pub that is doing well.

“I know several other bar owners that are barely hanging on,” he said.

Waterman thinks the Bay Street Ale House could be successful with a fresh perspective, though.

“It just needs someone to reinvest and have some ambition,” he said, adding that he lacks Internet savvy and advertising experience.

The pub’s signage facing Puget Sound is broken, which he said affects the Bay Street Ale House’s ability to attract boaters.

Waterman said he would be willing to help a buyer re-establish the pub “for a week or two” and sort out a new lease with the landlord.

For more information, contact Waterman at (360) 876-5808 or visit LoopNet.com for more details on the property.