Losing a major tenant never looks like good news for a commercial building.

But for the Pavilion, the failure of the HMC gym may create a stronger overall tenant mix.

The 10,000 square feet of empty space on the Pavilion’s second floor – created by the demise of HMC and the relocation of architect Bill Chester – is now fully committed, owner-manager Jeff Brein said.

One of the new tenants, a restaurant, will bring service-oriented retail to the second floor for the first time.

“We were notified of HMC’s demise at the end of February, and we’ve worked pretty hard since then in a soft market,” Brein said. “I’m pleased with the progress we’ve made – we don’t have anymore space to lease if I wanted to.”

The new restaurant will be in the southeast corner, with a view to Eagle Harbor from the outside deck. Owned by islanders Bill and Penny Anton, the restaurant will be called Spartans.

“They wanted to create a restaurant that has an identity with Bainbridge Island, so they thought, ‘you can’t do any better than Spartans, the high school team name,’” Brein said. “They plan to have blow-up photographs of old Bainbridge football and baseball teams, and a lot of those people are still on the island.”

While the menu shows innovative dishes like trout pizza, most of the fare is more standard pizza-pasta-salad material.

“It’s a family-oriented and not-too-time-consuming dining experience,” Brein said. “People can eat there and finish in time for the movie.”

The second floor is already the home of Cross Sound Church, which holds its Sunday morning services in the Bainbridge Cinemas theaters and has offices and a nursery upstairs.

Although details are not finalized, the west wing of the second floor is likely to be the home of a new fitness facility. Depending on the outcome of the court-ordered auction of equipment at the Madison Avenue gym once operated by HMC, the new facility will either be a competitor or a replacement.

The new tenant mix will give the Pavilion a longer retail day, Brein said.

“Because of the theaters, we have more foot traffic at night than the businesses on Winslow Way,” he said. “A gym would give us better traffic during the day as well.”

To serve the new upstairs enterprises, the Pavilion will install a staircase running from the movie lobby to the landing.

That should happen in mid-August, Brein said. Meanwhile, the elevator provides access.

On the ground floor, Bill McKnight design has left its small space for larger quarters – “the way you’d like to see tenants leave,” Brein said. The Kurt Lidtke Gallery is consolidating its operation into Seattle, and may sub-lease its space or use it for exhibitions, he said.

Brein said the theaters turned a profit last year for the first time, a year ahead of schedule, and this year is stronger still. He believes that parking problems are easing, as people get used to the concept of reciprocal parking.

“The city limited us to 117 parking spaces – we weren’t allowed to build more – and told us to find other spaces in the community,” he said.

Underlying the decision was the idea that, because the Pavilion’s greatest parking need is at night, it could share spaces with daytime businesses rather than building new ones.

“It was thinking outside the box, to make downtown something other than just asphalt,” Brein said.