Darcy Hanson didn’t believe in ghosts — that is, until she took over a supposedly haunted restaurant.
The former nonbeliever said she’s experienced all kinds of paranormal activity in her 15 years running Merchants Cafe and Saloon in Seattle, Washington. Faucets and fans have turned on by themselves, faces have appeared where they shouldn’t be, and she believes she even contracted a rare infection from a ghost.
Merchants Cafe and Saloon is now a lively restaurant and bar with a hotel on its upper floors, but the building’s history spans back before the Great Seattle Fire of July 6, 1889, according to History Link.tours. Originally built out of wood by John Hall Sanderson, it was rebuilt in brick as part of the Sanderson Block Building, with a liquor emporium and cafe at street level and two floors of hotel above.
In 1892, the building was sold to Charles Osner, who made the first floor the Merchants Exchange Saloon and the upstairs room a brothel. Capitalizing on the amount of lonely lumberjacks and gold miners in the area, Osner imported women into Seattle and housed them on the upper floors, calling them “seamstresses.” Framed paintings of the women were at the back of the saloon, essentially acting as a menu for the men to choose who would “hem his trousers,” according to Merchants’ website.
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Osner’s wife, who grew up in a convent, wasn’t happy with the ways Osner chose to make his money, according to Hanson.
“She always tried to get him to quit,” Hanson said. “And then finally she got what then was called consumption. It was tuberculosis. And she died. She died pretty young.”
That wasn’t the only death: The manager of Osner’s business contracted black syphilis from frequent visits to the brothel and died in an insane asylum, according to Hanson.

Despite such an eerie past, Hanson said she wasn’t fazed taking over the lease.
“I didn’t really believe in ghosts, so it wasn’t scary for me,” she said. “But then it kind of got a little scary.”
After closing the restaurant by herself one night, she went to the bathroom. While in the stall, she recalls the water coming on “full blast in the sink.”
“I was pulling up my pants running up the stairs,” she said. “There’s no way that should have happened.”
The face in the window

Hason recalled that during that pandemic, a guest had smoked marijuana in Room 301 above Merchants. Since the room was vacant for the next four days, she decided to leave the window open to air it out. During that time, a girl took a picture of Merchants to send to her mom, who lived in Maryland and was a fan of the show “Dead Files,” which had aired an episode on the haunted restaurant. If you zoom in to the right of the open window, “It’s the creepiest thing I’ve ever seen,” Hanson said.
In the picture, there appears to be a person in the window; however, Hanson maintains no one was in the room, and to enter the room you need both the code to get above Merchants and another code to get into the room.
The doll
Another eerie story Hanson recalls is that once an older man came into Merchants and handed her a ballerina doll, asking her to put it behind the bar.
“I said, ‘Oh yeah, you want me to hold it for you?’” she said. “And he said, ‘No, it’s for the girl downstairs.’… I’m like, ‘Oh, OK, you want me to take it down to her?’ He said, ‘No, she’ll be coming up to get it.’”
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In fact, two small children had died in a fire in the basement of Merchants in 1938. After Hanson put the doll away, the man was mysteriously gone. The next time Hanson brought her young grandson with her to work, he instinctively took the doll and brought it into the basement, laying it on the brown couch. The next time he came in, he did it again. Later, a group of guests came into Merchants, and Hanson recalled one of them saying, “I’m really sensitive (to spirits), and there is a little girl on that brown couch downstairs.”
Unexpected illness
During the filming of “Dead Files,” Hanson suddenly fell extremely sick. In less than 24 hours, she went from no symptoms to being in the hospital.
“I had right-sided bacterial pneumonia, and it got into my blood and infected my heart, so they had to shoot antibiotics into my heart every day at the same time,” she said. “The lady on ‘Dead Files’ said that the wife that died was trying to kill me. The lady said that she picks on people that are weak, and she’ll try to kill them.”
Hanson recovered, but a regular of hers wasn’t so lucky. A Merchants customer who worked at a bar a block away would often come in two or three times a week after a shift and have a vodka cranberry and some food, she said. He was in his mid-twenties. Eventually, he stopped coming. After two months without seeing him, she asked his regular customers what happened.
“They said, ‘Darcy, John’s dead. He got bacterial pneumonia, and he didn’t have money to go to the doctor, and by the time he made it to the hospital, he only lived 12 hours,’” she said.

Hanson feels that there’s a strange energy at Merchants, but she also feels she can’t leave the business. At 68 years old, there’s not many other opportunities for her to continue to support her 15-year-old grandson, who she has custody of. She said Merchants isn’t very profitable, but the hotel upstairs is, and the lease can’t be split.
At Merchants, the menu varies from season to season, and it aims to stay as local as possible, Hanson said. For example, the beer-battered cheese curds dipped in honey are made with local Beecher’s Cheese.
Signature cocktails include Sleepless in Seattle, made with vodka, huckleberry syrup, lemonade and a Champagne float, as well as Pioneer Square Punch with rum, mango liquor, orange juice, pineapple juice, cranberry juice and soda water.
She said she thinks the haunted element of Merchants actually helps business, as guests often ask bartenders what eerie experiences they’ve had working there. But for the most part, she said she avoids spending too much time at the restaurant and is keeping her focus on the hotel.