Fire crews responded to the scene, at 10 Front Street, at about 2:40 a.m. Saturday after receiving a report of flames and smoke billowing from the structure, which houses the Downriggers Restaurant and several other businesses.
As the first firefighters battled the blaze, more crews were brought in by ferry from Anacortes and from Orcas and Lopez islands to aid in the firefighting effort.
"There were flames at least 20 or 30 feet high coming out of the building at one point," said Carolyn Hudson, spokeswoman for San Juan Island Fire & Rescue.
She said the building appears to be a total loss.
Crews continued to battle the blaze several hours later in an attempt to keep it contained to one building. Hudson said firefighting efforts would continue all day long Saturday.
There were no reports of injuries.
Other businesses in the building include Friday Harbor Marine, Friday Harbor Yachts, San Juan Safaris and San Juan Excursions.
"This is a very big hit. Downriggers (Restaurant) employs about 50 people, so that's a big economic loss for the community, and that restaurant has been there for many years," Hudson said.
The cause of the fire is unknown, she said.
Officials said the Port of Friday Harbor will seek other places for those businesses to establish their operations. San Juan Excursions' whale watch boat, the Odyssey, has been moved to a different slip.
"Our office is gone but our business and boat survived. We're still running daily trips," said Pete Ancich of San Juan Excursions. "Thank you to all of the fire fighters and island folks who helped this morning. We live in an amazing place."
"It could've been a lot worse," added Brian Goodremont, owner of San Juan Safaris and U.S. president of the Pacific Whale Watch Association. "There was no damage to our equipment, and since it happened in the middle of the night, we had no staff there, no one got hurt. All in all, we were remarkably fortunate."
Goodremont says that temporary offices for both San Juan Safaris and San Juan Excursions are now being set up adjacent to the site, and whale watchers should have no trouble booking trips.
Port Director Marilyn O'Connor said the Port of Friday Harbor also is evacuating Spring Street Pier, one of four piers there, so that booms can be placed to minimize any potential runoff from the firefighting efforts.
While firefighters continue to fight the blaze, boaters staying in the port will need to take the stairs above the port offices to access the town of Friday Harbor.
Sailings of the Washington State Ferries also are expected to be delayed. Ferry off-loading will be on East Street.