He's not yet officially out of contract, but Diario Hoy is reporting that Alvaro Fernandez' situation with Gimnasia is tense. The manager sees no future with the player. Until a new contract with someone is reached, Flaco will train with the Argentine team's reserves.
When first reported that Fernandez could be on a free, Sounder at Heart's Jeremiah Oshan suggested the Sounders should sign the player. Diario Hoy thinks that is a possibility.
With Fernandez, who could continue his career with the Seattle Sounders
-translation by Eric Quintana of Dirty South Soccer
"Con Fernández, quien podría continuar su carrera en el Seattle Sounders FC de la MLS"
Quintana goes on to clarify to Sounder at Heart via chat: "The tone makes it seem like he could go to Seattle but things are tense between the player and current club."
Fernández was only a DP on his first stint with Seattle due to the DP rules at the time requiring a transfer fee to be amortized over multiple years. His salary was at 300,000. Now, as an older player no longer in Uruguay's National Team picture, that salary may be a bit high. It appears he would be on a free.
Since leaving Seattle he has played as a box-to-box midfielder with some time out wide, and even up top. He was infrequently used in Gimnasia's 2016 season, but some of that was due to injury.
If anything, Flaco would be a value buy for Seattle at this point in his career.