Real Estate

‘Perpetual block party’ — Real estate companies and businesses sue City of Seattle over Capitol Hill protest zone

The City of Seattle is being threatened with a class action lawsuit brought by a collection of Capitol Hill real estate companies and developers, and a small group of 12th Ave businesses over Mayor Jenny Durkan and the Seattle Police Department’s response to the Capitol Hill protest zone, calling the situation “a perpetual block party.”

“This is not a step our clients have taken lightly,” lawyers at the firm Calfo Eakes write in a press release on the lawsuit filed Wednesday in federal court. “The rights of free speech and assembly are enshrined in our constitutional tradition, and our clients support protesters’ right to bring issues such as systemic racism and police brutality towards African Americans to the forefront of the national consciousness.”

The legal action comes as the size and scale of the protest zone has consolidated around 12th and Pine’s emptied East Precinct building after a weekend of deadly gun violence and a push from Durkan and SPD Chief Carmen Best to bring the occupied protest to an end “peacefully and in the near future” through community outreach and social services, not marching SPD officers into the zone in riot gear.

The firm says its clients “stand in solidarity with Black Lives Matter and the thousands upon thousands of people in Seattle who have peacefully protested” but “the City should not allow the right to peacefully protest and demand systemic change to manifest itself in acts of violence, harassment, and property damage, which has caused residents and small businesses to incur tremendous economic loss and instilled in them a fear to live and work in a neighborhood many moved to because of its history of activism, diversity, inclusion, and community-led investment.”

The class action lawsuit includes a complainant list made up of many of the Capitol Hill-focused and local developers and real estate investment companies that hold properties on the edges of the protest zone that has been the center of demonstrations and an occupied protest camp for weeks.

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They include Madrona Real Estate which owns and has developed mixed-use properties in the neighborhood and provides management services for many others, Redside Partners which like Madrona both owns and develops properties in addition to managing buildings like the Odd Fellows hall, real estate investor Stephen Romano who owns the 12th and Pike building home to the Unicorn, the owners association at the Onyx Condominiums just east of Cal Anderson and the Olive Street Apartments, a 12th Ave apartment building owned by Wanagel family.

Not currently represented are the massive national developers who have built or purchased many Pike/Pine properties like Maryland-based ASB Real Estate Investments that purchased the 11th and Pine Sunset Electric building and Madrona Real Estate-developed REO Flats on 14th Ave or Alliance Residential that built the massive Broadstone development at 10th and Union.

Madrona’s Brad Augustine says the point of the lawsuit is “the little guy.”

Augustine says the complainants support the protests but the mayor’s decisions to allow the camp and SPD’s exit from the neighborhood “isn’t good for the little guy on Capitol Hill and the little girl who is trying to run a small business.”

“This is 100% about the little businesses on the Hill. We are seeing tenants not renew leases because they don’t want to be in Pike/Pine,” Augustine said Thursday morning.

“It’s probably not CHOP’s doing. It’s the collateral damage of CHOP.”

Since its formation in the exit of police from the East Precinct building and the barriers at 12th and Pine on June 8th, the camp was celebrated as a center of protest and also for its art and community even as there were reports open-carry enthusiasts joining the crowds and a regular presence of armed sentries posted around the area as part of camp security. The city worked out a new layout plan with protesters to better open the area to traffic and emergency vehicles. Meanwhile, there was growing unease about Seattle Police’s limited presence in the zone around 11th and Pine and Cal Anderson Park and growing criticism that the camp’s purpose of occupying the area and the “Seattle People’s Precinct” was overtaking greater Black Lives Matter goals.

There was also tragedy. Early Saturday, one man was killed in a shooting at 10th and Pine. 19-year-old Renton High student Lorenzo Anderson died in an incident that has become a flashpoint of controversy with police restricting their presence in the area following the emptying of the East Precinct headquarters and Seattle Fire’s limited abilities to respond without police presence.

A larger cluster of tents has risen around the 12th and Pine precinct building that remains covered in plywood and graffiti and surrounded by the large cement barriers placed by the city to help maintain vehicle access through the area. Graffiti, tagging, and art covers everything including the park’s large Water Mountain feature and reservoir pumphouse. Area buildings and businesses will also face massive clean-up jobs ahead. A large group of tents remained in Cal Anderson, meanwhile, where many homeless and unsheltered people have taken up residence. Organizers Wednesday night were encouraging campers to move to join the group at 12th and Pine.

Complaints about disorder and chaos around the zone continue. Wednesday night, a long and tense episode involving a man reportedly suffering a mental crisis and being pursued by CHOP security was finally brought to a safe conclusion on a roof above 12th and Pine.

Leading the local developers, Capitol Hill-based Hunters Capital owns the office-filled Ballou Wright Building that neighbors the East Precinct building on 12th Ave.

“When you cannot get basic services to business owners and employees such as 911 response or garbage or deliveries, along with the barricades blocking the streets, the noise through the nights and crime ramping up in the area and all this on the heels of COVID – it’s been really tough for those living and operating in the area,” Michael Oaksmith, head of development at the company, said.

“We – the local small business community in and around the CHOP sincerely believe that peaceful protest and the message of those protests should continue, but in a way that does not attract violence and hurt our core neighborhood or small business owners livelihoods,” he said.

A collection of 12th Ave businesses is also included in the list of complainants including 12th and Pine’s NW Liquor store, the colorfully muraled Richmark Label that has provided a backdrop for much of the activity on the northeast corner of 11th and Pine, Sage Physical Therapy, and a 12th Ave tattoo artist at Tattoos and Fortune.

Oaksmith said he believes the group will grow. “I know of at least a dozen more street retailers that wanted to be involved, but are choosing not to yet for fear of retribution or their stores being vandalized,” Oaksmith said. “People are very scared after four shootings in one week and the stories of 911 calls being ignored unless your life is being threatened is a reality most small business employees don’t want to live in anymore.”

As a class action lawsuit, the action could end up representing “thousands,” lawyers at Calfo Eakes write in the complaint:

All persons or entities who own property in, have a business in, or reside in the area in the City of Seattle bounded by the following streets: Denny Way, Union Street, Thirteenth Avenue, and East Broadway. This definition excludes the City of Seattle and any departments or agencies of the City of Seattle, including the Seattle Police Department.

Also included in the named plaintiffs are Car Tender and Bergman’s Lock and Key, two businesses set to be demolished in the next year as this development to create a five-story, 61-unit, mixed-use apartment building with “sun screens,” a streetfront restaurant, and “a generously planted” courtyard moves forward. Car Tender owners Russell Kimble and John McDermott agreed to sell their property in a 2017 deal for $7.6 million.

The lawsuit includes details of damage and financial impacts from the protest zone. The liquor store says sales are down 70% while Richmark Label provides a lengthy account of challenges for its delivery drivers, damage to its building, and harassment from CHOP participants. Car Tender, meanwhile, reports a 40% drop in revenue over recent month when the COVID-19 crisis was already draining business.

The Car Tender has already played a major role in the CHOP story in an incident involving the garage ownership holding off a hostile crowd of protesters at gunpoint over an arson and burglary suspect caught in the act inside the 12th Ave auto garage and storage lot as Seattle Police refused to enter the protest area.

Madrona Real Estate, meanwhile, makes the case that its small business tenants cannot reopen while the CHOP exists:

The firm also says issues like delivery drivers refusing to make Amazon deliveries are contributing to hardships in the neighborhood.

“Our clients had no option but to file a lawsuit because their repeated complaints to the City have fallen on deaf ears,” the law firm’s press release states —

For more than two weeks, and with the full knowledge and participation of the City, our clients’ neighborhood and properties have been blocked, barricaded, occupied, and vandalized. Ever since the City abruptly abandoned the East Precinct on June 8, 2020, our clients have had to deal with constant harassment, loss of income, property damage, and an inability to safely enter or exit their homes and businesses. Our clients’ lawsuit seeks to end the City’s unprecedented decision to allow and endorse a private occupation of an entire neighborhood and leave it unchecked by the police.

The City of Seattle has not yet responded to the lawsuit.

A letter from Calfo Eakes gives Durkan and the city until Friday to answer a set of questions about the situation or face a threatened injunction to “compel the city to disband CHOP and staff the East Precinct” or “otherwise discontinue the constitutional and statutory violations engaged in by the city.”

In the lawsuit, Calfo Eakes says the city has not followed due process, created a legal nuisance, made an “unlawful gift” of city property to the demonstrators, and violated rights with the “taking” of private property.

“The property owners, businesses, and residents in the area suffer ever-increasing property damage and economic loss every day that CHOP exists in their neighborhood, all because of the City’s active support, encouragement, and endorsement of the occupation,” the legal complaint reads:

In particular, Seattle Mayor Jenny Durkan has provided the CHOP participants with not just tangible resources but also a de facto stamp of approval. Her tweets, interviews, and other statements have made it clear that the City is fully aware of what is happening, has no plan or timeline for remedying the ongoing harm, and in fact views the occupation of Capitol Hill as something akin to a perpetual block party.

As for potential monetary damages should the class action move forward, the firm has not yet replied to CHS’s questions about the lawsuit.

UPDATE 4:40 PM: A resident in a Hunters Capital building sent CHS this message from the developer that was sent to tenants Thursday. The message also contained a copy of the letter sent to the mayor’s office reported on by CHS:

Hunters Capital along with several other neighborhood business owners and property owners in the CHOP zone of Capitol Hill filed a Class Action Lawsuit against the City of Seattle yesterday evening.  This is not a step we have taken lightly and only pursued after weeks of emails to the City expressing serious safety and wellness issues brought to us by many tenants and residents were met with silence.

The City should not allow the right to peacefully protest and demand systemic change to manifest itself in acts of violence, harassment, excessive noise and property damage.

The Mayor and CHOP organizers have publicly stated that it is time to take this protest on-line and to other areas, but a large group remains as do street barricades. We want to ensure the mayor follows through on her statements.

Attached is a letter to the Mayor we would like to share with you, outlining the deliverables the suit seeks.

It is important for us that you know Hunters Capital fully supports the Black Lives Matter movement and the aggressive reform of the police.  We have and continue to support organizations whose missions align with anti-racism, equity, and work to elevate marginalized communities, especially people of color. These organizations include: Capitol Hill Housing (now Community Roots Housing), Seattle Central College, Northwest African American Museum and University Beyond Bars. This alone is not enough, and we are working on ways we can support the Black Lives Matter Movement directly and in an on-going fashion.

If you have questions or would like to discuss, I am available for you anytime.

UPDATE 6/27/20 3:10 PM: The mayor’s efforts to clear portions of the CHOP camp by Sunday morning appears to have satisfied the legal team behind the lawsuit — for now. In a letter sent Saturday to the City Attorney’s office, the firm writes that it is holding off on further legal action pending the mayor’s Sunday morning deadline to clean up CHOP but allow campers to remain at the East Precinct:

Given Mayor Durkan’s representations to the protestors that the City will make substantial progress toward removing barricades on Sunday morning, we will certainly wait to apply for injunctive relief unless it becomes clear that the City is unwilling to follow through with its plans. Our clients were disappointed in the City’s token effort to remove barriers and take other actions on Friday morning. We hope the City acts with greater resolution on Sunday morning and thereafter.

As for the demands for more information and plans from the city, according to the letter, the City Attorney’s office didn’t provide much information:

In our call yesterday, we asked you for the City’s response to our letter to the Mayor. You stated that you were not in a position to state whether the City had a specific plan relative to CHOP, and, even assuming the City did have such a plan, you said that you would not disclose any details because doing so could endanger City employees by giving notice to the protestors, who might then obstruct the City’s effort. Considering your representation, we offered to enter into a confidentiality agreement under which we would be prohibited from disclosing to the public or any third party the City’s plan or its timeline. You stated that you would consider our request but that it was highly unlikely that the City would agree to make disclosures even pursuant to a confidentiality agreement.

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This article was originally published on CHS Capitol Hill Seattle News

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