The money trail

The sudden appearance of $800,000 raises suspicions at the Pike Place Market.

HOW DID A CHECK for $809,409 end up on Seattle City Council President Peter Steinbrueck's wall?

Everyone agrees that the cash originated at the Pike Place Market and was due to the city's coffers, but the process of its arrival is a subject of great dispute: Critics of the Market's administration compare it to Enron and call it "murky, murky, murky." The folks at the Market say it involved a complicated and protracted contractual negotiation and that every penny has been accounted for. Daniel Lieberman, executive director of the Market, says the whole process was "ethical, righteous, and in the best interest of everyone." Come along and see what you think.

The Pike Place Market is a weird creature called a Public Development Authority (PDA). City government set the Market up as an independent, nonprofit entity governed by its own 12-member volunteer council. The Market council hires an executive director, who oversees a staff of around 80 people, to serve as landlord to the Market's 200 commercial tenants, 300 residential tenants, and 350 farmers and crafts people who rent day stalls. Landlords are seldom popular, and the Market's administration, which everybody calls the PDA, is no exception. Add to the normal landlord-tenant friction the fact that the Market has to preserve its old Seattle charm while simultaneously watching its 21st-century bottom line. Mix in the passion that Seattleites feel about the Market with the very real mistakes made by the PDA in the past, and you have a volatile environment in which the sudden appearance of $809,409 is viewed with great suspicion.

And, like so many things in Seattle, it all comes down to parking. Parking is big business at the Market. The city of Seattle owns four parking lots in the Market area, and the PDA manages the lots in exchange for a cut. The projected 2002 take for those lots alone is $485,497, 6 percent of the Market's estimated $8 million 2002 total gross revenues. The city's cut for 2002 is expected to be around $187,505.

According to Joann Cowan, city government's PDA liaison, Shelly Yapp, who was the Market's executive director, decided in 1998 to stop paying the city its share of the parking lot revenues. Cowan explains, Yapp wanted to persuade the City Council to let the PDA keep all the parking revenues for development projects at the Market. But Yapp quit shortly after stopping payment. Yapp says she initiated a negotiation after the contracts expired.

The Market went through a series of interim directors until Lieberman was hired in January 2000. Cowan continued to try to get the money, but the Market wouldn't pay. "They refused to negotiate with us," she says. "I had to go down there and threaten them and say we were going to bid [the management of the city's lots] out. [Parking magnate] Joe Diamond wouldn't have gotten away with this."

The PDA's Lieberman has a starkly different account of the events. "I don't know of any demands or threats," he says. Lieberman describes instead "a convivial discussion on agreements on complex documents that spanned 14 years." He lays some responsibility at the city's feet for not pressing for the money more strongly. "If they never send you a bill, you may never pay them."

Cowan says after the city's budget went south, pressure began to build. "The city's finances took a drop and Steinbrueck and the mayor said, 'Give us our money!'"

Both Cowan and Lieberman agree that the PDA spelled out the money owed to the city on a line in their monthly books. But was that the right amount? They also concur that there were some people who thought the stated amount of the PDA's debt was too high and some who thought it was too low. Eventually, of course, it all came down to lawyers. The PDA's lawyer, establishment powerhouse Gerry Johnson of Preston, Gates and Ellis, worked out a "settlement" or a "resolution" with the mayor's counsel, Lynn Tangent, of $809,409. The check was delivered to Steinbrueck, who last month persuaded the City Council to use it for the development of another downtown hygiene center for the homeless. While Cowan and Lieberman insist that every penny is accounted for, it's difficult to reconcile that insistence on precision with the fact that there was a lot of disagreement over how much money was owed.

So is the city a patsy that can't collect its debts? Cowan certainly indicates the PDA has the city over a barrel. "It's a nightmare," she claims. "You don't want it in the papers that we are suing the Market. [And] it's not like you are a private landlord and you can just evict someone." She sums up her job starkly: "Doing public property management is a difficult thing because you are always walking the line between fiscal responsibility and the public good."

The Market's Lieberman says, "I feel confident no one could say, 'There is missing money.'" He adds, "My job is not to make anyone happy. My hope is that your grandchildren and my grandchildren have a Market that is much the same as today."

ghowland@seattleweekly.com

 
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