Not unexpectedly, the Seattle Monorail Project (SMP) is in a turf war with property owners as it condemns land for 19 stations. Though SMP, two years old, has yet to announce exactly how much it will cost to build the 13.7-mile Green Line and is still hashing out differences with its sole bidder, it is amassing land and rights of way in hopes of sticking to a planned opening in 2009. The agency has acquired more than $30 million worth of property, but not everyone is going quietly. The proprietors of the Denny's restaurant at 15th Avenue Northwest and Northwest Market Street, destined to be Ballard's main stop, for example, along with owners of a site on Second Avenue that will be developed as the showcase station for the Pike Place Market, say that SMP is taking more land than it needs. The Denny's owners claim that the excess is being confiscated so it can be sold at 20 percent profit by the financially troubled public agency. The Second Avenue property owner, Samis Land of Seattle, plans to build a mixed-use residential tower next to the Pike station with underground parking beneath passenger platforms. Samis and SMP hope to integrate their projects, but Samis has begun tossing around the F-word (as in "fraud") in court and is seeking legal discovery of the monorail's secret construction plans.
On the other hand, who thought the monorail would end up in a legal hassle over a piece of land owned by a company run by one of its own board members? The Denny Regrade site, planned for redevelopment as the monorail's Bell Street stop on Fifth Avenue, along the route of the present-day monorail, belongs to Clise Properties, a major downtown landowner whose president, Richard Stevenson, is a director of the SMP executive board. Clise's properties dot the downtown route of the planned starter line from Crown Hill to West Seattle, expected to cost from $1.3 billion to $1.5 billion. Clise, which is engaged in private negotiations with the monorail, is willing to give up the land for a price yet to be disclosed, but Clise's tenant in the building is objecting, saying it could lose up to $900,000 in investment.
That particular sale further underscores the ties between Clise and the monorail. Besides SMP's Fifth and Bell station site, where Clise controls three of the four corners of the intersection, the property firm owns more than $100 million in land along or near the train's planned elevated downtown route. That includes the Securities Building on Third Avenue, where SMP rents headquarters space from Clise at a submarket rate. Company owner Al Clise is an enthusiastic monorail advocate who most recently provided campaign quarters at a cut-rate $200 a month for monorail supporters opposing Initiative 83, the monorail recall initiative that failed in November.
Stevenson, who is also Clise's chief operating officer, is a voting member of the monorail's executive board, which must approve all land sales (most of it initially done in closed-door executive sessions). SMP says Stevenson's situation, as a businessman who could benefit privately from his public position, is not a conflict of interest. Stevenson has disclosed his dual roles and has "recused himself from all board votes on all downtown properties," according to an SMP statement sent last week to Seattle Weekly—leaving SMP in a kind of catch-22, since that apparently deprives the board of any decisive input from its property expert. Says Stevenson: "I think that's the right way to handle it." That seems at odds, however, with the letter, if not the intent, of Washington ethics law, which states that disclosing involvement is an exception if the public official has "only a remote interest" in the contract. (See "Elevated Interest," Nov. 19, 2003.)
Land records show the Fifth and Bell property, containing a one-story retail building, is assessed at $718,000, but the building's tenant, a health club, claims to have invested even more than that inside the structure, which, it also claims, it might lose. The Zum Health Club, owned by MEKKA, has leased the space since 2002. It was founded by two-time Olympic track-and-field athlete Peter Shmock, who specializes in high- performance training. Shmock, a former Mariners strength and conditioning coach, defines the Zum philosophy as "part Zen, part play, and part speed" and offers classes ranging from ballet to pumping iron. The 8,000-square-foot facility is stylishly decorated, with natural light, high-tech equipment, and a sand pit for strength development.
Neither Zum officials nor the monorail want to discuss the case because of their litigation. "We're talking. That's a good sign," says Zum's attorney, Bruce P. Babbitt. According to court papers, the club, under an 18-year lease agreement with Clise, claims it might not be entitled to "just compensation" if the sale to the monorail is completed. Since the deal is the result of a condemnation action by SMP against Clise, the club, as a third party, thinks it will be the odd man out. It lost a legal bid to stop the condemnation but plans an appeal to the state Supreme Court. "If this condemnation action is allowed to continue pending appeal," Babbitt says in court papers, "SMP will take MEKKA's property, demolish it, and begin construction of the monorail. MEKKA will be forced to move its health club and lose almost $900,000 in tenant improvements. . . . The irreparable harm to MEKKA's property could not be undone after a successful appeal." In a statement last week, the monorail said that "just compensation" applies only to property owners, but SMP will pay relocation fees and up to $50,000 in related expenses.
Meanwhile, at Second Avenue and Pike Street, Samis Land is challenging aspects of SMP's efforts to condemn two parcels worth $2.5 million and is preparing for a court hearing next month. Samis won a delay in proceedings so it can expand its pretrial discovery, saying it needs to know exactly what SMP plans to do with the property. SMP surprised Samis with its plans to take all, rather than portions, of the two parcels and to use a third parcel for a temporary construction easement, Samis claims. Losing both parcels would limit Samis' plans for a mixed-use development on the sites—two parking lots and an old hotel building on First and Second avenues, across from the Pike Place Market. The station and Samis' project will share some structural components, according to papers. Says monorail attorney Deborah Frausto: "No private uses for any portion of the property are contemplated by SMP." However, says Samis attorney Roxane Broadhead, "Serious doubts are raised as to the 'public use' and 'necessity' of condemning two-thirds more property than appears to be required for the proposed monorail station." In legal papers she says, "The existing evidence before this court raises serious questions regarding actual fraud and/or constructive fraud."
In the Ballard case, the Fiortio family, owner of the Denny's restaurant property at 15th and Market, says less than half the site is needed for a station and claims SMP intends to sell the remainder to a private developer at a 20 percent profit. SMP already paid an architect $15,000 to design a mixed-use development for the excess space and has hired a real-estate consultant for $20,000 to work on the deal, the Fioritos say in court papers challenging the sale. The monorail denies the taking is excessive and says recouping some costs of acquisition and construction could ultimately benefit taxpayers. No trial date is set.