Capitol Hill building owner objects to ‘economic eviction’ accusations

The Celeste was originally known The Allen (Image: King County)

The Celeste was originally known The Allen (Image: King County)

A dispute between tenants of a 109-year-old Capitol Hill building and the building’s new owner was thrust into the spotlight last month when City Council member Kshama Sawant said the situation was an example of why Seattle needs stronger protections against “slumlord” rent increases.

Tenants at The Celeste say the The Stratford Company owners are engaging in “economic evictions” by drastically increasing rents to force people out so the company can renovate the building. One tenant told CHS rents were increasing by $500 for units that were renting for under $1,000 a month.

Stratford’s regional manager Julie Medina pushed back against the economic eviction claims on Tuesday, telling CHS that tenants don’t understand how financial constraints and market pricing work.

“The old owners never increased rents and all we did was bring it to market rent,” Medina said. “You tell me where you can rent a unit on Capitol Hill for $800.”

According to county records, the Project S7 company owned by real estate developer George Webb purchased the 304 E Olive Pl building for $2.4 million in June. Webb’s Stratford Company owns 17 buildings across the Puget Sound, mostly small, older buildings.

On Tuesday, Sawant said that she was aware of tenants complaints at the Celeste and her office would be working with the Tenants Union to help resolve it. Medina said the real culprit for the rent increases is the old property owners as Statford is now being forced to pay for much-needed repairs.

Among all the housing upheaval on Capitol Hill, it’s not always clear how one specific landlord or building comes to represent a broader issue. In addition to one Celeste tenant that’s “stirred up” controversy about not being able to break a lease, Medina said Stratford is a victim of unfair scrutiny commonly heaped on companies that purchase and renovate older buildings. Longtime mom-and-pop owners may have well established relationships with their tenants, the type of relationships Medina said large corporations don’t forge.

“We have to make a quick judgement based on our bills,” Medina said. “We don’t have time to get to know your backstories.”

Recently, tenants of the building saw a water shutoff notice from Seattle Public Utilities posted due to delinquent payments. Medina told CHS it was an accounting oversight and the issue was resolved this week. Still, tensions between the tenants and Stratford persist.

“We haven’t been able to get in touch with management,” tenant Breckenridge Lanning told CHS. Lanning and others are currently working with the Tenant’s Union of Washington State to form a tenant’s association, a move that Medina said Stratford has no problem with.

Stratford also manages buildings including the Melrose on the Hill at 1620 Melrose which it purchased in 2006 for $4.5 million before flipping ownership of the building to the Diamond Parking company for $10 million in late 2014. The company also owned the project to redevelop the site of the old Marion Apartments at Pine and Bellevue before the completed six-story apartment building was sold to national apartment developer Equity Residential for $36.1 million in spring of 2014.

The rapid pace of new construction and turnover of older buildings has many Seattle officials claiming housing affordability has become a full-blown “crisis.” In a city booming like Seattle, Medina said rising rents are to be expected, and that means some people will no longer be able to afford it.

“You have that opportunity to go out to Shoreline and other areas. The transit system is awesome in Seattle,” she said. “Lake Forest Park, you’re 15 minutes from downtown on a bus.”

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56 thoughts on “Capitol Hill building owner objects to ‘economic eviction’ accusations

  1. This woman is just as delusional as she is accusing her tenants of being if she thinks public transportation in Seattle is “great.” Hopefully it is going to be great, but it is not great now. I just moved to Wallingford from the hill and commuting by bus to my job on the hill would be over an hour. THAT IS NOT GREAT.

    Also, I have never before lived in a city with so much “If you can’t afford it then get out” sentiment. I grew up in NYC in the 80s and 90s and lived there as an adult for 5-6 years. NYC is obviously more expensive than Seattle (but I wonder for how long this will be true!) and while it did become an enclave of the wealthy, I never remember anyone saying “JUST LEAVE, POOR PEOPLE!” Part of what makes cities great is having all kinds of people contributing to the community. Telling poor and at this point, middle class people to move to Shoreline is ridiculous. And people who say that shit should be careful because eventually most of them are going to be priced out too (see Manhattan) and it’s not so cute or clever when it happens to you.

  2. I call bullshit on Ms. Medina and The Stratford Company. To date, I have three friends (3!) who have been displaced by this heinous group in just the last few months. They’re economic bullies, plain and simple, happily purging long-time residents so they can gouge new, higher-paying tenants. They clearly don’t have a shred of compassion or notable humanity. Why, they’re practically the face of greed and evil in the current rental landscape. Do not buy into Ms. Medina’s clearly myopic nonsense. If you’re in the market for an apartment to rent do yourself a favor and avoid anything with “Stratford” on it.

  3. “Lake Forest Park, you’re 15 minutes from downtown on a bus.”

    Sounds like someone who has spent a lot of time trying to sell an apartment in Lake Forest Park, and absolutely zero time riding a bus anywhere.

    I cannot understand the level of ignorance one must have about transit to make such a claim.

    • I was displaced from Capitol Hill to Lake City partly for economic reasons. Lake City is closer to downtown than Lake Forest Park, and a 15 min commute from Lake City to downtown would only happen in rare optimal traffic. Bus rides on the fastest express (the 522) often take 45 mins or more (and that’s the same bus you’d take from Lake Forest Park). These people do not know what they are talking about.

  4. Oh man, best laugh I’ve had in forever. Lake Forrest Park to Downtown in Fifteen? At 6pm you can’t make it to cap hill in fifteen minutes. Truly, a stupid stupid comment.

    • Not everyone has the cash up front to buy a condo in today’s Seattle Market. Hell to move into a new apartment you need a minimum of $2500-$3000 up front to move in. Most of the people in our building were working class, living paycheck to paycheck. They were your bartenders, your baristas, your grocery store clerks. One was a super sweet elderly woman who luckily moved out before we got the rent increases. Two of the tenants were single families barely making ends meet. This whole attitude of “if you don’t like it get out” “move somewhere more affordable” doesn’t work in every situation.

  5. Ms. Medina does not understand that Seattle was built by having a strong middle class! Boeing and many other companies were born here. To basically infer that if you are not wealthy you should just leave is ludicrous. I think we should send Ms. Medina and Stratford a message City Council; Economic Evictions are wrong and maybe its time to investigate the building for violations and make the landlords pay!

    • “Ms. Medina does not understand that Seattle was built by having a strong middle class! ”

      This is true of most of the country, but it’s also true that the middle class is dying out in most of the country. There are few jobs between tech and service.

  6. Ms. Medina comes off as abrasive and dismissive. Perfectly fits the narrative of the greedy landlord.

    That said, it doesn’t make her wrong. Just because you’ve rented somewhere for a period of time, doesn’t mean you can always rent there at a price of your choosing. That’s the risk with renting. Building owners can choose to tear the building down, convert it to condos, etc. Renting has benefits and gives flexibility, but in exchange, you always run the risk of having to move when that lease is up.

    • Truth.
      Remember all those dire warnings from the anti-Prop 1 side, that said your rents will go up with higher property taxes? No– the taxes haven’t instantly gone up already, but they’ve been going up steadily for several years. It’s amazing people haven’t already seen big rent increases. Please don’t tell me you haven’t seen it coming– you’ve bragged to your friends for years how cheap your rent has been, and you wondered how much longer it would last. Tell me you haven’t– I’ll tell you you’re full of shit. Of course the place is falling apart. And it didn’t get that way in 3 or 4 months.

      Does anyone seriously think a $500/mo rent is sustainable when buildings get sold for $2.4 million?

      • Not a single tenant in our building was paying $500 a month rent. I believe that $800 was the lowest. The highest I think was $1150. Still super cheap for the neighborhood, but the previous owners wanted it that way.

        This is on their website, “Since 1970 Harold and Ellen Peterson have owned and operated their small family business. Providing affordable apartments and houses in the great locations. Along with their daughter Celeste, we make sure that everyone feels at home with Us.”

  7. Greed, blind greed. The real estate game is the wood alcohol drinking corner of the business world. Housing should not be a market commodity. Whatever the better path on housing, what is happening in Seattle is happening in varying degrees in much of the first world.

  8. Even if you accept Medina at face value, Are we expected to think that after acquiring the property the repair situation was a surprise? That there wasn’t ample opportunity to approach this in a civilized fashion? That, after accessing the property and the inevitable perceptions of tenant abuse, they were forced into the deal and unable to walk away? That the poor, misunderstood Stratford Company is the victim here? PR by rubes.

  9. “You tell me where you can rent a unit on Capitol Hill for $800.”

    a decade ago or present day apodment. this neighborhood is screwed

    • Yes, it’s really painful when a place you’ve always lived is no longer affordable and you have to move. I also wish that good beers weren’t so expensive, that cars didn’t cost so much and I really liked it when gas cost about 50 cents a gallon. What do you do? Adapt. Buy cheaper beer or less of it. It becomes a luxury item. What about a car? Make tough decisions about whether you really need one. Gas, drive less. Apartment is too expensive? Get roommates, move further away or maybe find a job that pays better. Those are things you control. These are first world problems.

      • I prefer just pricing everyone out. I’m a high paid worker at a massive employer located just down the. I don’t even have to worry about overpriced beer!

      • Of course he’s joking– but do you seriously think all the highly-paid tech workers will really go away? And what– Capitol Hill will go back to the “good old days”, everything will be cheap again, and artists and baristas will out-earn everybody?

    • No one who has an $800 apartment on CHill is going to talk because there are a few of those gems left due to human landlords who aren’t out to slash and burn everyone possible.

  10. “We have to make a quick judgement based on our bills,” Medina said. “We don’t have time to get to know your backstories.”

    YOUR BILLS!? The fact of the matter is we have received two notices that our water would be turned off, one of which gave us 48Hrs notice, and was a final notice! Your bills are not getting paid. The tenants who have not been grandfathered into leases have been paying an additional expense for water since Stratford bought the company. WHERE HAS THAT MONEY GONE!?

    Additionally, you tell me to move to Lake Forrest Park? I grew up on Capitol Hill. This is my home. I don’t care about the rent increases, I care about the way that we are being treated as tenants. That is why I want to leave. I have been asked to be let out of my lease, Stratford has not been accommodating. I gave them the opportunity to let me out of my lease and raise rents. They will not corporate.

  11. Get over it people. Capitol Hill is close to the business district so it is prime time real estate. Just shut up and move somewhere more affordable. You’ll have forgotten anything bad happened in 6 months and in a few years new businesses will have opened in your new neighborhood to serve you and everyone else who had to move somewhere less appealing. Life goes on.

  12. What neither Ms. Medina nor the article mention are these facts: (1) George Webb and Anna Deliganis, M.D. (his radiologist wife and co-owner through an LLC) have not paid the water bill since the property was purchased in June and that Final Notice of Water Shut Off for November 12 (this Thursday) were posted at the property on Monday; and (2) the tenants were threatened with a mandatory “vacate and close” order from DPD if this happened. The latter would have forced the tenants out of their homes as early as next week. The tenants were home packing this afternoon. (3) No one at the Stratford Company has answered the phone or responded to the tenants. (4) Dr. Deliganis also did not answer her phone. (5) There are only a handful of tenants left in the building because Stratford has pressured others out – probably in order to execute on the permit to expand the building (which has been issued by the city but has been frozen for undisclosed reasons). Deliganis and Webb in their personal lives are contributors to the Evergreen School and Social Venture Partners. I wonder what those organizations would say if they could see behind the curtain of this couple’s life. Note: all of this information is publicly available and the Webb-Deliganis family lives in Shoreline where Ms. Medina encourages their Celeste tenants to join them. The irony is delicious.

      • “The company owes Tacoma $41,000 for an engineering study it completed when Stratford failed to do its own. Water and electricity have been shut off to the building, and the company hasn’t paid Tacoma Public Utilities $1,100 in outstanding charges.”

      • They refused to pay these tenants water bill until they were pressured into it by phone calls from lawyers and city officials who reminded Stratford how expensive it would be for them if the tenants were evicted due to an uninhabitable living environment (relocation assistance). It all comes back to the original article. They want these tenants out so they can renovate and raise rent even higher.

      • Good research. The Stratford Company is led by the current owners of the Celeste, radiologist Anna Deliganis, M.D. + George Webb, see the company website quoted below.

        http://www.thestratfordcompany.com/prev/team.html

        The Stratford Company is led by a team of experienced real estate, development, finance, design and marketing professionals. Our hand picked team of business-minded, multi-disciplined talents is uniquely qualified to apply rigorous analytics and creativity to the identification of exceptional project opportunities capable of achieving superior investor returns.

        George Webb, CEO
        george@thestratfordcompany.com
        George is responsible for all company results and serves as the Chief Investment Strategist for The Stratford Fund. He has over 15 years of real estate experience and has raised and deployed over $20M in real estate equity since 2000. George is a Stanford University alumnus and a proven corporate leader, having served across product development and business leadership roles in online real estate & other areas at Microsoft prior to founding The Stratford Company.

        Anna Deliganis, Vice President, Investor Relations
        anna@thestratfordcompany.com
        Anna handles investor relations for The Stratford Company. She is a Stanford University alumnus, who also received her MD from the University of Washington and is a board certified radiologist. Coupling her rigorous MD training with 15 years of real estate experience in the Puget Sound region, Anna brings a unique mix of discipline and pragmatism to the Stratford leadership team.

        I am left wondering what Anna Deliganis’s “rigorous MD training” taught her about the basic human need for clean water and workable plumbing.

        This is their modus operandi in the region, apparently. A quick search for their names shows that decrepitude and neglect follow in this couple’s wake.

        *
        http://caselaw.findlaw.com/wa-court-of-appeals/1565328.html
        * http://www.capitolhillseattle.com/2011/03/charred-tagged-and-empty-bellevue-pine-apartments-to-be-torn-down-for-redevelopment/
        *
        Can Tacoma’s Old City Hall Be Saved?
        That’s the question a city council member is asking after thawing pipes broke last week and further damaged the 117-year old building. The News Tribune’s lead story today details worries the building may go the way of other historic structures the city’s lost to neglect:
        City Councilman David Boe has been trying to sound the alarm about Old City Hall for over a year. An architect, he keeps his office kitty corner from the 117-year old Italian Renaissance tower. That has given him a daily impression of the condition inside. “Ripped canopies, boarded-up windows, birds living inside, which implies other things living inside,” Boe said.
        Two building tenants are unable to use their offices because there’s no heat or power following the massive pipe break that sent 30,000 gallons of water through the building.
        Old City Hall is owned by the Stratford Company of Seattle and is in financial trouble. The Trib spoke with Stratford CEO George Webb who says damages from the pipe break is still being assessed. The building’s money problems may be much bigger:
        Webb said the financial situation with the building is unchanged. He is negotiating with Union Bank to address a threatened foreclosure of a loan the bank inherited when it took over Frontier Bank.
        (2010) http://www.kplu.org/post/tuesday-mornings-headlines-1 City manager Eric Anderson is expected to brief council members at noon today about any options the city might have to intervene.
        http://www.thestratfordcompany.com/prev/team.html

  13. “Let them eat cake–in Shoreline.” Ms. Medina (named after the toniest area in Seattle?) sounds like a predatory hatchet man for scumbags. Can you get lower? A “mom and pop” business that flips buildings for $36 mil? Wish my mom and pop had done that.

    Yes, rents have to go up, but in case you missed it that’s not the issue: Webb and Deliganis are trying to evict the tenants by not paying the water bill.

    If that happens, Seattle Department of Planning and Development evicts them from an uninhabitable building; the law says you have to have water. The tenants had been given a 72 hour notice until Webb and Deliganis were pressured into paying the delinquent bill so they wouldn’t have to pay tenant relocation fines. This seems to be a pattern for Webb and Deliganis. See Tacoma News Tribune, “Tacoma City Counsel to vote on $4 million City Hall purchase” 6/1/2015.

    I’ve been a renter, homeowner and landlord in Seattle and these are the people that slime the business of being a landlord. I would think a doctor would have some in-born decency for her neighbors. I’m sick they could treat people this way. But I wouldn’t want to find myself on her exam table.

    • Great, well-written post. You are a prime example of a terrific landlord in contrast to this “Medina” slumlord. And I, too, shudder to think that this woman is a doctor.

    • But the Mom and Pop owners were the previous owners, not these current slimy ones, who appear to run a fairly large and unscrupulius business.

  14. Just look a little South where the Stratford Company almost destroyed iconic Old City Hall in Tacoma over the last decade, while trying to pimp this beloved building out. They are deferring maintenance to Tacoma’s Washington Bldg now, even though taxpayers just paid them 4 mIllion dollars to let go of Old City Hall.

    I say picket their offices or personal homes. Shame is often an effective motivator.

  15. This company should be banned from any building ownership in state of Washington. The people of Tacoma will never forget how web evicted tenants of old city hall and almost neglected the iconic building to a point where it was literally crumbling into the street… Holding our history hostage for millions dollars of ransom! Webb is a blood sucking vampire!!! Sunlight is the cure

  16. I lived in the Celeste since 09 and loved it. I did get the notice that my rent was going up 600+ a month. I do admit that my rent was under market but it also wasn’t worth 1600+ a month. I am also shocked they didn’t offer me a smaller unit to keep me in the building, they just wanted all of me out.

    Here is proof that The Stratford Company’s market value/ rates were well above what they charge for other locations they own. $1250 (has W/D in unit) > 1620 Melrose Ave / Melrose on the Hill.

    http://seattle.craigslist.org/see/apa/5310430794.html

    The Stratford Company <3 #14

    • OMG! That apartment is SO much nicer than the ones in the Celeste!!! Washer dryer in unit and everything, and less than what they want to raise your rent to!

      I have friends who have lived there in years past, so I’ve actually been inside, it’s a shit show. Super dirty in the hallways and common areas, the washers and dryers rarely work, and never work well..

      Julie Medina has found herself in the midst of a PR nightmare, she’s lying about things to make her company sound better, and it’s just making her look worse… Also has anybody looked up Kimberly Guadalupe the Regional Manager prior to Julie Medina? She sounds just as bad, if not worse! This company has a history of hiring horrible human beings.

      I don’t know how they sleep at night… (apparently not well as their former CEO committed suicide, not a dig, but people ask what drives somebody to suicide… maybe it is the lack of compassion and human decency).

      • Yeah, a good friend of mine worked for them YEARS ago and spilled all the horrible things they do. I guess they used to be the The Stratford Group and changed the name after all of that happened actually.

        Your welcome Julie for catching that awesome lie of yours. I hope all of our stories make it even more public.

    • It seems like you got a raw deal after being a long-time tenant. I am researching the building/owner’s history and would love to hear more about your experiences. If you would be kind enough to discuss this in further detail, please email me at kirklandfocusgroup@gmail.com. Thanks!

      • Kellll_bell89 … Thank you for your interest. Before we share our information and experiences with you, I notice you are with a focus group company. Can you tell us who you represent or at least your client’s interest in this property? Thank you in advance

  17. Landlords are not required to provide the social service of subsidized housing. Why is this so difficult for people to understand? Instead of lamenting about high rents and d-bag landlords on a blog, write to your city council and state representatives and contribute towards pushing legislation that would (1) CONTROL rental increases, (2) incentivize developers to invest in public transit and city infrastructure and (3) require jurisdictions to build more subsidized/affordable housing. Or shit, just vote for someone that stands for all this! (Voter turn-outs are still abysmal at 37% in king county according to November 3 2015 elections…)

    Soul-less assholes run companies all the time. that’s life. Do something more productive with your anger.

  18. I think one of the big problems is that people are lining up to pay $1,500 a month for an old apartment. That may be a slight exaggeration, but the market does support higher rents. That sucks for some, but who are we to tell people they can’t make money off their properties?

    Insecurity is part of being a renter everywhere I’ve lived (including outside the US). I’d love if I had $$ for a down payment somewhere, but for the time being I’ll just have to deal with it like the rest of us renters.

  19. Webb and Stratford sounds like a jerk. But is important to separate out him from the issue of what rent should be for a building. One can either conclude the rent should be what it was in the past because you want it to be, or can look at various metrics. The best metrics to consider are the value of the buildings. Value is generally based upon comparable buildings and in the commercial realm, this is based upon income (rent) generated. So the benevolent sellers of the building likely sold it at market value based upon what it should rent for, not what it was renting for. Their charity ended with the sale. If one of us were fortunate to have say a million dollars to invest, we would expect it to earn somewhere around 80-100,000 per year from rental real estate, or we could park it in an index fund and do almost as well with no hassle. It is no secret that the taxes, insurance and upkeep on a building are a lot, interest on loans costly and management is not free – even if it sucks.

    And lets not forget the tenants who trash units, who skip out with unpaid rents, and the risk of empty units and general market risk. There is a reason that few want to be landlords. One being that few are willing to deal with the stress of dealing with the inevitable jerks and hard luck stories.

    I remember not long ago, in the last 10-15 years when rents were depressed, and landlords were giving free months to sign up. For those who bought at the top of markets and saw their value and rents decline, no landlords were crying foul and claiming they have been dealt an injustice with falling rents. They understood the dynamics and hoped their luck would change with times like the current situation.

    Other ways to look at rent is what one might pay in a good location in a similarly desirable city – say New York, Chicago, Los Angeles, San Francisco, London, Paris etc. In the context of other nice places, we are cheap. On the other hand, one can do better in Kansas City, Tacoma or Everett I bet.

    Then there is the evil marketplace setting rents. All those commenters likely expect to charge for their own services or time as employees, at market. If a prospective employer tried to argue that they paid an employee 40K to do what you want 50K for and could earn elsewhere – you would be unimpressed and not take the lower offer, even if the strapped business owner demonstrated that s/he could not afford to pay the higher price.

    The only way to see rents decline is to either reduce the number of renters or increase the supply of housing. The former means a less robust economy, which many of us would prefer. The latter means more density, buildings, traffic and is likely unstoppable so long as there are jobs to attract people.

    Sorry for being long-winded but those who wish rents to decline just because are living in a dream world. And rent control sucks for society at large and is a fantasy that won’t happen in Washington and I am glad for that.

    • Rents will never decline anyone who thinks that is delusional but they shouldn’t be rising at rates that for many ared outpacing their cost of living increases they get from employers or government benefits like social security because this justification of “market rates” is just code for greed and we will charge as much as we can and screw anyone who can’t pay it.

  20. When a building like that is sold it usually gets bought by some hedge fund or entity that has no local connection other than owning other building where they come in a raise the rents to do some remodeling if your lucky and they don’t care about the tenants who can’t afford their sudden increase to meet market rates they only answer to Wall Street and a money first people last culture that permeates the rental industry anymore.