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‘Undervalued’ — $23.5M sale of 23rd and Union block mired in family legal fight

Midtown Sale - 2 of 3The sale and development of a critically important Central District block has been tied up by a family squabble over millions of dollars and the African American history of the neighborhood, court documents reveal.

According to the documents, a $23.5 million offer to buy the Midtown Center property on the southeast corner of 23rd and Union has been in place since late last year but a lawsuit by longtime property manager Tom Bangasser against his family’s partnership that owns the land has troubled the transaction.

Last year, Bangasser’s siblings voted to remove him as controlling member of Midtown Limited Partnership, prompting Bangasser to file a lawsuit seeking compensation for his for his decades of managing the property for the family. He told CHS his siblings had grown impatient with his vision to transfer ownership of the property to a land trust that would come under community control.

“There is a difference of opinion in what the exit strategy should be,” he said. “I’m a believer that the neighborhood should own the property.” His siblings essentially agreed — about the disagreement:

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Midtown went up for sale in June after Bangasser’s siblings replaced him as the managing partner. Bangasser said the slick marketing campaign rolled out by realtors is proof they have little interest in preserving African American culture at the site.

Court documents reveal California-based apartment developer Legacy Partners was lined up to purchase the 106,000-square-foot property in a $23.5 million deal, but the status of that offer remains unclear. A Legacy representative declined to comment on the deal, but confirmed the company is in discussions with the Midtown owners.  Legacy Partners (not to be confused with the Pike/Pine property owners Legacy Commercial) own and manage several apartment buildings around Seattle and would likely join with a commercial developer on the project.

In Tom Bangasser’s lawsuit, the former property manager chastised the partnership for moving forward on a sale of the property without properly valuing its place in the Central District African American community. Bangasser alleged the appraisal of the property was undervalued by as much as 50% because of racist assumptions about the “African American ‘black lives matter’” neighborhood.

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“Current Midtown liquidation discussions have excluded this community. They have ‘no seat at the table’ but have a major vested interest in who buys, how the property is developed, and how their heritage and ‘sense of place’ are to be respected and maintained,” Bangasser wrote in a October court filing.

As the managing partner, Bangasser owned 21% of the partnership and he contended he was entitled to a 5% commission of the property’s sale price, which he estimated would be $30 million. When Bangasser’s siblings voted him out as a general partner, he sued for $1.5 million plus 12% of Midtown’s interest from the point of his ouster.

In January, a King County Superior Court judge partially sided with the Midtown Limited Partnership, agreeing that Bangasser had been lawfully removed as a general partner and that another member of the partnership would now lead the group with the authority to sell. The judge did not specifically address the $1.5 million claim.

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But the messy legal matter apparently does not end there. Last week, the court issued an order of noncompliance demanding the sides complete filings in the case or risk dismissal. A trial date is still active for later this year.

Midtown’s new general partner Hugh Bangasser, a Seattle attorney, declined to comment on why his brother was demoted last year from his controlling position in the family ownership structure. He said Tom Bangasser remains a limited partner and would not comment further on specifics of Legacy’s offer except to say that the property was still up for sale. As for his brother’s vision for the site, Hugh Bangasser said he shares his respect for the diverse neighborhood.

“We’ve been in the community for 75 years, we’re committed to the community,” he said.

The first Midtown property parcels were purchased by the Bangassers’ father 75 years ago and Tom Bangasser has been managing it for decades. Paul Bangasser was active in the neighborhood’s fight for racial equality and fair housing, according to his 1992 obituary.

The Midtown partnership formed in 1988 with just under $1 million in assets. Under his leadership, Bangasser said in a court document that he grew its value to $40 million, which includes the James Washington Foundation.

The redevelopment of the block has been a flashpoint for community anxiety regarding gentrification in the Central District, Seattle’s historically African American neighborhood. The Midtown Center is and has been called home by a number of minority owned businesses, such as Earl’s Cuts and Styles and Sam’s Moroccan Sandwich Shop, which closed late last year. Other businesses along 23rd Ave are feeling the pains of change with ongoing construction and economic pressure.

The mired deal also emerges as Seattle developer Vulcan moves forward with its plans to reshape 23rd and Jackson after a $30.9 million acquisition of six acres of commercial property at the intersection.

Bangasser has been in regular communication with various community stakeholders such as Africatown and the Union Street Business Association regarding the site’s redevelopment and how the eventual project could help serve the interests of the African American community.

Tom Bangasser (Image: CHS)

Tom Bangasser (Image: CHS)

After watching the Central District’s African American community struggle for decades, Bangasser said he realized property ownership was key for minority-owned businesses. With the City of Seattle’s help, Bangasser envisions Midtown being placed into community control through a land trust, which he would help fund through his 25% equity in the property.

“There’s a lot of history there and that should not just be washed away because an outside buyer comes in, bringing in basically Wall Street money,” Bangasser said. “You don’t want to have it so that everything is owned by the white guys and (blacks) are just tenants.”

Meanwhile, some new and old tenants on the backside of Midtown property face an uncertain future at 24th and Spring. Earlier this month around 20 former Nickelsville campers relocated to the UMOJA P.E.A.C.E Center, a youth-focused nonprofit founded by Africatown activist Omari Garrett. CHS previously spoke with Garrett and some of the campers, who said they are on the search for a more permanent location.

Hugh Bangasser said the property owners were never approached about the encampment and that the campers would soon be given a 10-day notice to vacate the property. “We did not authorize it, we were not aware of it. No one asked or supplied proposed permits,” he said.

The pending Midtown sale is just the latest development in a wave of change sweeping over the blocks around 23rd and Union. One block east, the 24th and Union Liberty Bank Building project has come to represent the aspirations of Mayor Ed Murray’s administration to combine affordable housing, cultural identity, and economic development under one roof. Meanwhile, market-rate developments encircle Midtown with two projects from Lake Union Partners rising across the street and a flurry of development activity continuing down Union toward MLK.

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10 thoughts on “‘Undervalued’ — $23.5M sale of 23rd and Union block mired in family legal fight

    • Considering every single house in that part of north Capitol Hill nearby the 22nd and Highland house are some of the fanciest homes in the city (and some of the largest) it would imply that if you were one of the “rowdy kids nearby” that you too grew up in a home of similar size and grandeur. It’s too bad “the Clover” now has a home build on it. /justathought

  1. Call me cynical, but this basically sounds like a dispute over $$$, couched in terms of concerns for the “community”. Behind all the high-minded language on history, race, etc., the sole intent seems to be getting a higher overall price & an extra 5% for Bangasser. A bigger slice of a bigger pie & nothing else!

  2. There is a huge irony that the same people so concerned that the history of it being a predominately black neighborhood be respected themselves have shown no respect for the long history of it being a Japanese, Jewish, Italian, and or course Native American neighborhood. Why are there no reminders of that?
    I’ve heard that the CD is now 20% black so why is it still referred to as a predominately black neighborhood? Show respect to the contributions all people have shown. There is something really disturbing how this is being framed that picks and chooses what to notice.

    • I’m sort of wondering, based on the precedent that seems to be being set here– when I go to sell my house and retire, will I need to ask all my neighbors what they think ? Cuz yeah, it’s my house and all– but they should all have a say, right? Or maybe I only have to ask certain neighbors? I don’t want to get sued, after all…

  3. So after 75 years of white ownership leasing to the black businesses Tom Bangasser has a epiphany that is fundamentally wrong. Yeah, right.

    Last year I was at a public meeting discussing the constant crime and incredible amount of gun violence at his MidTown property. Tom Bangasser spoke and he seem disingenuous or simply out of his depth and confused. He seemed to hold the position that he had no control nor any responsibility for what occurred on his property. He’s the property owner but it was up to the city and unicorns to take any steps; such as keep it well lite, clean, as god forbid put up a camera or two. This from the man who told SPD for years they were explicitly banded from entering his property. Well, because of his complete disrespect for the community the situation got so bad the ATF put up cameras.

    He also said that because things were so bad the only way the property could every be redeveloped is if the city gave him an upzone to 65′ (without him providing any firm plans or concession to the community). Meanwhile his property was surrounded by new development and deals as well as a $23M deal for him on his doorstep.

    I like to think that he isn’t as duplicitous as he seems and it is simply because he is confused.

    Oh Banagasser, this champion of the African-american community, live is the diverse community of… Vashon Island.

    • You seem to forget that the owners invited, gave free of charge, and built a highly visible and arguably the most valuable piece of rental space on that property to SPD to staff and run to help curb the violence and bring more stability to the intersection and the the SPD did exactly nothing with it…for more than a decade. The SPD got free rent and a space built for them in order to help curb this situation and they used it as their little clubhouse and ignored what was going on on the streets outside. They never staffed it. In fact they used it as a place to do paperwork in the back with the door closed and locked with the lights in the front turned off. Let’s not go around placing blame on a property owner who at significant expense to him, brought the people we pay to enforce the law in, and they did exactly nothing. Maybe your blame is a bit misplaced.

  4. Perhaps many of you have read this article with only economic dollar signs in your eyes. Then you clearly misunderstand the dual value propositions that MidTown Center represents:

    First, yes, it is a great real estate investment that has been nurtured by my family for 75 years, through five generations. In real estate terms, “location-location-location” is the rule of thumb and Seattle’s 23rd & Union is now a great, great location and quite valuable! Over the years, we have worked with our tenants and survived racial profiling and bank redlining. For the Bangasser Family, successful real estate investing has been attained through patience and timing and yes, some now want to “cash out”. And they should be afforded that opportunity. … However,

    Second, but more important, is the value proposition that “Black Neighborhoods Matter”, symbolized through the unfinished “Fountain of Triumph” by James W. Washington. This sculpture reflects our belief and value in “inclusive gentrification” – our long commitment to correcting the many injustices and struggles of the African American community.

    Both of these value propositions can be accomplished through the purchase/transition of the MidTown Center to a community land trust ownership. Seattle government officials need to support this neighborhood through respectful preservation of its changing African diaspora heritage and legacy – i.e., inclusive gentrification.

    Your political and financial help would be appreciated.

    • Unfortunately, Mr. Bangasser, a large number of people who live in the immediate vicinity do not believe you. This property has been a hotbed of drug dealing and violence, most obviously in the past year or eighteen months. You and your family have steadfastly refused to do anything such as on-site security, adding security cameras, or fixing/adding lighting to the lot. We are currently trying to work with your family to provide security and sanitary provisions for the homeless encampment that is now on the property. The answer has consistently been that you have no plans to provide any of these things. You have let this property deteriorate to the major center of illegal activity and violence in this neighborhood. No one wants to go near it. If you honestly cared at all about the neighborhood, you would be doing something – anything – to address this. I’ve lived a half a block from this property for twenty years, and the past year or two has been the worst in terms of drug dealing, prostitution, and gunfire since I moved in. Please, do tell us how your actions are motivated by “inclusive gentrification.” And how many times have you had walk through a gang of people dealing drugs while walking to the post office, or watch someone defecate on the sidewalk in front of you at Midtown Center, or dive to the floor while grabbing your phone and dialing 911 to report more gunfire or a murder on your front lawn from the gangs that feel welcome on your property. Please, do share how this is “correcting the many injustices and struggles of the African American community.”

      We aren’t buying a word of it.