The 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:
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.
“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.
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.
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.