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Behind the Tully’s Capitol Hill closure: the lawsuit, the taxes, the what’s next rumors

No, the property hasn’t (yet) been sold to a developer but, yes, the financial issues surrounding the closure of the Tully’s coffee after 20 years at 19th and Aloha go much deeper than a lost lease.

CHS broke the news on the coming closure for the popular neighborhood hangout in mid-November. We documented more than $300,000 owed in taxes to the state of Washington and decisions including a $102,000 judgment for unpaid rent on the company’s Western Ave offices. It turns out, the company owes much more. By the end of the month, the Tully’s across the street from St. Joe’s and a few blocks from the Holy Names Academy was closed for good. Along the way, Global Baristas, the company that took over the struggling chain, never responded to our requests for more information on the closure and chair Michael Avenatti blocked us on Twitter.

Now, CHS can report more on the lawsuit behind its lost lease at 19th and Aloha and the deeper financial challenges faced by the company. According to a lawsuit filed on behalf of the property’s owner against Global Baristas, Tully’s stopped paying its $5,400 per month rent on the building over the summer. In all, the company is now on the hook for more than $30,000 in unpaid rent.

Landlord Marie Collison — whose family has owned the property for decades — was also forced to divide the parcel to protect other small businesses located at the corner as the financial troubles around the Tully’s building mounted. That process has some neighborhood sleuths worried about a developer moving into the neighborhood. While Collison and her lawyer have not responded to CHS questions about the transactions, people familiar with the situation said redevelopment is not the current plan. So, neighbors, don’t worry about the mysterious sounding Tiveden, LLC that now owns the Tully’s parcel as of November. That company belongs to Collison.

Do worry about Tully’s, following CHS’s reports on the Tully’s unpaid rents and taxes, the Puget Sound Business Journal found the company owes more than $5 million in total for unpaid taxes and penalties. The company is putting on a brave face. “Any suggestion that Tully’s has not timely and properly paid its taxes is patently false,” Global Baristas said in a statement sent to the PSBJ. “As is often common with companies with multiple reporting divisions, clerical errors occur by various governmental agencies relating to how financial reporting occurs, how payments are recorded and to which accounts those payments are posted. Any company of significant size and complexity routinely deals with similar issues. Tully’s is a privately held company that treats its privacy seriously in this day and age. Regardless, the company has enjoyed and continues to enjoy tremendous financial success and expects to do so in the future.”

The Seattle Times (here) and the Seattle PI (here) have also reported on the slow brewing meltdown following our reports.

Neighbors, of course, are also worried about what comes next. The former home of the Surrogate Hostess and, long ago, the original Red Mill, the 1925-built building is still technically classified as a restaurant though any new tenant would likely be on the hook for costly improvements to continue that historical use of the space. Rumors on this leafy side of Capitol Hill are swirling. We’re told to expect tomorrow at the old Tully’s to look not too much different than yesterday but we don’t have anything to report. Yet.

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10 thoughts on “Behind the Tully’s Capitol Hill closure: the lawsuit, the taxes, the what’s next rumors” -- All CHS Comments are held for moderation before publishing

    • They could put in that safe injection site. I mean, sure there’s a school right there, but we’ve been assured there will be no impact from that to the neighborhoods.

    • Great idea, Sloopy. Then the isolated north side of Capitol Hill will see how many people use it and get an idea for what it’s like in south Capitol Hill EVERY DAY. Yes, even near schools.

    • Probably nobody would use it, and people would still be ODing on Broadway and in Cal Anderson Pk. It’s all about where they want to hang out after they’ve injected.

    • You’re absolutely right about this. My point is: the attitude that a safe injection site will negatively impact a neighborhood is moot because we are already impacted by this every day. I’ve watched countless people inject and called 911 for two ODs on my own street in the past year. I find needles everywhere, even near schools and in quiet neighborhoods. People who think their neighborhood isn’t yet impacted are misguided or highly ignorant.

  1. Doesn’t seem a lot of rent $$ given the potential of the site. Is it zoned for 4 stories ? Apodment or better yet, Airbnb hotel. Those seem to be still legal – giant one up on Roy street – 20 units at $60-$100 / night. Wow !