Seattle’s “tax revolt” spring of 2018 includes a skirmish along Broadway, Pike, and Pine. Instead of a battle over “No Tax on Jobs,” this fight pits the Capitol Hill Chamber of Commerce vs. a coalition of the neighborhood’s few remaining smaller and family commercial property owners and its relatively few co-op and condominium property residents. Together, the group could prove a major barrier for the chamber.
“We have huge traction to fight the proposed Business Improvement Area,” prolific Capitol Hill real estate investor Morris Groberman tells CHS.
Groberman, who owns or is partner in a collection of Capitol Hill properties including the Harvard Market shopping center at Broadway and Pike, is at the head of an effort to organize opposition to the chamber’s proposed expansion of a Business Improvement Area across most of Capitol Hill.
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The chamber has a few more weeks left in what amounts to an annual cycle to collect signups from owners of the majority of Capitol Hill property covered in the proposed boundaries, and get the petition before the Seattle City Council in time for it to be acted legislatively by this fall.
Groberman and CATCH — the Coalition for an Affordable and Thriving Capitol Hill — are hoping to derail the process.
“The city cannot be trusted with this money,” Groberman says. “No accountability, no sunset — if the BIA goes away, the City of Seattle gets the cash.”
Jeff Pelletier of 15th Ave’s Board and Vellum and director of the Capitol Hill Chamber of Commerce board says the concern should be about bringing together funding for local solutions to form the expanded BIA — a Capitol Hill Alliance.
“Right now there is no organized way that businesses, property owners, nonprofits and residents across Capitol Hill can come together to address local issues with local funding,” he tells CHS. “A new BIA would allow us to provide important services across the entire hill that don’t just benefit business and property owners, but individual condo owners as well.”
Pelletier says many small family property owners and HOAs pay for their own building and sidewalk cleaning, graffiti removal, trash removal, and other services. “I think they’d be surprised that in the long run, creating a Capitol Hill Alliance would provide them with more services for less money than they are paying for individual services now,” he says.
To move the expansion forward, the chamber must convince property owners impacted by BIA assessments that could run between $2,000 and $5,000 per year for most of the 850 or so properties involved to approve expansion of the city’s Office of Economic Development program. Already part of the Broadway business community for years, the expanded BIA would be similar in structure to ones in Pioneer Square, SODO, University District, Ballard, West Seattle, and downtown, and would power clean streets, public safety, and business growth services across Capitol Hill. This summer, the existing Broadway-focused BIA will put funding towards homeless outreach services to help merchants along the artery cope with the area’s unsheltered population.
But Groberman and property owners like him say growing a Capitol Hill BIA into a $1.6 million or more per year operation shouldn’t lean on assessments and would bloat the effort into work and services taxes paid to City Hall should already be covering. There is also concern about adding more costs in an already expensive place to do business and Groberman and others CHS has heard from say they are concerned that once the expanded BIA is in place, that it will be nearly impossible to dismantle.
To show CATCH’s neighborhood roots run deeper than an URL — catch.talkspot.com — supporters of the opposition effort have been contacting CHS over the past few weeks. We’ve heard from about a dozen, most either are owners of a single, longtime-owned commercial property in the neighborhood or are residents in condo buildings on the Hill. Many like Matt Basta, owner of the 1915-era 11th Ave building home to Queer/Bar, say the assessment could be a final straw pushing them to find larger, less neighborhood friendly tenants or to finally bite the bullet and sell the property for development.
“I have several small local tenants in my building and I have been invested in Capitol Hill for 30 years and have seen many changes,” Basta said. “How much more will my tenants pay before they leave and I am forced to sell out to a developer?”
Hugh Saffel, who runs a creative agency and owns a Pike/Pine commercial condominium, shares similar concerns:
I’ve lived on Capitol Hill for almost 40 years. I’ve owned a commercial condo retail space for the last 18 years. I’m opposed to the BIA for several reasons. I believe that it is the City’s responsibility to provide many of the basic services that this BIA is supposed to address. We pay significant taxes, that I believe should cover these needs. And yes, my property has gone up in value—and my taxes are directly linked to this increase. I can raise my rent to accommodate this, but that continues to escalate rents to price out many of the stores that make our neighborhood unique. I purposely rent my space to a retail store, in spite of the fact I could have charged much more to have it be another bar. I didn’t do that because I want to encourage all hours of activity in our community.
The chamber’s campaign, meanwhile, also has strong independent property owner support including Hunters Capital and developer Liz Dunn. The campaign has posted a roster of supporters here. Critics CHS spoke with say the support is bolstered by large, national developers. “Essex, Alliance, — they’re not from here. “If they make a 1% return, they’re happy with that,” Capitol Hill property owner Ron Amundson says.
“The larger property owners generally are only invested in their properties for the minimum amount to get financing,” Basta said. “It is in their interest to see the neighborhood gentrify so that their property value goes up and they can leverage more money to further speculate on other real estate.”
Similar complaints come from Capitol Hill condo owners whose buildings fall within the proposed expansion boundaries. “I own a condo on 15th, and I’m against it for the same reason that tying school funding to local income is bad,” writes one owner, “tiny locally-bound taxes are a way to let rich places spend their money on themselves instead of pooling it to provide services for the whole city.”
“I do contribute to nonprofits, I believe in government, I believe in taxes,” another of the dozen of so condo owners CHS heard from said. “Instead of collecting revenue and nickel and diming us, we need a citywide effort.”
Other condo boards are supportive of the BIA expansion campaign but are lobbying for their buildings to be classified in areas of the plan with lower assessment requirements like the 15th Ave “sub area” — Rob Curran, board president for the Courtyard on Capitol Hill condos at 15th and Pine, tells CHS his ownership group can’t support the expansion until their building is reclassified.
Despite the criticism of increased costs and concerns about the lack of a “sunset clause,” the playing field just might be tilted severely in favor of the chamber’s campaign. To expand the BIA, the chamber needs signoff from “those responsible for 60% of assessments” — not 60% of property owners or owners of 60% of the area’s parcels, even. In effect, larger landowners will have a larger say about whether a BIA should be implemented.
It’s a rigged game, Groberman and others complain. Pelletier says he understands the concern, but that “just isn’t the reality of Capitol Hill or reflective of the values that we established when we started working on this with a large coalition of stakeholders more than four years ago.”
“There is no grouping of large property owners on Capitol Hill that together get us even a quarter of the way towards our goal,” Pelletier says. “Instead, this campaign has relied on connecting with individual, small property owners across Capitol Hill, getting their feedback and talking with them about how a Capitol Hill Alliance would make our community a better place to live, work and do business.”
If Amundson is any indicator, the chamber, already a year behind schedule on its so-called “Capitol Hill 2020” plan and facing the prospect of missing its 2018 legislative window, has its work cut out. Like Groberman, Amundson owns a collection of Capitol Hill properties. While the national real estate investors and institutions like Seattle Central own the biggest chunks of property on the Hill, Amundson’s patchwork portfolio of Capitol Hill properties are home to many of the key corners of Capitol Hill day to day — from the Broadway Alley building to the lot Rancho Bravo calls home.
“I’m opposed to it because I’m very concerned about my tenants,” Amundson said. “My tenants are getting priced out of the market as it is. Their proposal won’t make any changes there. It’s just a bunch of platitudes.”
Amundson, who has decades of experience managing Capitol Hill properties, says he believes most of the money would be frittered away on graffiti clean-up and, worse, running the program. “Most is for cleaning and graffiti and administration,” Amundson said. “It’s a huge assessment for things we already do. As we know, government doesn’t really work very well anyway.”
In the meantime, as the chamber campaign is entering its final push for 2018, Groberman said his plan is to continue collecting counter-signers to the expansion petition. It’s a list he’s not ready to share — yet.
“I know we have 30% of owners lined up against this,” Groberman says. Groberman said he also thinks some of the initial supporters will back out when it comes time to sign the chamber’s petition. We’ll know soon whether he and CATCH can piece together the independently owned parcels and condo buildings needed to halt the expansion.
Amundson says he expects lots of talk about homelessness and the challenges of living unsheltered. He’s sympathetic to many of the campers he asks to move along from his building’s doorways and alleys. But he also expects a do or die push for the expansion. “I think this is to rescue the Capitol Hill Chamber of Commerce,” Amundson said.