A street view of the facility (Image: King County)
King County officials say that despite a Seattle real estate development group standing to make a cool $10 million or more on the flip, they are paying a fair market price for the Broadway and Union medical facility slated to be transformed into a new mental health Crisis Care Center by 2027.
The “assignment fee” in the county’s $42 million deal for the Polyclinic/Optum building has been a key issue for critics of the plan and was the center of questions from King County Council budget committee chair Rod Dembowski as his committee ultimately voted to move funding for the $56 million project forward earlier this month.
“A one year flip for $10 million? The intermediary got a really good deal,” Dembrowski said during the committee proceedings.
The land deal is now moving forward to closing.
A county finance spokesperson says the development firm is profiting from the levy-supported criss care center program — but Guntower Capital is making a square deal.
The county says Guntower Capital arrived at a Purchase and Sale agreement with Optum Health in January of 2024 and is now ready to profit from the contract.
“The parties, at that time, agreed to a purchase price of $28 million,” the spokesperson said. “Subsequent to that transaction, the facility was identified as a location that likely could well support a Crisis Care Center. As Guntower had the property under contract, the County could not have negotiated directly with Optum without them violating the terms of their agreement with Guntower.”
The spokesperson says the county is paying a fair market value and “negotiated a price that ultimately was below the appraised value of $41.3 million.”
With nearly a quarter of the cost going to the flipping party, the transaction has become part of pushback on the crisis care center project — though not enough to scuttle the county council’s votes on its funding to meet what proponents say is crisis-level need for people suffering from mental health issues in Seattle’s core.
“There are very few places in King County they can walk into. Because of this, they are suffering in our streets,” committee member and King County Executive candidate Girmay Zahilay said before the committee votes earlier this month.
Approved by county voters in 2023, the levy was planned to raise as much as $1.25 billion through 2032 to fund creation of the five crisis care centers and increase mental health services in the county.
Critics are also closely watching the awarding of a contract to run the Broadway facility.
In addition to the county buying and owning the properties, the levy provides companies like Connections that runs the first center in the network in Kirkland access to operations funding plus $2 million annually “in workforce funding to support, strengthen, and recruit their workforce.”
The Crisis Centers must provide 24/7 walk-in care, 23-Hour Observation Units for patients brought in by police “to receive immediate care to stabilize and stay for up to 23 hours,” and “crisis stabilization beds” where individuals can stay for up to 14 days “to receive focused behavioral health treatment.”
In its most recent actions, the county council moved guidelines forward they say will require the county to live up to the City of Seattle’s conditional requirements for the project including a Seattle Police Department review of public safety conditions around the proposed facility and the formation of a new citizen advisory committee to oversee the center in the area just blocks from Seattle University and Cal Anderson Park.
As for Guntower’s flip, that looks like a done deal — though assignment fees are typically associated with wholesale real estate transactions involving multiple properties and can represent a major, excise tax-free windfall for intermediaries.
The Guntower development firm has also been busy in the neighborhood planning a seven-story mixed-use development at E Olive Way and Denny.
Formed in 2017, Guntower Capital includes Jonathan Slavin of Newmark Realty Capital, and Chris Langer and Joseph Razore of the Broderick Group, according to state filings.
None have responded to CHS’s questions about their deal to profit off the Broadway Crisis Care Center system.
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I voted for Crisis Care Centers thinking it was centers with a plural. I never imagined Capitol Hill and Pike / Pine would see a 114,000 square foot center to potentially serve all of Seattle.
Unbelievable! It’s $10.5MM of fees paid by King County to Guntower. This deal was set in motion by King County in advance of Guntower locking up the property so King County could vote to skip any environmental review of any Crisis Care Site in King County before it took the assignment of the Poly Clinic from Guntower. This site is currently a Conditional Use Permit. I don’t believe we would be where we are now had the county not snuck this in under the radar deal. We need transparency from our government.
Why not spread 5 smaller locations throughout Seattle? Why should Pike / Pine Urban Neighborhood take all those in Crisis from neighborhoods including Ballard, West Seattle, Downtown, Belltown, Central District and SODO?
Pike / Pine is still recovering from Chaz / Chop I don’t see how and why we should take all of Seattle’s people in crisis especially since the average stay in the Kirkland’s CCC is 2.5 hour before they are released.
We recently lost Whole Foods as well as many legacy retail shops and restaurants. Pike : Pine is too special of an urban neighborhood to allow this to happen.
It is now starting to make sense. Thanks for clarifying. So it sounds like while King County was scheming to dump this regional facility on Capitol Hill/First Hill without environmental review, the intermediary may have been scheming to make a $10,000,000 windfall of taxpayer dollars from the initiative by purchasing a building that would be low-hanging fruit for the County. Then they lobbied elected officials. Or was it the other way around? It would be interesting to see who contacted whom first and what conversations were had when. May not be illegal but it is shady. It is not a good look for King County following on the heals of the Seattle Times report on tens of millions of missing taxpayer dollars that went to newly formed NGOs without adequate oversight from the King County Council. This should be a huge election issue but they will try to sweep it under the rug because both candidates are on the King County Council.
FOIA
You do get that if the city/county had decided not to site the crisis care center in the former Polyclinic building, the intermediary would have been stuck with a building that needed either major renovation or demolition to be converted to some other use. Hence they made the $$ as a return for risking their $$. I’m not saying the $10mm figure is reasonable, but it’s not like it was a zero-risk gamble.
They didn’t take a $$ risk if the deal was in the bag. Also, if the building is in poor shape, then why is King County going to pay $48,000,000 for it?
“The first Crisis Care Center, Connections Kirkland, is now open. A Crisis Care Center is a place anyone can walk in 24/7 to get urgent care for a wide range of mental health or substance use challenges, regardless of insurance. In the coming years, the county plans to open four more centers in Central (Seattle/Vashon), South and East King County, plus one for youth.”
“The nine-year levy is helping make crisis care easier than ever to get by linking the 988 crisis line, mobile crisis teams, and other behavioral health resources to support people’s recovery.”
https://kingcounty.gov/en/dept/dchs/human-social-services/community-funded-initiatives/crisis-care-centers-levy
The amount of armchair reporting from the hip that people do in the comments here is so fascinating, did you not read the levy you voted for? It called for 5 crisis centers around King County, not Seattle… The first is already operational on the Eastside in Kirkland, having one near the heart of Seattle makes sense to me. I do want to make sure folks are keeping an eye on the money and who’s profiting, but they are largely following the plan you voted for but maybe didn’t read.
Because D3 voters have consistently and proudly been the standard bearers for Progressivism. You’re likely in the vast minority of your neighbors and they’ll tell you you’re a bit bourgeois to be so concerned about silly things like neighborhood identity. That sounds like something the owner class would worry about.
Given King County’s history of corruption and lack of oversight, I hope there is an outside investigation of this shady deal, perhaps triggered by a lawsuit. Once again taxpayers are left holding the bag and Capitol Hill is the dumping ground for regional problems.
Regardless it’s a new W for the community to help the homeless and addicted get better healthcare access. How we get there may not matter as much.
Just like “Deep Throat” said to the late, great Robert Redford/Bob Woodward in the movie….”Follow the money…..just follow the money…..”
The $41MM appraisal is another example of corruption. Others who tried to buy this building had it valued at around $20MM. And Connections Kirkland is a for-profit operation backed by a private equity firm. The fact that the $10mm fee, the overvaluation, the private equity involvement and tax-payer dollars going to a for-profit operation with no terms to profit share back to the county for re-investment with the center is corruption and abuse at its finest. The fact that progressive leaders are pushing this forward and not demanding answers, renegotiations and changes is a rich twist in their storyline.
” Others who tried to buy this building had it valued at around $20MM. “
Who’s that? I’ve followed this and heard nothing.
Just like “Deep Throat” said to the late, great Robert Redford (Bob Woodward) in the movie: “Follow the money….just follow the money….”
Sadly…Bob just died.
The ccc is a horrible deal for this historic and beautiful neighborhood.
There are schools that are within a stones throw of the proposed site. The county did not contact or communicate with the surrounding businesses at all.
On paper, how can anybody be against a crisis care center? The answer is they do not work or even help the very population they are targeting.
-In this area, the health care team does not respond to any mental health issues, despite asking hundreds of times.
-the walk in proposal is a joke. It is voluntary. Despite drugs being “ sort of “ illegal , there have been zero arrests or diversions for drug use in this area.
-even when a drug user has been saved by narcan, they do not want help. They are angry that their high was ruined. Unfortunately, they have to be forced to go because they are a danger to themselves. ( which never happens)
– they openly crap on the sidewalk, urinate on buildings. Residents have to carry doggy poop bags when walking their dog. That’s a fine. But we give an exemption to the drug sick. Never mind about the diseases and infectious material that is now a human hazard.
– the city graciously cleans the bus stops with anti microbial agents. What is the average citizen supposed to do. Should we all garner hazmat suits ? Have human waste dispensers , at the ready for society to jump in and pick it up.
This ccc center is going to add insult to injury. The police have their hands tied, the mental health responders are a no show, yet less than 500 feet from the proposed site sits the behemoth “rise” from bellwether housing. Plenty of vacant retail space there.
These buildings in auto row are part of seattles history.
By the current policies, they have been vandalized, windows smashed, innocent people attacked, shootings. However, we insist on attacking the owners as perpetrators by asking for basic services.
Let us see some progress using the currently available services that aren’t being utilized. Allow the police to arrest users and give judges the ability to force these people into treatment.
The ccc will be another property tax money laundering scheme that punishes the owners and removes all responsibility from the criminals and mentally ill.
This is my opinion. But it’s based on facts, not lip service about what the city will help with. This has been set up to fail and will cost millions to run.
“This is my opinion. But it’s based on facts”
You really believe that don’t you? Wow…Okay
I’ll bet you are great at parties.
There are people in crisis on my block (not far from the proposed center) all the time. Sometimes yelling at people and getting in their faces or even making threats. No one bothers calling the police because they know that nothing is going to happen–cops don’t want to deal with booking someone and/or bringing them to Harborview, which right now is more or less the only solution. To my knowledge, there is no system in place to transport people to Kirkland, which is the only place a crisis center exists right now.
I know that this center going in is likely going to lower my property value. I know it might lead to more people in crisis nearby. And there’s something VERY off about this deal. Nonetheless, I still support their putting this in. Because it is also going to provide beds and services for people who need them, at a realistic distance to make transporting people a legitimately workable option.
“Sometimes yelling at people and getting in their faces or even making threats. No one bothers calling the police because they know that nothing is going to happen…
Ummm…It’s not illegal to yell in someone’s face.
MAGA only wants it to go away. Not get treated. Just moved somewhere else so they have to deal with it and not you right?
Now you and others know why you’re not taken seriously. It’s about punishment. It’s ALL about you, not the people suffering from mental health crisis.
Talk about uncaring and cruel? wow
Everyone wants it to get treated, but our existing infrastructure doesn’t seem to value getting people into treatment.
It can be illegal to make threats. Ditch the MAGA stuff Smooth unless you know the person is MAGA.
That’s not what they do though and it was not mentioned. Again, yelling is not against the law thus, no cops are called. Why? There’s no reason to. And if the commentor was yelled at? Why didn’t they call the cops?
BUILD IT! It is time to help our citizens in need. Yessss to more access to healthcare.
Have you ever considered shades of gray? Life is not black and white.
Considering the age of the building, has anyone looked to see if this is a black hole for taxpayers dollars? Here is a summary of the Property Conditions Report King County commissioned and there are some BIG red flags. What else are they hiding?
Property Unknowns from Polyclinic Conditions Report
Summary:
The property is in generally fair to locally poor condition with significant deferred maintenance items observed.
The site infrastructure and improvements have exceeded the design life expectancy.
Hidden conditions should be expected.
This Report does not confirm the presence or absence of items such as mold, asbestos, environmental conditions or hazardous substances on this property.
Water Intrusion
Structure
Seismic
Drainage
Windows
Roof
A water leakage investigation is recommended. (p. 19)
Mold
Wow. Ex ellent. Thank you.
This was all schemed up by the Capital hill elected Girmay Zahilay to the king county board… and now people want him for the county executive position… HA!
Doesn’t forget Teresa Mosqueda. Her dirty fingers are all over this. Shawn Scott, Rinke dink and Katie Wilson are also in on the money laundering scheme. The Mayor who signed the death warrant for Capitol Hill after he lost the primary also shouldn’t get a pass. I hope there is a lawsuit and investigation to shine a light on the King County corruption. Somebody should be held accountable.
I love both of them. And voted for both along with my family! Happy about it! We need social services.
Quoting Ezra Klein. Sorry I cannot stop laughing there. When capitalism is the problem, voting other capitalists is just insanity. Cannot keep doing the same thing expecting different results
Hi Derek, I’m not a socialist, but I admire them. If you’re a socialist, then you might see issues w/ king county paying $$$ to a private-equity firm to provide these social services.
Here are google reviews from 5 patients at the Kirkland crisis care center. They paint a scary picture:
King County needs to get their act in gear and make their for-profit contractors provide genuine care. As you said, we cannot do the same thing expecting different results.
This is an abhorrent state of affairs and needs to stop TODAY.
Find a center in Queen Anne, West Seattle, or Ballard. Let’s get smaller centers going across Seattle. Finalize it with a center in Capitol Hill when everything else is done.
I’m tired of seeing shops and restaurants closing, and more people in tents and drug users coming into the neighborhood. The place is for all of us, not for the criminal few.