The mayor, the MOHAI, and the moolah

The history museum, which is moving to South Lake Union to make way for the new 520 bridge, finds itself in a fight with Mayor McGinn over more than $40 million in state mitigation money.

The former Naval Reserve Armory, the planned new home of MOHAI, reflected in the waters of South Lake Union.

Dean Forbes

The former Naval Reserve Armory, the planned new home of MOHAI, reflected in the waters of South Lake Union.

Sometimes doing your best wins you not approbation, but opprobrium. Think about the recent dust-up around the forced move of the Museum of History and Industry (MOHAI) from the shores of Lake Washington to the shores of South Lake Union. The state has a problem: MOHAI is in the way of the new 520 Bridge landing at Montlake. And the city has a problem: an empty Armory at the new South Lake Union Park and no way to pay for maintenance or improvements.

But not to worry, there is a solution: Why not have MOHAI relocate to the Armory? There would be more space for exhibits, it’s centrally located, and the museum would become a draw for the new park. Also, MOHAI has the support and trusted staff to raise the money to pull it off.

What could go wrong? Well, somehow a sensible agreement has turned into a fight between the museum and City Hall — or at least the Mayor's office — over mitigation money coming from the state.

Here's how the deal got tangled: In an agreement last year, the city agreed that MOHAI would negotiate with the state to get mitigation money — compensation for the state condemning the property to make way for the new 520 bridge. MOHAI agreed to negotiate on behalf of itself as well as the city. This was a good strategy because MOHAI is a somewhat more sympathetic entity in Olympia.

MOHAI's initial agreement, with then-Deputy Mayor Phil Fuji and then-Parks Superintendent Tim Gallagher, required any money for the land itself to be split 50/50. Later, after Fuji and Gallagher had left City Hall, Mayor Mike McGinn wanted to renegotiate that deal. His attorney, Carl Marquardt, asked for the land proceeds to be split 60/40 in favor of the city, and asked MOHAI to give up two years of city operating support totaling $400,000. Once again, MOHAI agreed.

After this agreement, MOHAI’s representatives went to work negotiating with the state Department of Transportation (WSDOT) to recoup the value of the building, land, and relocation costs. MOHAI estimated its costs to be around $57 million. The state disagreed and would pay only for the value of the building and land. WSDOT agreed to a building mitigation of $40 million; negotiators are still working on a price for the land. Even though reports say the land is worth $7 million, it may turn out to be less or more.

Now, the Mayor’s office is accusing MOHAI of getting much more in mitigation than they ever let on was possible. And so the city wants to renegotiate its deal.

In a letter to the Mayor dated Aug. 25, MOHAI stated, “In February of this year, with the City’s prior knowledge and consent, we made an offer to sell [the building] to the State for slightly more than the pending $40 million offer.”

So did the city know about the $40 million figure and just assume MOHAI wouldn’t get it?

In correspondence dated Aug. 27, Carl Marquardt responded: “First we do not mean to suggest that MOHAI has acted in bad faith, or failed to disclose material information. We recognize and acknowledge that MOHAI kept the City informed in the course of its negotiations with the State.”

He goes on to say that the real issue is that the City’s appraisal of the property in 2009, when the City Council approved the deal, was only $15 million.

Does the city feel duped by those shrewd and nefarious operators, the non-profit historians? Should MOHAI kick back some money to the city?

I don’t think so. The city made a good agreement and is getting a lot in the deal. Simply because MOHAI negotiators did well in their deal with the state is not reason for the city to go back on its deal with the museum. In fact, the city made the deal with MOHAI precisely because of MOHAI’s ability to raise private and public funds to pull off the project and complete South Lake Union Park.

Also keep in mind that the museum still has a way to go to make the project a reality. Total costs to move and develop the new site will reach at least $85 million, MOHAI estimates. If the deal falls through and MOHAI shuts its doors in 2012 with no place to go, we all lose — the public loses a museum, and the city continues to fund an empty, dilapidated building.

But let’s consider some earlier history.

In 2000, MOHAI started looking for a new home. In 2003, it bought property near the Convention Center, and four years later it had a capital plan in place and was ready to make improvements to relocate. Then, in 2008, the museum was approached by then-Mayor Greg Nickels. Nickels asked MOHAI to help out with the Armory at South Lake Union. MOHAI agreed even though the city said there would be no funding for tenant improvements in the building.

MOHAI sold its downtown building and informed funders there was a change of plans. The museum took a huge risk, knowing it was on its own.

When you consider all that MOHAI is and does, you truly understand what a huge effort it is to relocate. Last year, 17,800 school children from around the region participated in the museum's state-recognized school social-studies program. The program meets state standards and helps children integrate and interpret history in a way that adds enrichment and meaning to their studies.

The new site will provide MOHAI a third more exhibit space, even though the building is roughly the same size as the current site. This will be accomplished by using some of the state’s mitigation money to house so-called “back of the house” operations off-site. Museum officials believe the historic building should be completely devoted to exhibit space.

MOHAI is on a tight schedule to make the project work. The latest news from the state is one more step in the journey. The worst thing that can happen is delay. The pieces seem to be in place and again, the taxpayer won’t be out a dime but we all will get something very special: an incredible venue where we can learn about and celebrate our history. The city will not have another facility to staff and yet we all benefit from the service.

The public will receive huge benefit from the museum. Additionally, the location, next to the Center for Wooden Boats, provides an historical nexus that provides incredible opportunities that currently don’t exist elsewhere.

Again, we should be very happy this is all coming together. Instead, we’re once again faced with a revisiting of agreements past. It appears that a deal is never done in the current political context. This is not just a temporary problem. If people can’t trust you to live up to your word or commitments, it becomes very hard to get anything done.

No one can do these big things alone — whether it’s South Lake Union Park, the Viaduct Replacement, SR 520, or the seawall replacement. It takes partners. MOHAI appears to be a partner that can really get things done.

And it also seems to do well with our partners in Olympia — something others in Seattle can learn from. Perhaps the city should contract with MOHAI for lobbying services in Olympia.


About the Author

Jordan Royer currently works for the Pacific Merchant Shipping Association, which represents marine terminal operators and container vessels that serve the West Coast. He previously worked on public safety issues in the Paul Schell and Greg Nickels mayoral administrations. He was a candidate for Seattle City Council in 2009. You can reach him in care of editor@crosscut.com.

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Comments:

Posted Fri, Sep 3, 8:33 a.m. Inappropriate

McGinn really has that 'reptilian brain' we've heard about.

Any other mayor would say to themselves, "Hey, this is such an obvious location for such a great set of parks, with tons of volunteers to make it happen, so all I have to do is not mess with it, and it will look like I did a great job as mayor, 'providing' this new park".

But McGinn has something else in mind. To him, a museum is old-fashioned and has no appeal. After all, it's not like he grew up around here and has memories to jog. Call me a cynic, but I'm guessing he wants the city to have more money to pay for late-nite policing in the club districts.

McGinn's willingness to rebuild the central waterfront as a highway, rather than as a park, is another warning sign. Be afraid. This could be the most anti-park administration Seattle has seen.

Posted Fri, Sep 3, 8:41 a.m. Inappropriate

Why punish MOHAI for negotiating a great deal, especially given that the $ is critical to MOHAI completing its relocation and the construction of its new space? The new MOHAI will anchor the new SLU park and emerge as a great cultural asset for the city. I don't think it's fair for McGinn to cut a deal with MOHAI, break it once, and now try to break it again.

This is clearly about the City's immediate budget problems. Maybe McGinn can work on renegotiating with the City labor unions (as Dow has done) to save some $ instead of picking the pockets of an important city arts/cultural institution?

Urbanist

Posted Fri, Sep 3, 9:29 a.m. Inappropriate

IF MOHAI proved to be better negotiators than the city, it is unfair for the city to cry foul and whimper for more money. If MOHAI had botched the deal, would the city be offering to help out this valuable civic asset? I suspect not.

You also have to ask if it is good government to try to fix what could turnout to be a long term budget problem with a one time theft from a non profit arts organization? (Where is the city in one or two years if the economy doesn’t turn around? Eyeing the Opera’s Ring cycle budget?) Already you have to wonder who could negotiate with the city with any reasonable expectation of the city honoring its commitments

Posted Fri, Sep 3, 11:42 a.m. Inappropriate

Why can't MOHAI just tell McGinn to STFU? I'm sure they would have the support of the taxpayers and a good bit of the Council if they did. They negotiated the deal with the state and will be doing their own fund-raising for the move, so I'm missing what leverage the Mayor's office has over them.

normfox

Posted Fri, Sep 3, 12:30 p.m. Inappropriate

MOHAI is going to need all the resources it can to make that building water secure with a good "lake wall" in this era of feared rising waters, earthquake generated lake sunamis and volcanic eruptions flooding river valleys feeding Lake Washington. I'm surprised anyone wants a museum on the water's edge. At least the back of the house can be on higher ground. As for the Mayor, did he go to kindergarten and learn to play well with others?

NorthSeattleBarb

wep

Posted Sat, Sep 4, 9:15 a.m. Inappropriate

I was hopeful for McGinn as the new mayor. Now all I see is a litagator and and obstructionist. He is forever in opposition, being sure we all know he is from New York. Really! I would have never guessed. Please get out of the way and let this city move forward. We are not and never will be New York. We can be a much better city if we can just stop dicussing issues into the ground and make decisions and move on. MOHAI is perfect for that site and Mike will have to get his money somewhere else. Grow up and stop being so process oriented and consensus building. Tell the Mayor to step aside and let's move to get this done.

MelBSea

Posted Sat, Sep 4, 10:54 a.m. Inappropriate

Crosscut: it's "Fujii", two i's.

The mayor's nuts. I can't even tell what Marquardt is really asking for, there is no $, it's not clear what pot of money ($40 mill or the estimated $7 mill) they want to draw from. This doesn't make logical sense and it doesn't make political sense and it doesn't make fiscal sense. What in the world is going on in city hall?

Rob K

Posted Sun, Sep 5, 9:17 a.m. Inappropriate

Quinn, before McGinn became mayor, we were enjoying the part of "Seattle Process" where many groups of people, most of them volunteers, work together to create something of value to society.

In South Lake Union this was working really well. The non-profit Center for Wood Boats was working with the city and the museum, and other historical and environmental groups to create one of the most interesting and beautiful city parks, for its size, in the world.

McGinn is the sole source of the 'obstruction and delay' here, but at least we can thank him for making another aspect of his "leadership" visible. That happens so rarely with McGinn.

Posted Tue, Sep 7, 5:10 p.m. Inappropriate

This is a fubar for sure. Leonard Garfield is one of the most respected, most honorable nonprofit administrators in the region. Whatever he has put together for MOHAI in this deal I am sure is totally above board and credible. I'd put that against city hall politics any day. South Lake Union has been involved in many questionable deals (Vulcan ring a bell?). Save MOHAI from all this interference!!!!! Let Leonard do his deal and the city will benefit. Let the Mayor do HIS deal and we'll lose a valuable and irreplaceable institution of Seattle history.

Posted Wed, Sep 8, 5:05 a.m. Inappropriate

MOHAI has been fund raising for a move since 2003. How much have they raised overall- or was the sale of the land and building the entire kitty.

Posted Wed, Sep 8, 9:38 p.m. Inappropriate

Good job.

Posted Thu, Sep 9, 7:36 p.m. Inappropriate

This renegotiation is a gross injustice. As a teacher and lover of museums, I can testify that MOHAI is exceptional. The programs they put on for students, the conferences they hold for teachers and historians, and the lectures and the events they put on for public are consistently of the highest quality. I am astounded that a relatively small museum can be so outstanding, but they are. If MOHAI has to close down permanently, the whole Seattle area will suffer an incalculable loss. This is unthinkable!

--MagistraJekel

Posted Sat, Sep 11, 12:35 p.m. Inappropriate

That $40 million comes directly out of the pocket of Washington state taxpayers. So let's have a public discussion about whether we want to fund MOHAI at that level. I'm not saying we don't. I'm just saying we want our elected representatives to discuss the merits. It's not a lottery win, it's our money!
Props to McGinn for recognizing this.

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