Fighting "thuggery" in downtown Seattle

On Aug. 9, I participated in a panel discussion at the Seattle Public Library on the occasion of the reissue of a new edition of Soul of the City by Alice Shorett and Murray Morgan (University of Washington Press, $18.95). The book -- an excellent illustrated history of the Market -- has been updated since its original appearance in the 1980s and includes a new chapter detailing the near-death experience of the Market in the late '80s and early '90s when it was taken over by a group of New York investors, The Urban Group, known locally as THUG. The story has current relevance. This week at The Daily Weekly, Seattle Weekly's news blog, Rick Anderson raises the memory of THUG in pointing to a story in The New York Times about the booming commercial real-estate market in downtown Seattle, a market that is attracting mega investors and echos the Market's New York takeover: The uproar years back was that part of Pike Place Market was being handed over to New York investors. Now it's the whole town -- once named, you'll recall, New York-Alki. It wasn't enough that Tishman Spyer Properties of New York bought the Marketplace I and II buildings on Western Avenue for $56 million a year ago; it has now sold the four-story and seven-story structures for $83 million -- or a city record $655 a square foot. The buyer, by the way, is BlackRock, a New York investment firm with a $1.2 trillion management fund -- one of many NY firms investing in Seattle. (Boston owns a big chunk as well: Beacon Capital Partners of Beantown is considered Seattle's biggest landlord after recently buying 14 buildings from the Blackstone Group -- of NY). Yet to come is the sale of the Clise properties in the Denny Triangle to a single investor. It may go for as high as $1 billion and thus far some 69 high-roller suitors have asked for tours of the properties. There are few local owners who can come up with that kind of dough. The stakes are high, though: as David Brewster points out, it's a "huge opportunity for public, urbanistic benefits." It also has a high potential for urbanistic catastrophe, as the single buyer may not be so civically high-minded, as dense clusters of towers and soulless mall-like commercial spaces in cities everywhere attest. Do we really want a 12-acre high-rise, upscale version of Westlake-meets-Hong Kong plunked in our midst? How about one built by my personal choice, Donald Trump? It's true that the private buying and selling of property in Seattle to New Yorkers and anyone else isn't the same as what happened with the Pike Place Market -- a public, historic entity that was effectively privatized without the public's knowledge or consent -- but the THUG episode is a timely reminder that even in the best of circumstances, keeping control of what happens to key parts of the city is an enormous challenge. On the panel were several key players in the fight against THUG: Shelly Yapp, the onetime aide to then-Mayor Charles Royer, who was sent into the breach to get control of the Market and wound up running it for nearly a decade; moderator Jackson Schmidt, one of the lawyers who went to battle against THUG and is now chair of the Pike Place Market Development Authority (PDA); and Peter Steinbrueck, the city council member, who organized the public yet again to "save" the Market, just as his father Victor had when the market was "saved" previously by citizen's initiative in the early 1970s. Rounding out the panel were Suzanne Hittman, granddaughter of onetime Market patriarch Joe Desimone, and author Shorett. To quickly recap the THUG episode, in the 1980s, the "saved" Pike Place Market was strapped for cash, partly because the reliable flow of federal dollars stopped after the defeat of Sen. Warren G. Magnuson by Slade Gorton in 1980. The Market's public stewards -- the PDA -- entered into a series of agreements with a New York investment syndicate that appeared to give the group title to the Market's key properties in exchange for cash. What THUG got was a tax shelter: they were able to use the Market's losses to offset the income of their investors. It was all handled very quietly -- virtually in secret as far as the public was concerned. When the tax laws changed in the mid-1980s, THUG began to assert its "ownership" of the Market. The thing was, the "sale" of the Market was essentially a sham for tax purposes. Nevertheless, on paper, it appeared that the public stewards of the Market had sold it out from under the public and the new "owners" now wanted to run the place and redevelop the property. The complex deals became public and an outraged city woke up wondering how a institution that had been deemed historic and put under the custody of the public could have wound up being owned by a bunch of New York sharks. The city went to war with THUG and eventually won the Market back in court, partly on the basis that the public stewards had no right to sell it in the first place. THUG was bought out and the was Market "saved" again. But it took a full-court press in the courts -- and the court of public opinion -- by the city, state, and press to recover the Market. One shudders to think what might have happened if a less Market-sympathetic administration had been in City Hall at the time. Certainly there were previous mayors who would have loved to redevelop the Market site. And that's a theme throughout Shorett and Morgan's Soul of the City. Seattle has long been of two minds about the Market, from its very inception. The centrally located, valuable view property has been eyed for everything from parking garages to upscale hotels to a shopping center to a central park by planners, developers and politicians for a century -- the very kinds of amenities Seattle covets and discusses endlessly today. The first concepts about leveling the Market were put forth in the 1920s and were regularly updated through the 1960s, including the downtown Central Association's 1963 proposal to bulldoze everything between Western and First Avenue and Union and Lenora. With the benefit of hindsight, it's easy to look upon previous generations of would-be Market spoilers as selfish, greedy civic oafs. And some were. But in reading about them today -- and their opponents -- one finds strong echoes of current debates about urban expansion. Downtown parks and upscale amenities are still a goal; economics are driving the poor and middle class out of the city; the push and pull between haves and have-nots continues; the neighborhoods around the market are being dramatically redeveloped in ways the put pressure on the populism that is at the core of the Market's identity, and its raison d'etre. The lesson THUG demonstrates is that "saved" is a word we should probably never use in conjunction with the Market, or any preserved entity. It implies a finality that is simply not real. Proof of that is that the Market is going to need a substantial amount of money to keep going. A levy of some kind will probably be on the ballot in November of 2008 -- likely along with a request for Seattle Center. The Market alone would like $70 million. It's costly to keep rents low in aging, high-maintenance structures -- and a lot of work on the market has been deferred over the years. The good will toward the Market is such that voters will be sympathetic, but nothing is certain. And the financial need proves the work of preservation is an ongoing task of stewardship and adaptation. The Market is a living organism that is in an urban ecosystem -- the whole system has to be maintained to keep the organism healthy. Back in the 1950s, with the Market under threat, artist Mark Tobey was alarmed at the changes he saw in Seattle: "Landmarks with human dimensions are being torn down to be replaced by structures that appear never to have been touched by human hands. There seems a talent today for picking the most beautiful and personal places to destroy -- what we might call an aesthetic destructive sense." And that brings us back to Rick Anderson's comparison of the current commercial real-estate climate with the THUG debacle. We know that there are huge changes to Seattle's cultural ecosystem, and much of that pressure is coming from forces outside the city. And much of it is being encouraged by city policy. That means, in those areas that are less protected than the Market, we have to be conscious of what we, as citizens, are willing to allow for the sake of the city's soul.