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.
Crosscut archive image.

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

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.

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'ꀙs 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'ꀙs 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'ꀙs 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, 'ꀜIn February of this year, with the City'ꀙs prior knowledge and consent, we made an offer to sell [the building] to the State for slightly more than the pending $40 million offer.'ꀝ

So did the city know about the $40 million figure and just assume MOHAI wouldn'ꀙt get it?

In correspondence dated Aug. 27, Carl Marquardt responded: 'ꀜFirst 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.'ꀝ

He goes on to say that the real issue is that the City'ꀙs 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'ꀙt 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'ꀙs 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'ꀙs 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'ꀙs mitigation money to house so-called 'ꀜback of the house'ꀝ 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'ꀙt 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'ꀙt exist elsewhere.

Again, we should be very happy this is all coming together. Instead, we'ꀙre 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'ꀙt 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'ꀙs 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.


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About the Authors & Contributors

Jordan Royer

Jordan Royer

Jordan Royer is the vice president for external affairs in the Seattle office of the Pacific Merchant Shipping Association.