Date: Thu, 13 Feb 2003 11:31:09 -0800


The Story of the Lillian Apartment Demolition in South Lake Union – the “Seattle Way” of catering to special interests and why  we need new leadership at City Hall


Developers can scream all they want about “over-regulation” and red tape down at the Department of Planning and Development (DPD).  But in the case of the Lillian, the only excessive intervention we saw consisted of a systematic catering to Allen’s needs as well as a

generous re-working of code requirements aimed at ensuring demolition of the building.  Ms. Sugimura played a direct role in the handling of this case not only as acting director of DPD but also in her capacity of deputy director in charge of code inspection – dual positions she has been handling since the beginning of 2002.


Here’s a little true story about DPD and Ms. Sugimura’s handling of the Lillian demolition.


At a DPD hearing held last Summer, 2002, DPD code inspectors acknowledged they met with Vulcan representatives in April of 2002 at the Lillian Apartments when the building was still occupied.  Videos of the building taken by residents at that time and submitted for the record show a decent structurally sound building with all systems in place. 


One month later in May, 2002, after Vulcan vacated the building, DPD undertook a formal inspection of the building.  By then the interior of the building had been laid waste. Surrounding neighbors reported that they saw Vulcan representatives carting out heaters, refrigerators, fixtures, you name it, out of the building for at least a month prior to DPD’s formal inspection. It was obvious to all that Allen’s contractors were moving quickly to gut the building in an effort to obtain a declaration from DPD that the building was unfit for habitation thus clearing the way for immediate demolition of the building.


Put in place at the request of the community over a decade ago, the City Council adopted regulations barring demolition of low income housing for parking lots and required developers to first obtain permits for a new development on such a site before demolition could proceed.  This helped to prevent developers from knocking down low income apartments or prematurely abandoning them when they had no immediate redevelopment plans on the site – something that had become a pretty common practice in Seattle.  It also gave communities and city representatives more time to convince an owner, like Paul Allen, that it was in their interest to save these valuable low income structures. The only way Allen could immediately demolish the Lillian was to prove to DPD that the building was a hazard and uninhabitable.  And the only way he could do that was prove that the cost of fixing up the Lillian exceeded 50% of the replacement value of the Lillian.


Code Inspectors waited at least a month after their first visit to the building before they went back in and calculated the cost repairs needed at the Lillian giving Allen time to remove systems in the building.  Worse, when questioned at a public hearing held in June, Mathew Moeller, DPD on-site inspector, indicating that at their April meeting at the Lillian, he actively assisted Vulcan representatives by identifying systems in the building that could be dismantled to obtain a declaration of uninhabitability and immediate order to demolish. 


After DPD’s inspection in May and after the community brought expert testimony to bear indicating that the cost of repairing the Lillian still was reasonable and far less than 50% of the cost of replacing the building – DPD decided to go back in and do another inspection of the building.  That inspection was not undertaken until three months later on August 16th after the owner had removed still more systems, obviously for the purpose of making absolutely sure that the building would be so damaged it met the formal standard of uninhabitability.  


In spite of three months of this, experts from the non-profit community still were able to counter that the building could be made habitable at a cost less than 50% of its replacement value.  When DPD released their preliminary estimates, not only had DPD overestimated costs of repairing the building, they had underestimated by at least a million dollars the cost of replacing the Lillian. They also had completely ignored overwhelming evidence that Allen brought in crews to wreck the building to boost the cost of repairs.


After pondering this issue for another 2-3 weeks, amidst considerable controversy, on September 6th, ignoring the community and Allen’s shenanigans in the building, Diane Sugimura formally declared that the building was uninhabitable and could be demolished.  One day earlier, according to memos we obtained through a disclosure request, Ms. Sugimura had extended conversations with Paul Allen’s attorney and one of his lobbyists – a former City Council aid.


The Displacement Coalition was served via regular mail notice of the decision on Sept 9th.  According to the land use code, we had 10 days’ from the “date of service….via certified mail” in which to file an appeal to the City’s Hearings Examiner. To confirm this, we spoke directly with three staff at DPD who all told us that our right of appeal to an order to demolish lasted until Sept. 19th.   We filed our appeal on the 18th.  Allen’s attorneys promptly challenged our right of appeal arguing that the appeal period really began on the 6th and ended on the 16th, since the 6th was the date Sugimura’s decision actually was “issued”.   I and another member of the Coalition responded with affidavits identifying the DPD staffers who told us the appeal ended on the 19th.  Vulcan then went to all three of these staffers (undoubtedly with Sugimura’s approval), and obtained written affidavits denying that they told us we had until the 19th to file the appeal.


On Wednesday, October 9th, the City Hearing Examiner officially rejected our appeal.  A few days before that, DPD went ahead (without notifying those of us who were on record opposing it) and issued the demolition permit and waived environmental review requirements that normally precede demolition permits.  How they could issue the demolition permit while a Hearing Examiner appeal was still pending is not clear.  On the 9th, after the Hearings Examiner’s decision and with a demolition permit already in hand, Allen began to assemble his wrecking crew and get equipment out to the site of the Lillian.  By Friday, crews were busy preparing the building for demolition early Saturday morning. Not until surrounding residents saw the wrecking crew assembling Friday morning, were we alerted to pending demolition.  Only after desperate calls to DPD and the Hearings Examiner did we confirm that indeed our appeal had been dismissed. At no time, did anyone from DPD alert us to this development.  A desperate attempt was made that Friday afternoon by our attorney to stop the demolition but she literally got to the courthouse five minutes after the doors closed - too late for us to attempt to obtain a temporary restraining order.  That weekend the Lillian was destroyed.


DPD gave final clearance for demolition on Friday, knowing that we had not been notified and failed to stop the destruction of the building over the weekend effectively denying us due process and a right of appeal to court. According to the relevant sections of the land use code, any person may file such a petition within 21 days of issuance of the Hearing Examiner's decision. Yet, on Friday, DPD gave final clearance (before we had even been notified) for demolition to begin over the weekend and long before this 21 day appeal period had expired.  


According to the code, an extension of time for compliance with an order may be granted by the Director upon receipt of a written request ….or “The Director may, without a written request, grant an extension of time if in



    Director Sugimura

the Director's opinion such an extension is warranted.”  Two members of our group had direct conversations with Ms. Sugimura made pleas to the Director to stop the demolition, outlining that our due process had been denied.  We were ignored and the building came down over the weekend.  


This wasn't just a simple case of the system breaking down - the system was openly and blatantly abused to serve one developer. And this was done under Ms. Sugimura’s charge and direction.  We don’t believe this is an exceptional case.  The department and Ms. Sugimura routinely preference developer interests over neighborhood and low income housing needs.  One need only review her written comments offered to the Council as part of her current confirmation process. When asked to explain how DPD can better address and prevent opportunities for demolition of low-income, she states:       


“Providing and preserving low-income housing is an important goal for the City, but I believe it is primarily in the hands of the Office of Housing, the federal government, the developers and the citizens of Seattle”. …. DPD has responsibility for administering and enforcing adopted regulations.  However, other than for landmark structures, there are no regulations that prevent demolition of low-income housing….  Incentives for creation of more housing are much less risky and more likely to produce the desired results. “


It’s obvious from these comments that she conveniently chooses to ignore the very large role her department does play in regulating and controlling the loss of low income housing in our city. Unfortunately, she seems more interesting in accommodating demolition.



After the Lillian was demolished, the Displacement Coalition did file an appeal in Superior Court to force a remand of DPD’s decision to issue a demolition permit but, obviously, this was somewhat after the fact.  The site by then was a pile of rubble.  Nevertheless, we hoped to make an important point, and drag the developer and city through a process that might force the city and developer to provide mitigation – money for replacement housing at comparable rent levels.  However, our case was then summarily dismissed. We could have filed an appeal or gone to another court and raised other issues, but the cost of doing so would have been prohibitive.  We dropped our court challenge. 


We have learned that in the wake of all this, that the City has directed some of the Paul Allen’s Vulcan mitigation money into a Low Income Housing Institute (LIHI) low income housing development slated for construction in Cascade.  The project would provide low income units for homeless youth and be managed by the Denny Youth Shelter Program.  These mitigation moneys were attached as a condition by the City Council for the sale of six parcels of city land located in South Lake Union to Paul Allen early in 2002. We also have heard that Paul Allen is considering donating additional funding for low income housing development in South Lake Union but as of this date, these rumors are not confirmed.


The community also has become better organized and continues to voice its concerns about the redevelopment of its neighborhood. However, they are taking on a steamroller of a political machine that currently had the ear of most of Seattle’s elected officials especially the Mayor.  Mayor Greg Nickels, elected two years ago on a platform that included a call for more responsiveness to neighborhoods, the Mayor has proceeded to fully embrace Paul Allen’s plan for South Lake Union.  He has also completely ignored the community’s neighborhood plan and development guidelines.  The Displacement Coalition remains active in the area and is currently challenging proposed changes to zoning code in South Lake Union drawn up by the Mayor to accommodate Paul Allen’s plan to turn the area into the biotech capitol of the Northwest. This plan is aimed at accommodating five times the amount of growth called for in the neighborhoods plan and growth targets for this area through the year 2020.  It would add 10 million square feet of office space and require over one half billion in added infrastructure paid for at public expense. The Coalition will continue to raise concerns until costs and other impacts are assessed and cost sharing mechanisms are put in place to ensure that Paul Allen and other developers pay their fair share of the costs accompanying this staggering level of growth.


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