- WORKFORCE HOUSING Tenants of Squire Park Plaza talk about their opposition to selling Squire Park Plaza to a developer in July.
Last month, I reported on concerns that Squire Park Plaza—a huge chunk of workforce housing in the Central District—was about to be sold to a private developer who would raise rents. The building's tenants held a press conference on July 11 to protest the transfer of the building from the Central Area Development Association (CADA), a nonprofit, into for-profit hands.
But later that same day, Seattle Mayor Ed Murray told me that the developer had "pulled out [of the deal] because the affordable housing requirement, which was part of the original agreement, does not pencil out."
How'd that happen? It appears that it was all a misunderstanding. Back in February, the city's Office of Economic Development told Council Member Nick Licata, in response to his written questions, that the new owner of Squire Park would not have to abide by the building's minimum affordability requirement. Since the building was built with the help of taxpayer money, that requirement, also called an affordability covenant, mandates that 51 percent of its 60 units remain affordable to those who make 80 percent area median income. (That's $44,750 a year for a single person.) Licata's office circulated that information to other city council members.
CADA and the OED wouldn't tell me who the prospective buyer was, but it's certainly possible, given the mayor's statement, they were misinformed as well.
"That was a staff mistake," says OED director Steve Johnson.
The city agency, whose mission is "to create a robust economy and broadly shared prosperity," didn't correct the error for months—until mid-to-late June, according to spokesperson Karin Zaugg. By then, they'd realized that the affordability covenant would remain in effect, regardless of the sale, until 2027, and could only be lifted before that date by the city council. Squire Park was built in 2007 on government-owned land with $9.7 million in public financing. UPDATE 8/15: The Office of Economic Development says the total public funding in the project was $5.3 million of federal funds managed by the city of Seattle. The $9.7 million figure is according to the Tenants Union.
It's not clear how far-reaching an effect this misinformation had on the sale process. "When we learned of this misunderstanding, we communicated the accurate information immediately to CADA, council staff, the Tenants Union, Squire Park tenants, and others," Zaugg says. "It is our understanding that CADA shared that information with all interested buyers."
Now the building is set to be sold to a partnership between Capitol Hill Housing, a local nonprofit, and Jonathan Rose Companies, a socially conscious New York-based real estate firm. This was disappointing for a committee of Squire Park tenants, who had endorsed a bid for the building by the Low Income Housing Institute (LIHI). LIHI director Sharon Lee had supplied the tenants with a written commitment to extend the affordability covenant on the building for another fifty years beyond 2027. "Neither CADA nor CHH gave us information on who is controlling the partnership between CHH and the Rose Companies," the Squire Park tenants said in a statement. "Nationally, there have been many examples of nonprofit and for-profit partnerships that do not serve the interest of low- and moderate-income tenants."
"I don't want to sign off on some empty covenant over fifty years," Chris Persons, the head of Capitol Hill Housing, told me in an interview last Tuesday. He said the tenants had nothing to worry about. "There’s nobody more committed to affordable housing than CHH and Jonathan Rose companies," Persons said. "We’re the dream team of affordable housing because we can commit to all the affordability priorities of the tenants without using public funds."
The next day, Persons sent me an e-mail: "I just had an extraordinary conversation with Jonathan Rose in NYC. He is willing to agree to extend the affordability per tenant request." That means honoring the minimum affordability requirement until 2064.
The committee of Squire Park tenants, which is called the Central Area Action Committee for Affordable Living, could not be reached today for comment on that development.
"One of the main issues here is that the tenants should have a say," said Ted Virdone, a legislative aide for Council Member Kshama Sawant, who has been supporting the tenants' organizing efforts. "If the tenants have a say, then the outcomes will probably be good. If they’re excluded, then it’s stressful for them and the outcomes are less reliable."