Posted yesterday evening and moved up.

The mayor's office says that the Museum of History and Industry (MOHAI) is getting too much out of a recent deal with the state, and the city is entitled to some of that money.

The issue stems from the imminent expansion of the 520 bridge, which will require widening the freeway through the Montlake neighborhood and demolishing the building where MOHAI has stood for 58 years. The state must pay for the structure and land it condemns, and the city owns that building and McCurdy Park where it stands—so how did MOHAI get money out of the deal?

Last year, the city council authorized MOHAI to negotiate directly with the state to get the best deal it could to help it relocate. The city would have been negotiating "for an old empty building," says City Council Member Tom Rasmussen. The advantage is that the museum—which works in tandem with the city as a historic exhibitor and archivist—could bargain as a cultural institution, insisting the state pay it not just for the building, but to set up a whole new museum (planned at the South Lake Union Armory Building). At the time, the city estimated MOHAI would receive about $15 million for the building, according to Mayor Mike McGinn's office.

Then the news hit City Hall this July. MOHAI had negotiated (extremely successfully) with the state and pulled in a whopping $40 million for the building, and it is expected to make another $7 million for the land.

So last week, the mayor’s office sent a letter to MOHAI saying that the city, which is facing a $56 million budget shortfall next year, wants to renegotiate.

“This is not a time for any one community organization to be taking all that it can get, while others go without,” wrote Carl Marquardt, lead attorney for the mayor’s office. Marquardt asked that MOHAI “renegotiate the division of proceeds” and discuss ways to pay for city staff to move out of the Armory Building.

Is this tactic going to work?

Rasmussen thinks not. “I was quite sure that MOHAI would be shocked to get this after negotiating for years and with the McGinn administration for months,” he says. “I don’t know if it is going to result in any change or success.”

Indeed, the request—essentially changing the terms of its deal with MOHAI long after the ink had dried—got a cool response. The same day, August 25, MOHAI shot back a letter of its own by director Leonard Garfield and board chair Maggie Walker. “We are both surprised and deeply disappointed by the sudden about-face reflected in Marquardt’s letter,” the museum leaders write. ”For almost two months now, we thought we had a deal with you.”

MOHAI says proceeds must help pay for relocating the exhibits, additional storage, and offices at a total replacement cost of $85 million. They add that MOHAI has constructed its buildings largely at its own expense and then conveyed them to the city. Moreover, they note that the city has “been informed” about the progress throughout.

Rasmussen adds that, even though MOHAI did get more out of the deal than expected, “I am not convinced that we should seek anything different than what we negotiated.”

But Marquartd wrote a rejoinder last Friday, sticking to his guns. "The essential point is that the sum of the condemnation proceeds far exceeds what Council anticipated when it approved the MOHAI development agreement last fall," he writes. "We question whether this is a reasonable and equitable outcome for the city."

If anything, it seems possible that the city could get some of the $7 million in land value—a deal which hasn't been settled—but the $40 million is mostly likely untouchable. But almost certainly, the relationship between the city and MOHAI is on shaky ground.