Since April, Selig has donated $273,156 to Monorail Recall, a campaign that aims to dismantle the voter-approved Seattle Monorail Project by revoking its ability to build the monorail in city streets. Of Selig's contribution, about $76,000 has gone to two companies hired to gather signatures to place the initiative, I-83, on the November ballot. The rest has been largely in so-called "in-kind" contributions, including the use of Selig's personal attorney, Bill McInerney, to defend the campaign against an ongoing lawsuit challenging the legality of the initiative.
Over the years, some in the business community say, the man behind the latest effort to kill Seattle's only hope for a rapid transit system has developed a reputation as someone who doesn't pay his contractors until they sue him or the company he founded and controls, Martin Selig Real Estate; a search of King County court records reveals dozens of suits that have been filed against Selig or his company for foreclosure or breach of contract since 1980. In most cases, Selig settles with the contractors before the suits can go to trial. Meanwhile, observers say, he invests his profits into new real-estate ventures. (Selig himself declined to comment on any of the lawsuits that have been filed against him, saying only that "all of those things have been resolved to satisfaction." When asked if the number of lawsuits against him was unusually high, Selig said, "In the business world, there are always disagreements. All of them were settled or resolved.")
In many ways, it's Selig's willingness to do what other developers won't that has made him one of the most successful (and prolific) developers in the city's history. "He is a maverick, and there is a place in the world for mavericks," local developer Jim Potter says.
It's impossible to view Selig's unprecedented contributions to the anti-monorail campaign outside the long shadow of his decades-long career in Seattle, during which he has built a reputation for going to the brink of ruin and emerging--against all predictions--stronger than before. Selig's history here has been a roller-coaster ride. Starting in the 1970s, the developer built an empire that once encompassed 6.5 million square feet--nearly a third of Seattle's downtown office space. While his fiefdom has shrunk considerably since its peak in the mid-1980s, Selig has maintained a formidable (and fiercely independent) presence in Seattle's development world. He has little interest in groups like the Seattle Chamber of Commerce and the Downtown Seattle Association, other developers say, and is rarely seen participating in charity events or on volunteer boards. "I'm too busy doing what I'm doing" to go to Chamber meetings, Selig says. (Few Seattle developers wanted to comment about Selig on the record.)
"He's never been much of a team player," Steinbrueck says. "He's done everything his own way and on his own terms." Selig, unlike most big downtown developers, has no business partners; the profits (and losses) are his alone. What others see as risk, Selig says, he sees as "opportunity."
"When you look at the population of developers, Wright Runstad and Stagen and Clise, he never buddied with them. He saw them as the competition," says Art Skolnik, a longtime Seattle architect who once worked as a consultant for the developer. Skolnik calls Selig "the product of American capitalism. He doesn't break laws," Skolnik says.
What he does do is test their boundaries. A notorious case in point was the Columbia Center--at 937 feet, or 76 stories, the tallest building in Seattle when it was built and for years the tallest west of the Mississippi River. (The building was displaced as tallest in 1989 by L.A.'s US Bank Tower, which tops out at 1,018 feet.) Steinbrueck's father, the late Victor Steinbrueck, once called the tower "obscene... a flat-out symbol of greed and egoism."
The story of how such a structure could get built in Seattle says a lot about the city's mixed feelings toward high-rise developers such as Selig. Back in the 1980s, the city was trying to encourage retail development downtown by offering a "density bonus" of extra floors to developers who agreed to include a retail plaza in their buildings. Selig's shrewd maneuver, Peter Steinbrueck recalls, was to ask what would happen if he added two stories of retail--or even three. As it turns out, Steinbrueck says, "the sky was the limit. And he took it to the sky."
The Columbia Center--with its three floors of retail and 73 stories of office space--was the last mega-high-rise constructed in Seattle. Four years after it was built, Seattle voters passed the Citizens Alternative Plan (CAP) Initiative, which limited building heights downtown. But today, the tower stands as a monument to Selig's mammoth ambition. "People said, 'It can't be done. It'll never be successful; you can't fill it with tenants.' And he did," Steinbrueck says. "He uses every tool--even those that aren't in the book."
Selig doesn't deal in small change. During his time in Seattle, Selig has paid--and owed--millions to various contractors and business partners, some of whom have sued the prolific developer again and again before signing up for yet another business partnership. Since 1980, the developer has been sued dozens of times, often by contractors who alleged he failed to pay them for their services. When I contacted Arnie Willig, the attorney for a construction company that sued Selig for failing to pay for remodeling work on one of Selig's buildings last year, he burst out laughing. "It's funny you should call" about Selig, he said. "I just filed another suit against him." (The earlier lawsuit, for $227,000, ended in settlement; the new lawsuit is for nonpayment on that settlement.)
Other lawsuits have dragged on for years, reaching resolution only after protracted and often bitter battles. (One such lawsuit, by Howard S. Wright Construction, led to a series of suits and countersuits that Selig told the Puget Sound Business Journal had effectively ended his relationship with the prominent local construction company.) In 2001, Selig was sued by American Building Maintenance (ABM), a union company that provided janitorial services in all of Selig's buildings. The suit alleged that he failed to pay the company, bounced 21 checks totaling more than $1 million, and breached a 10-year contract Selig had signed with ABM as part of an earlier agreement. The lawsuit alleged breach of contract, dishonored checks, and deceptive business practices.
ABM's attorney Daniel Brown says the ABM janitors quit providing services after Selig failed to pay them. That lawsuit was eventually settled, and Selig switched to a nonunion company, Allied Building Services, a move that prompted protests by the Service Employees International Union and a defamation lawsuit against Allied by Selig. Ultimately, though, even nonunion Allied decided it had had enough; it, too, sued Selig for nonpayment (of $367,000) in 2003, and eventually stopped providing services. (Brown also represented Allied.) That lawsuit was ultimately resolved through arbitration, but by that time, Allied, too, had quit.
"His reputation of being in arrears on payments with liens on his property goes back forever," says housing activist John Fox, who once worked with Selig on a development proposal that would have preserved a low-income apartment complex downtown. "He realized he could make more money holding onto the cash and using it, and then dealing with the penalties later."
The tactic works, observers in the development community say, because contractors have little choice but to stay on Selig's good side. "People in the construction industry need to stay close to" Selig, because he's one of the biggest developers in Seattle, attorney Willig says. "They know they're going to do more work in the future, and they want to be able to get those contracts." As long as contractors "understand that that's the way you have to do business," says local developer Jim Potter, who chairs a real estate firm called Kauri Investments, they're willing to work with him. "He's a good businessman and he has a good sense of what his customers need." Another observer--a longtime player in Seattle's business world who wanted to remain anonymous--calls Selig "a very aggressive businessman who tends to go around corners pretty quickly."
In its lawsuit, ABM alleged that Selig didn't lack the ability to pay his janitors; he simply chose to divert his money into other business ventures. At a meeting with ABM, the suit claims, "Selig admitted that rent proceeds from his buildings were being diverted to new projects Selig has under various stages of development, rather than paying vendors and service providers." In addition to spending money that should have been used to pay his janitors, the suit added, Selig continued to withdraw some $95,000 a month for personal use, even as his checks to ABM bounced or failed to materialize.
The problem with leveraging your earnings so heavily, Skolnik says, is that "once you get stuck in that cycle, you can't get out. If there's a hiccup in the process where one thing doesn't fall into place, you get overextended." The house of cards is only as strong as its base; when that collapses, the whole house goes down with it. Never was that more true than in 1989, near the end of the '80's development boom, when Selig had to sell the Columbia Center, his landmark building, for $350 million to forestall foreclosure on his other properties.
Government agencies, too, have pursued Selig for nonpayment over the years, using lawsuits, liens, and thinly veiled threats to recover their debts from the developer. Back in March, when Seattle City Light delivered an ominous letter to tenants at Selig's headquarters at 1000 Second Avenue (including the Washington State Housing Finance Commission, the Seattle Immigration Court, and several prominent law firms) it appeared for a moment that Selig's latest house of cards was about to come crashing down. At the time, Selig owed the electric utility nearly $950,000, and his account was nearly $635,000 past due. "We understand the loss of electricity service will be extremely disruptive to your business, and we are very sorry that Martin Selig Real Estate has allowed its accounts with City Light to fall far in arrears," the letter, written by deputy director Joan Walters, said. "City Light will continue to work with Martin Selig Real Estate in the hope that full payment will be made and an interruption of service can therefore be avoided."
The letter wasn't the first time City Light had been compelled to play rough with the delinquent Selig. As far back as the 1980s, according to the Puget Sound Business Journal, Selig had a reputation for failing to pay his electric bills. In 1994, the developer owed more than $300,000 to City Light; and as recently as 2003, the utility had threatened to cut off his power if he failed to pay the $631,000 that was then overdue.
A string of e-mails between City Light managers and employees of Martin Selig Real Estate reveals that Selig's representatives used tactics from avoidance to outright evasion to avoid the city's bill collectors. Again and again, Selig's employees promised payment, partially delivered, and then disappeared, responding only after aggressive pursuit by City Light officials. In a January e-mail to Selig's controller, Sue McGuire, deputy superintendent Walters expressed frustration at getting the run-around from Selig's financial advisors. In a letter dated January 27, she said, Selig executive Peter Parker had promised that the company would pay City Light $300,000 by the end of the week. Instead, the company had delivered only $133,790--less than half of what the company promised. "You are giving me different amounts and different dates. What's the real story?" Walters wrote.
The e-mails (obtained through a public-records request) continue through July, tracking a long series of miscommunications, missed payments, and increasingly bold evasions. "I have tried to make contact with you both several times over the last week or so," City Light account executive Cheryl Binetti wrote on July 26. At the time, Martin Selig Real Estate owed nearly $950,000. City Light spokesman Bob Royer, contacted a few days later, would say only that Selig had "resolved" the matter. Given Selig's long history of nonpayment, however, it seems unlikely that his battles with City Light are over. Nor is City Light the only government agency to pursue Selig over the years: In the mid-1990s, the developer had a run-in with the IRS, which filed liens against his properties that totaled around $487,000, the Puget Sound Business Journal reported. He has also been sued by King County--for failing to pay local improvement district assessments--and by the state, for unpaid industrial insurance taxes. And in 1994, he owed the city's water department $10,000, according to the Seattle Times.
Observers have spent years wrongly predicting Selig's financial demise. In 1997, a real estate investment company, Starwood Capital Group, bought some $151 million in mortgages against 1.25 million square feet of office space--more than half of Selig's considerable empire. At the time, debate raged about whether Selig would be able to bring his entire debt current and retain the buildings; according to the Puget Sound Business Journal, "An attack [on Selig's debt] by Starwood could become the killer blow against Selig that some have predicted--mistakenly, thus far--for years."
As he often did, however, Selig bounced back from what seemed like a near certain doom. In 1999, he bought himself out from under the Starwood loan, proving the naysayers wrong once again.
Why would a guy like Martin Selig decide to become heavily involved in politics now, with his long career in Seattle nearly complete? (Although Selig has given money to a few, mostly Republican, candidates--including $2,000 to Patty Murray challenger George Nethercutt and $6,000 to President Bush-- and has even been spotted wearing a "W" tie, his earlier contributions are dwarfed by the checks he's written to the Monorail Recall campaign.)
Observers who know him seem baffled at Selig's sudden immersion in the anti-monorail cause. "Martin is legendarily self-interested. He's never paid attention to politics before. And now all of a sudden he's Mr. Civics?" one business source who wanted to remain anonymous says. Even when the city council was debating the CAP initiative, Steinbrueck recalls, Selig stayed in the shadows. "Here's the biggest builder in the city and he didn't get involved in the campaign," Steinbrueck says. "If there was ever an issue that someone in his position would want to fight, that would be it."
Even the obvious explanation--Selig owns several buildings along the monorail's 13.6-mile route, including his headquarters on Second Avenue--seems inadequate to explain his nearly $200,000 investment. "Yes, our views will get partially blocked," says Potter (whose company owns two properties along the route), "but that's life in the big city. It kind of blows me away that [Selig] came out so against" the system.
For his part, Selig rejects that explanation, saying that while he objects to the monorail's "aesthetic," that isn't the main reason for his opposition. And, although he owns at least nine, and as many as 11, personal vehicles (including two Harley Davidsons, two Mercedes Benzes, and as many as three SUVs, according to state Department of Licensing records), Selig says his $2,500 annual monorail tax isn't the reason for his opposition, either. Instead, he says, he believes the monorail will spoil Seattle Center, stick Seattle residents with a "phenomenal" tax bill, and fail to serve the residents of Queen Anne and Magnolia, where Selig lives.
Given the amount of cash Selig has poured into the anti-monorail effort, it's unfortunate that he can't offer a better rationale--even a self-interested one--for bankrolling the recall campaign. Monorail Recall, after all, could not exist without Selig, who has provided more than 75 percent of its funding. Selig's involvement sets a scary precedent for Seattle's initiative process: Suddenly, any wealthy developer with an ax to grind can force an initiative onto the city's ballot. Whether Selig succeeds in his effort to kill a transit system for the rest of us will be for voters to decide in November.