Category: Business

Business, legislature, Taxes, Tech

House Finance Committee Hears Testimony on Historic Capital Gains Tax Legislation

By Leo Brine

On Monday morning, the House Finance Committee took up Sen. June Robinson’s (D-38, Everett) historic capital gains tax legislation, which the Democratic-controlled Senate passed two weekends ago on March 6.

During the committee meeting, tech industry lobbyists and conservatives tried to slow the bill’s momentum. Tech lobbyists said the legislation, which calls for a 7 percent tax on capital gains of more than $250,000, would cause small tech startups to flee the state. Republicans chimed in, saying the tax wouldn’t merely drive away business, but it would drive away wealthy people and even the tech industry as a whole.

Specifically, the Washington Technology Industry Association (WTIA) testified that the tax will harm small tech-startups’ ability to recruit employees because stock options (which count as capital gains) would likely be taxed when the employee sells them.

According to the WTIA, stock options are a “primary compensation strategy” for startups. By offering stock options, startups can pay their employees lower salaries while allowing them to buy shares of their employer’s company at a low fixed price. Employees can then sell their shares when the company goes public or is bought out.

Molly Jones, vice president of government affairs for WTIA, implied that tech startups would pack up and head out of Washington if the tax passed. “We are concerned that passage of the capital gains tax will further drive founders, startups, jobs and future drivers of employment and economic growth out of our state,” she said. Her association polled startup members and found, she said somewhat obliquely, that 32 percent were “evaluating whether to relocate their headquarters.” She did say specifically that over 10 percent had already begun looking outside of Washington.

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Republicans piled on, saying the bill will drive the state’s wealthiest to uproot and live elsewhere. They also said the tax will eventually start to affect more than the minuscule 0.23 percent of Washington residents the Democrats estimate would be impacted by the tax.

Republicans also foreshadowed their strategy going forward if the Washington State Supreme Court eventually takes up the bill, by labeling it an unconstitutional “income tax” and comparing it to previously failed income and graduated income tax bills.

House Finance Committee Chair Rep. Noel Frame (D-36, Seattle), who told PubliCola last week that the bill is a priority, kept the discussion moving; 100 people signed up to testify, though only 28 spoke. Nearly 4,000 people signed their names into the legislative record, with more than half, 2,380, signing in support.

One Seattle tech worker, Kevin Litwack, who has received stock options in the past, contradicted the spokespeople for his industry by testifying in support of the bill. “Of course, the tech industry pays well,” he said, “but we don’t need a vast fortune.” Litwack said his peers who view taxes as an obstacle to amassing huge amounts of wealth may “take their money and run,” but “even more will come to replace them, drawn by the values of community and shared responsibility that our state embodies. We, not those purely chasing wealth, are the ones you should want here to build Washington’s future.”

None of the Democratic legislators on the committee spoke to the removal of an emergency clause from the bill that would have put the tax in place immediately and protected the bill from voter referendum. Moderate Sen. Steve Hobbs (D-44, Lake Stevens) sponsored and passed an amendment on the Senate side that removed the clause, irking progressives such as Seattle State Sen. Joe Nguyen (D-34, Seattle).

The bill will head to a finance committee executive session for a vote “soon,” Rep. Frame’s office told PubliCola. The Democrats have an 11-6 majority on the committee. From there it would go to the House floor, where the Democrats are also in control.

Arts, Business, City Council, Economy, Maybe Metropolis, Mayor Durkan, Transit, Urbanism

Maybe Metropolis: Night Vision

by Josh Feit

Mayor Jenny Durkan’s proposed 2021 budget eliminated a position that the city’s cultural community believes is essential, particularly as the COVID-19 crisis is strangling city nightlife: The Nightlife Business Advocate, also known as the Night Mayor. Fortunately, city council member Andrew Lewis took quick action to restore the position last month, getting four more council members—a majority—to sign on as cosponsors to his budget amendment.

The $155,000 save is on track to be part of  next week’s budget deal. I point out Lewis’ pivotal role because he’s the youngest council member (he just turned 31 this week), and still values nightlife as an attribute of city life. “It’s always bothered me that nightlife is seen as something that needs to be managed,” Lewis told me. “I think it’s something that needs to be cultivated.”

That’s essentially what the position, a formal liaison between nightlife businesses and city regulators, was created to do: Nightlife Advocate Scott Plusquellec helps music venues navigate the city’s complex licensing and permitting bureaucracy as well as helping with state regulators such as the Washington State Liquor and Cannabis Board. (Plusquellec was a legislative staffer in Olympia before coming to work at the city.)

The position was created in 2015 and housed in the Office of Economic Development’s Office of Film + Music under the office’s then-director Kate Becker. A veteran of Seattle’s music scene (and its storied battles against things like the Teen Dance Ordinance), Becker was both a founding member of all-ages venue the Vera Project and the Seattle Music Commission. When Becker left in early 2019 to take a job with King County Executive Dow Constantine as the County’s first Creative Economy Strategist, Plusquellec lost his high-level ally.

Becker was never replaced. After Becker left, Plusquellec reportedly had to write up a memo explaining his position to Mayor Durkan’s new OED director Bobby Lee, who started heading up the department in the summer of 2019. Judging from the mayor’s proposed cut, the new regime was not convinced.

Continue reading “Maybe Metropolis: Night Vision” →

Affordability, Business, City Hall, Economy, Mayor Durkan, State of Washington

Guest Editorial: Seattle’s Restaurants Can’t Wait for COVID Relief
Photo by Belinda Fewings on Unsplash

By Debra Russell and Jessica Tousignant

The lockdown was a necessary step in the fight against the coronavirus pandemic, but we couldn’t predict what it would mean for businesses. Restaurant owners didn’t know what to expect.

We were so grateful when Seattleites stepped up and supported us by ordering food for takeout. You were patient and generous as we built an entirely new business model. It was a bumpy transition, but you reminded us that we’re all in this together. Even now, your takeout orders are keeping many of us afloat.

But we can’t forget that our members who are hanging on are the lucky ones. One of the most frustrating aspects of the current economic downturn is that we don’t have enough data to understand exactly how bad things really are. It’s unclear how many neighborhood businesses have closed permanently since March.

The clearest overview of the economic impact on businesses nationwide arrived in a recent report from Yelp, which showed that of all the businesses that closed since March , about 61 percent have now closed permanently. That’s 97,966 businesses wiped out nationwide. Due to the customer-driven nature of Yelp’s reporting, this almost certainly represents an undercount—and in Washington, the numbers are likely even worse.

When ordinary people don’t have enough money to spend at local businesses, those businesses don’t make enough money to stay open.

The Yelp data confirms what we have suspected to be true: We’ve already lost half the businesses that had to temporarily close for lockdown, and the rest are imperiled. A majority of Seattle’s neighborhood restaurants will likely close by the end of the year.

Let’s be clear: this isn’t on our customers. They’ve done more than their part to keep us afloat. But the people and organizations who are supposed to use their resources and visibility to stand up for and protect small business have been entirely absent.

Local leaders claimed we should wait for the federal government to lead the way in the economic response to the pandemic. But the US Senate adjourned for vacation until September 8 without any agreement on a new stimulus plan. Since the additional $600-per-week unemployment benefits written into the last stimulus package were allowed to expire, some of our members report business has dropped by as much as 25 percent. When ordinary people don’t have enough money to spend at local businesses, those businesses don’t make enough money to stay open.

For years, powerful business interests like chambers of commerce, the Washington Hospitality Association, and others have used small businesses as a political football. Today, small businesses are shuttering around Seattle, people are losing their jobs, and these same organizations have quietly looked the other way.

The federal government told states and cities that they’re on their own, and local leaders have failed to step up to fill the void. Mayor Jenny Durkan, for instance, vetoed the expenditure of emergency funds—as though this economic collapse isn’t the biggest emergency most Seattleites have ever seen. (The city council subsequently overturned that veto, but Durkan’s budget would reallocate the money for other purposes.)

Continue reading “Guest Editorial: Seattle’s Restaurants Can’t Wait for COVID Relief” →

Business, Economy, Maybe Metropolis, neighborhoods, Transportation, Urbanism

Maybe Metropolis: The Pandemic Has Forced Seattle To Reconsider Its Neo-Suburban Model

By Josh Feit

Judging by the sheer number of permits the city has issued in the past five months allowing businesses to turn sidewalks, parking spots, and city streets themselves into places for people to hang out, there’s an unforeseen consequence of the pandemic: A citywide Seattle neighborhood renaissance.

Under a temporary program called “Safe Starts,” SDOT has issued 135 such permits since the COVID-19 crisis hit, with 73 more local business requests for permits in the queue. (The numbers, based on data through September, are actually much higher because the West Seattle Junction Business Improvement Association got an unprecedented single permit allowing all 230 shops and restaurants in the district to set up a single table and chair outside their storefronts).

Seattle’s neighborhood businesses are using all these permit options (they’re free) to turn neighborhoods outside the downtown core into people-centric hot spots. Just grab a table in the middle of the street on 9th Avenue N. between Thomas and John Streets in South Lake Union, and you’ll quickly get a sense of the new block-party atmosphere that’s helped redefine the city in recent months.

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Neighborhoods aren’t merely dedicating more public space for eating and drinking. The elevated energy is also being formalized on neighborhood side streets. As part of another SDOT program called “Stay Healthy Streets,” 13 stretches of neighborhood streets, totaling more than 20 miles, have sidelined cars in favor of people. Instead of reading “Street Closed,” SDOT signs barring cars could just as logically read “Street Open.”

The takeaway for city policy makers should be clear. While inveterate single-family-zoning advocates continue to decry urbanization in any form (in order to preserve neighborhood character, they say), Seattle’s neighborhoods are not as fragile as the naysayers have claimed. On the contrary, the uptick in neighborhood action seems to have amplified, rather than destroyed, neighborhood character.

Hilariously, one business that has chosen to convert sacred parking space into café seating, Café Javasti, was an adamant parking space patriot during Wedgwood’s retrograde fight against a protected bike lane on 35th Ave. NE.

“I don’t understand why we’d ever go back.” — West Seattle Junction BIA Executive Director Lora Swift

From “outdoor cafés to outdoor retail racks,” West Seattle Junction BIA Executive Director Lora Swift said, the neighborhood has a “new cadence” and a “more European feel.”

She says she’ll be advocating to keep the permits in play through “at least 2021,” adding that she’d like the programs to stay in place longer than that. “I don’t understand why we’d ever go back,” she said, noting that her enthusiasm is “underscored by requests from the community… to continue to this new Seattle. We’ve gotten so many emails.” Continue reading “Maybe Metropolis: The Pandemic Has Forced Seattle To Reconsider Its Neo-Suburban Model” →

Business, Economy, Featured

Lawyers, Car Dealerships, Burger Joints, Newspapers, and Strip Clubs: Which Seattle Companies Got Federal Loans

COVID-19 Relief Series, Part 2: Paycheck Protection Program ...

 

The Small Business Administration has published a list of the companies that received Paycheck Protection Act loans of more than $150,000, including thousands of Seattle-based for-profit companies, nonprofits, and religious institutions. (The low-interest loans convert into grants if they are used primarily to retain staff who might otherwise be laid off). The local list, which I’ve compiled into a Google spreadsheet, includes a wide range of companies, from large law firms to newspapers to Catholic schools to nonprofits.

The Small Business Administration, which administered the loans, lists loans as ranges, so I have described each loan as being “up to” the higher end of the range. You can download the full spreadsheets of loans over and under $150,000 on the SBA website; note that the list of loans under $150,000 does not contain business names or detailed business categories.

I took a look at the list of Seattle companies and put together a highly unscientific, non-comprehensive guide to highlights, lowlights, and oddities.

• As the New York Times and others have pointed out, large law firms, lobbyists, and car dealerships were among the biggest “small-business” loan recipients nationwide, and Seattle was no exception. Law firms receiving big payouts in Seattle include Foster Garvey (formerly Foster Pepper), which received as much as $10 million; Schroeter, Goldmark, & Bender (up to $2 million) and Stokes Lawrence (up to $2 million). Local mega-consulting form Strategies 360 received up to $5 million. And Bill Pierre Ford (up to $2 million), Carter Motors, and Freeway Motors (up to $5 million each) were just three of the 20 Seattle car dealerships that received federal loans, a number that does not include the much higher number of dealerships just outside city limits.

The owners of the McDonald’s at Third and Pine, a corner that has seen many shootings over the years (most recently in February, when a mass shooting killed one and injured seven), also received a loan of up to $5 million.

• Several local media companies received PPP loans, including the Seattle Times (which reported earlier this month that it had received nearly $10 million), the Stranger (which has not disclosed its loan of up to $2 million, and continues to solicit small donations from readers, saying they’ve lost more than 90 percent of their revenue), the Daily Journal of Commerce (which received up to $1 million) and Sagacity Media, which owns Seattle Met Magazine and received up to $2 million. Cascade Public Media, the umbrella nonprofit for KTCS 9 and Crosscut, also received up to $2 million.

• For reasons that are unclear, Red Mill Burgers, which is owned by two white siblings, listed itself as a Black-owned business, according to the SBA. (The racial designation is optional, and does not confer any particular advantage.) Red Mill was in the news several years ago after owner John Shepherd got in trouble for making sexist and transphobic comments and sharing transphobic cartoons. Specifically, he “stepped down” from his “role” at the company—without actually relinquishing control—after calling female city council members “bitches” for voting against a sports arena and posting transphobic memes on Facebook. Shepherd remains an active commenter on the anti-homeless Safe Seattle Facebook page. Red Mill received between $100,000 and $350,000.

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Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job. Every supporter who maintains or increases their contribution during this difficult time helps to ensure that I can keep covering the issues that matter to you, with empathy, relentlessness, and depth.

If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for reading, and supporting, The C Is for Crank.

• Restaurants, which (along with hotels) were hard-hit by stay-at-home orders, ranked high among recipients of large and mid-range loans. Some notable beneficiaries include Duke’s Chowder House (up to $5 million); the Daily Dozen Doughnuts stand in Pike Place Market (up to $5 million); Matador, with branches in West Seattle and Ballard (up to $5 million); Salty’s, a seafood restaurant on Alki Beach (up to $5 million); two franchise branches of Din Tai Fung, the Taiwanese restaurant chain (up to $2 million); Renee Erickson, who owns nearly a dozen local sea creature-themed restaurants (up to $5 million); and the ultra-spendy Queen Anne destination restaurant Canlis (up to $2 million); and Dick’s Drive-Ins (up to $5 million).

Various business entities associated with restaurateur Tom Douglas, who shuttered all of his restaurants and laid off hundreds of employees in early March, will collectively receive loans of up to $4.35 million. The restaurants include some that are still open, such as the Palace Kitchen, Dahlia Lounge, and Serious Pie, as well as two that Douglas has closed permanently, Brave Horse Tavern and Cuoco. According to the SBA database, Douglas’ claimed that the federal loan of up to $1 million would allow Terry Avenue Restaurants, the corporate name for the two shuttered restaurants, to retain 92 jobs.

The owners of the McDonald’s at Third and Pine, a corner that has seen many shootings over the years (most recently in February, when a mass shooting killed one and injured seven), also received a loan of up to $5 million.

Rounding out the list of local burger chains, Kidd Valley and Burgermaster each received loans of up to $1 million.

Five corporations associated with Deja Vu strip clubs, not all of them incorporated in Washington State, showed up on the list and received a total of up to$5,350,000.

Some of the restaurateurs who will benefit from federal largesse have been in the news previously for stiffing workers or expressing anti-tax or anti-government views. Douglas, who just announced he will permanently close two of his restaurants near the Amazon campus, was among the most vocal restaurant-industry opponents of the “head tax” last year, and had to pay out a $2.4 million settlement for underpaying his employees last year. Dick’s Drive-Ins also came out against the tax, and its executive vice president, speaking on behalf of the company, suggested that charitable giving by individuals should replace government support for homeless services.

• A large number religious institutions (which are not taxed) received significant loans, among them the Corporation of the Catholic Archbishop of Seattle (up to $5 million), the Diocese of Olympia (up to $1 million), St. Anne’s Church on Queen Anne (up to $1 million), and about three dozen other churches or religious organizations. Private schools, many of them run by religious denominations, also received dozens of loans; Holy Names Academy (up to $2 million), St. Joseph School (up to  $2 million), and O’Dea High School, for example, received loans, as did private schools like Morningside Academy (up to $350,000) and charter schools like Summit Public Schools and Villa Academy (up to $2 million each).

The libertarian, anti-government Washington Policy Center—which rails against expansion of government programs to help vulnerable people and advocates for “free-market solutions” over government “handouts”—accepted a federal handout of up to $1 million.

• Local nonprofits that help people experiencing homelessness and food or housing insecurity also received loans to continue doing their work at a time when direct assistance has been especially critical. On the long list are Food Lifeline (up to $2 million), Solid Ground (up to $5 million), the Chief Seattle Club (up to $350,000), the Lighthouse for the Blind (up to $10 million), Asian Counseling and Referral Service (up to $5 million) and El Centro de la Raza (up to $2 million).

• Five corporations associated with Deja Vu strip clubs, not all of them incorporated in Washington State, showed up on the list and received a total of up to $5,350,000. According to the SBA, the five Seattle-based entities employ nearly 400 people.

One, Bijou-Century LLC, is registered in Nevada and owns a strip club in San Francisco that has been the source of several high-profile legal disputes, including a lawsuit against the software company Oracle over an unpaid five-figure tab. Another, S A W Entertainment Ltd., is associated with the Hustler and Condor strip clubs (both Deja Vu-affiliated) in San Francisco. The listed location for both entities is at 1510 1st Ave., the location of Fantasy Unlimited/Deja Vu Showgirls, but neither company is registered in Washington. And two more Deja Vu affiliates—BT California, which runs the Penthouse Club in San Francisco, and Deja Vu San Francisco LLC—are both listed at an address on Eastlake Ave. E. that is not the site of any strip club.

Only Seattle Amusement Co., also located at 1510 First Ave., is an actual Washington State corporation—it’s owned, along with the rest of the building that houses the Showbox nightclub, by local strip club magnate Roger Forbes, who started the Deja Vu company with Larry Flynt in 1985. The byzantine accounting (and the sleuthing required to find out where all these “Seattle” LLCs are registered) speaks to the difficulty of tracking where all the loans are going, even with the benefit of spreadsheets and the Internet. For what it’s worth,

Finally, the libertarian, anti-government Washington Policy Center—which rails against expansion of government programs to help vulnerable people and advocates for “free-market solutions” over government “handouts”—accepted a federal handout of up to $1 million.

Business, Cops, Development, Featured, gentrification, Mayor Durkan, Police, race

City Promises Handover of Central District Fire Station for Innovation Center, But Many Questions Remain
Seaspot Media CEO and 37th District state house candidate Chukundi Salisbury.

This piece originally appeared at the South Seattle Emerald.

Last Friday, the city’s Department of Neighborhoods made an announcement on its blog that came as a surprise even to its beneficiaries: After years of inaction, the city would finally transfer control of the decommissioned Fire Station 6 in the Central District to the Africatown Community Land Trust for redevelopment into the William Grose Center for Enterprise and Cultural Innovation, a long-planned incubator for Black-owned businesses. The development could include meeting rooms, technology labs, and maker spaces, along with up to 20 units of housing for young adults. 

“There’s very few spaces that we walk into as African-Americans where we know we’re loved,” said Seaspot Media CEO Chukundi Salisbury, a Democratic candidate for 37th District state representative and advocate for the Grose Center project. “Walking into the Liberty Bank building,” an affordable-housing development built through a partnership between Africatown and Capitol Hill Housing, “I feel loved, and I feel welcome, and that in itself is an achievement—just to walk in and not feel out of place, to feel that this place is for me.”

Eventually, the Grose Center could be one of those places. For now, though, the groups who have spent five years pushing the city to hand over the disused property are still waiting for the keys.

“We were surprised by the announcement,” Africatown executive director K. Wyking Garrett said during a press conference outside the fire station Monday. “We found out via social media, like many others, but we’re encouraged and think it’s a step in the right direction toward the overall goals of the King County Equity Now Coalition.” The fire station was one of several properties identified as future sites for Black-run enterprises by the King County Equity Now Coalition, which includes Africatown, the Black Community Impact Alliance, Black Dot, and other community groups.

The city’s announcement came after weeks of negative headlines for Mayor Jenny Durkan and Police Chief Carmen Best, who have been criticized for using force against mostly peaceful protesters on Capitol Hill, and one week after thousands of people rallied in front of the fire station in support of King County Equity Now’s demands. The department and mayor have resisted calls to make larger, more systemic changes demanded by protesters, chief among them defunding the police, redirecting funds to Black-led, community-based organizations, and releasing people arrested during demonstrations against police violence.

Support The C Is for Crank
During this unprecedented time of crisis, your support for truly independent journalism is more critical than ever before.

The C Is for Crank is a one-person operation supported entirely by contributions from readers like you. Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job. Every supporter who maintains or increases their contribution during this difficult time helps to ensure that I can keep covering the issues that matter to you, with empathy, relentlessness, and depth.

If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for reading, and supporting, The C Is for Crank.

Organizers of Monday’s press conference said they wished they could bring reporters inside the vacant building to see the space, but they currently have no way to get inside. Nor has the city proposed a funding plan for upgrades to the building or begun to work on the zoning changes that will be necessary to convert the property into a community center with on-site housing

Asked what the concrete steps the city has taken, other than last week’s announcement, a spokeswoman for the mayor’s office said, “Over the past two weeks, Mayor Durkan and City leaders have met with dozens of black community leaders representing a broad range of interests, including transferring city, county and state properties to community based organizations. Mayor Durkan supports these efforts. After meeting with groups last week, [deputy mayor Shefali] Ranganathan committed to working with community stakeholders… to move forward on next steps and the process for the transfer of FS6. The City looks forward to creating another strong community partnership to carry this project forward.” 

Africatown board member Isaac Joy noted Monday that Durkan is “getting a lot of pressure right now to address racial inequity in Seattle. … I don’t want to give her too much praise, because it shouldn’t take much organizing, it shouldn’t take thousands of Black people being in the streets, endangering themselves in the middle of the pandemic, to get the mayor to transfer over property that has been sitting vacant,” Joy said.

Funding for the redevelopment would come, in part, from the city’s Equitable Development Initiative, which was created five years ago to support community-led development in areas with high risk of economic displacement, like Rainier Beach and the Central District. The Grose Center was one of the first five projects identified in that process, but like others, including the Rainier Valley Food Innovation District, has not moved much beyond the planning stages.  

The Grose Center is named after William Grose, a Black businessman who purchased 12 acres of land from Henry Yesler in 1882 that eventually became the heart of the Central District. Garrett said Monday that the building would be not part of a “historic district,” but would serve as a “living memorial that will pay honor to the past” while creating opportunities for the Black entrepreneurs and innovators of the future. “We anticipate this being on an accelerated timeline, and we will continue to press for that, to ensure that we get the key, we get the title, and that we move forward on this project,” Garrett said.

Business, City Council, City Hall, Featured, homelessness, Media, Morning Crank, Transit, Transportation

Sound Transit CEO Takes Election Vacation, Amazon’s Revisionist History, Stranger May Lease from ICE Landlord, and More

1. Tuesday night’s election was a major blow to cities like Seattle and transit agencies like King County Metro and Sound Transit, which will have to drastically cut back on long-planned capital projects and eliminate bus service if the statewide Initiative 976, which eliminated funding for transportation projects across the state, hold up in court.

The Puget Sound’s regional transit agency, Sound Transit, stands to lose up to $20 billion in future funding for light rail and other projects through 2041, forcing the agency to dramatically scale back its plans to extend light rail to West Seattle, Ballard, Tacoma and Everett.

So where was Sound Transit’s director, Peter Rogoff, as the election results rolled in?

On vacation in Provence, then at a conference on global health in Rwanda, which his wife, Washington Global Health Alliance CEO Dena Morris, is attending.

Rogoff posted on social media about his trip, which began while votes were being cast in late October and is still ongoing (Rogoff will return to work on Monday).

Screen shots from Rogoff’s Facebook page. On the right: The Sound Transit CEO displays Washington Nationals regalia in Provence.

 

Geoff Patrick, a spokesman for Sound Transit, said Rogoff took the trip to France because “he has not vacationed for a while,” and said the agency was in the “very capable” hands of deputy CEO Kimberly Farley. As for the women in health conference in Rwanda, Patrick said, “this is a conference that he wanted to attend with his wife and it’s an important conference,” adding that Rogoff was “attending the conference with every confidence that the agency is being well run” in his absence.

Asked what Farley, the deputy CEO, has done to reassure Sound Transit employees about the future of the agency in light of an election that could gut its funding, eliminating many jobs, Patrick said Farley emailed everyone on staff and told them to keep focusing on their work. “There’s no impact whatsoever [from Rogoff’s absence] to the agency’s operations,” Patrick said.

Rob Gannon, the general manager of King County Metro, reportedly visited all of Metro’s work sites in person to answer employee questions; I have a call out to Metro to confirm this.

Support The C Is for Crank
The C Is for Crank is supported entirely by generous contributions from readers like you. If you enjoy the breaking news, commentary, and deep dives on issues that matter to you, please support this work by donating a few bucks a month to keep this reader-supported, ad-free site going. Your $5, $10, and $20 monthly donations allow me to do this work as my full-time job, so please become a sustaining supporter now. If you don’t wish to become a monthly contributor, you can always make a one-time donation via PayPal, Venmo (Erica-Barnett-7) or by mailing your contribution to P.O. Box 14328, Seattle, WA 98104. Thank you for keeping The C Is for Crank going and growing. I’m truly grateful for your support.

2. Amazon, the company that either did or did not buy Tuesday night’s election (or tried, only to have it backfire), has a sponsored article in the Seattle Times extolling the “revitalization” of South Lake Union. It began as follows:

In the late 19th century, Washington state was still largely untapped wilderness and the area surrounding Lake Union was modest and sparsely populated. Immigrants from Scandinavia, Greece and Russia, as well as East Coast Americans, traveled west to live in humble workers cottages as they sought their fortunes in coal, the new railway system, and a mill.

Amazon’s characterization of Washington as “largely untapped wilderness” waiting to be civilized by immigrants from Europe is jarring in 2019, when tribal-land acknowledgements are customary at public meetings and when most people living in Seattle are at least dimly aware that the West wasn’t actually vacant when “settlers” moved in.

I have reached out to Amazon and the Seattle Times and will update this post if I get more information about who wrote the sponsored piece.

For those who want to learn more about the past and present of the tribes that existed in what is now Washington state when Europeans arrived in the mid-19th century and are still here, here are a couple of helpful articles. One is from HistoryLink. The other is from the Seattle Times.

3. Council member Mike O’Brien, who raised his hand to co-sponsor council president Bruce Harrell’s proposal to fund an app-based homeless donation system created by a for-profit company called Samaritan, now says he’s “almost certain that [a $75,000 add to fund the company] will not be in the final budget.”

Amazon’s characterization of Washington as “largely untapped wilderness” waiting to be civilized by immigrants from Europe is jarring in 2019, when tribal-land acknowledgements are customary at public meetings and when most people living in Seattle are at least dimly aware that the West wasn’t actually vacant when “settlers” moved in.

The app equips people experiencing homelessness with Bluetooth-equipped “beacons” that send out a signal notifying people with the app where the person is. An app user can then read the person’s story—along with details of their mandatory visits with caseworkers, which may include medical and other personal information—and decide whether to “invest in” the person by adding funds to an account that can be used at a list of approved businesses. People can get “needed nutrition and goods” (tech-speak for groceries, apparently) at Grocery Outlet, for example, or “coffee and treats”  at the Chocolati Cafe in the downtown library. Continue reading “Sound Transit CEO Takes Election Vacation, Amazon’s Revisionist History, Stranger May Lease from ICE Landlord, and More” →

Bikes, Business, campaign finance, City Council, Density, Elections, Featured, homelessness, housing, King County, Transportation

The 2019 City Council Candidates: District 6 Candidate Heidi Wills
Image via Heidi Wills campaign

This year’s council races include an unusually high number of open seats, an unprecedented amount of outside spending, and eight first-time candidates. To help voters keep track, I’m sitting down with this year’s city council contenders to talk about their records, their priorities, and what they hope to accomplish on the council.

Today: District 6 candidate Heidi Wills. Wills, a former city council member, lost her reelection bid in 2003 and spent the next 13 years as the executive director of The First Tee of Greater Seattle, an organization that teaches kids “to play golf along with life lessons and leadership skills.” We jumped right in on the issue that led to her 2003 loss to David Della.

ECB: Let’s talk about Strippergate [the scandal in which Wills was reprimanded and fined for failing to report a meeting related to a zoning request from strip-club owner Frank Colacurcio, who contributed thousands of dollars in illegally bundled donations to Wills and two other council members.] What have you learned from that experience, and how has it changed your approach to campaign financing as a candidate?

HW: I think the democracy vouchers has that really lessened the influence of donors and special interests in fundraising and in fueling campaigns and it’s really given voice to average people who otherwise aren’t getting involved. Everyone has $100 to spend. When I ran 20 years ago and I felt like to get my name out there, and it was a citywide race, I needed to fundraise. And remember, this was pre-Google. [Editor’s note: Google was founded in 1998 and was pretty big by 2003. Yahoo had slightly more users, and MSN had slightly fewer.] I didn’t have Google as my friend. It was $650 per person maximum.

Remember, I was trying to solve a small business issue for Governor [Al] Rosellini [who was also involved… you know what? Just read this summary], who had been a mentor to me, and I did not question his motives or sincerity or his agenda. And in retrospect, I would have asked more questions. I would have wanted to know his relationship to the Colacurcio family. I didn’t ask that question. I didn’t know the history of the Colacurcio family. 

I was the youngest person who’d ever been elected to the city council and I did not know the headlines about all their corruption and criminal activity. It raised red flags at the [Public Disclosure Commission] when those checks came in, but I wasn’t aware.

“In retrospect, I would have asked more questions. I would have wanted to know his relationship to the Colacurcio family. I didn’t ask that question. I didn’t know the history of the Colacurcio family.”

ECB: You and Judy Nicastro were booted from the council and Jim Compton, who took just as much money from the Colacurcios as you did, was reelected. Did you think there was any sexism involved in that?

HW: Yes. But I don’t want to get into it.

ECB: Density is a major point of contention in District 6, particularly in Ballard, which has changed so dramatically. What do you think of the changes that have happened around 15th and Market, where the new density has been most dramatic?

HW: I’m a supporter of density. I supported it when I was on the council, and I support it now, especially where we have transportation to support it. What’s concerning to people [about the six-story buildings at 15th and Market], and it’s a reasonable concern, is that it’s not human in scale. If we had courtyards. If we had setbacks, if it felt human in scope, not like a canyon, I think that people would welcome more density. So I think that’s really too bad that that was built in a way to maximize footprint.

The thing about [Mandatory Housing Affordability, which upzoned the city’s urban villages], which I think is a great way to include more density in  urban villages, is that it feels as though it was one-size-fits-all. And there are parts of our community that would welcome more density. In talking with folks from Lake City, they want more density. I feel like neighborhood planning, which was disbanded, is the way to go. 

I talked to [former Department of Neighborhoods director] Jim Diers recently and asked him, you know, what about this? And of course he agrees we need more housing in our community. He said that we can bring people with us, and I think that’s true. There’s been a lot of hostility within District 6 about the city’s engagement with community, that it’s been lacking, that community voices are not being heard or welcomed in these conversations. And I think that that’s led to a lot of unrest that we’re feeling now, probably leading to more incumbents not wanting to run for to reelection. I think if the city actually empowered community that would look a lot different.

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ECB: When you say ‘community,’ what do you mean? Sometimes people use the word ‘community’ when they really mean ‘homeowners.’

HW: I bring that up. People talk about owner-occupancy requirements [for accessory dwelling units] and I ask what their objections are. They say they’re concerned about developer speculation and they’re concerned about homeowners not being on site, as if that leads to the degradation of a neighborhood. And I take issue with that, because I moved 13 times before I graduated from high school. I went to 10 different schools. Housing instability was hard on my childhood, and I know how disruptive that is. It’s hard on families, it’s hard on children. If we do care about community, we need to ensure that people have housing security.

ECB: If you’re getting that kind of reaction to the idea of backyard cottages in District 6, what are you hearing about  homelessness?

HW: I feel like people want solutions. District 6 is very progressive and people care about ensuring that people have the services that they need. I think they recognize that we need permanent supportive housing, and that a housing-first approach is the only means by which we’re going to gain traction on that issue. At the same time, they’re frustrated by the city’s lack of communication and innovation around how to address homelessness. I think the integration [of the homelessness system], has broad support in District 6. Continue reading “The 2019 City Council Candidates: District 6 Candidate Heidi Wills” →

Business, campaign finance, City Council, Elections, endorsements, Politics

Chamber of Commerce PAC Endorses Just One Incumbent in Council Races

The Civic Alliance for a Sound Economy—the political branch of the Seattle Metropolitan Chamber of Commerce—announced its endorsements this morning, in a preview of which candidates will  benefit from  the $800,000 Chamber president Marilyn Strickland says the PAC has amassed so far.

Here are CASE’s endorsements:

Seattle City Council Position 1: Phil Tavel
Seattle City Council Position 2: Mark Solomon
Seattle City Council Position 3: Egan Orion
Seattle City Council Position 4: Alex Pedersen
Seattle City Council Position 5: Debora Juarez
Seattle City Council Position 6: Jay Fathi and Heidi Wills
Seattle City Council Position 7: Michael George and Jim Pugel

Chamber president and CEO Marilyn Strickland and chief of staff Markham McIntyre announced the PAC’s endorsements at the Chamber’s downtown Seattle headquarters this morning. (Update: You can read the questions CASE asked the 19 candidates they interviewed here.) Both emphasized repeatedly that the group’s endorsements weren’t about “ideological purity,” (or, as Strickland also put it, “echo chamber politics”) but rather, about which candidates are “willing to sit down and listen to the concerns of business” and “who understand the basic functions of local government and are willing to sit down and have a constructive dialogue because that’s how things get done,” Strickland said.

Both Strickland and McIntyre repeatedly came back to the scuttled “head tax,” which would have fallen hardest on its big-business members, including major CASE contributors like Amazon and Vulcan.  “On homelessness and housing, we’ve been talking to the council about ways that we want to engage with [them] at the table, and instead we got a progressive revenue task force that had a predetermined conclusion,” McIntyre said. “We were invited to sit at that table, [while] knowing full well that they had already decided what exactly they were going to do and just wanted us to rubber stamp it, and in our minds that’s not really a partnership.”

Strickland added that the Chamber believes the council ignored the recommendations of Barb Poppe, the Ohio consultant whose 2016 report on homelessness in Seattle became the basis of a set of recommendations called Pathways Home. Candidates got points with the Chamber for supporting the idea of a new joint city-county agency to oversee the region’s response to homelessness, and for taking seriously businesses’ “legitimate concerns” about public safety arising from “street disorder.”

“There is what I call the street population, and then there are people who are homeless and they’re not necessarily one and the same,” Strickland said. “There are people that are a part of the street population who do things that are antisocial, and there are people who are homeless. And sometimes I think we just say they are one and the same.” CASE was impressed, Strickland said, by candidates who understood the “difference between the two” groups.

While it’s true that people who commit street-level crimes such as shoplifting and low-level drug dealing aren’t always homeless, there is a strong correlation between drug- and alcohol-related crimes and homelessness, which is one reason the successful LEAD diversion program does outreach to people experiencing chronic homelessness and addiction.

CASE hasn’t distributed any money to candidates yet, and likely won’t do so until closer to the primary. Their main expenditures so far have been on polling.

 

Business, Mayor Durkan, Transit, Transportation

Streetcar Path Forward Included Nudge from Deputy Mayor, Married to Streetcar Consultant, to Meet with Advocates

Mayor Durkan’s decision to move forward also came after political advisors pointed out the popularity of the project among key constituents.

In announcing yesterday that she planned to re-start the process of building the stalled Center City Connector on First Avenue, Mayor Jenny Durkan was responding to a new report from the Parsons engineering firm showing that the project is feasible if the city can come up with an additional $88 million—the gap between the 2017 cost estimate for the streetcar and an updated estimate of $286 million.

But she was also responding to the political reality (reportedly communicated to her by her political advisors) that the streetcar enjoys strong support not just from the lefty urbanists and transit advocates who voted for her opponent Cary Moon in 2017 but from business leaders, developers, and other constituents who she needs to have on board if she wants to get reelected in 2021.

The mayor’s decision to meet with those advocates came shortly after a nudge from one of her deputies with a direct interest in the project’s outcome. Although Durkan was initially reluctant to meet with a group of business leaders and downtown stakeholders who supported the streetcar, she eventually did so—after an email, last June, from her deputy mayor David Moseley, urging her to take the meeting. Moseley  is married to the consultant Durkan hired to do an analysis of the streetcar in July. Previously, Moseley had urged top city officials to accelerate streetcar-related construction that began in 2017, noting that as a property owner along the streetcar route (he and his wife, Anne Fennessy, own a condo in Pioneer Square), he was among those directly impacted by the construction.

Last June, 100 downtown stakeholders, organized as the Seattle Streetcar Coalition, wrote a letter to Durkan urging her to move the streetcar forward, arguing that the 17-block project, which would connect the existing South Lake Union and First Hill streetcars, was “an essential component of our transportation infrastructure, and is currently the only high-capacity transit project planned for the center city before 2035.” At that point, streetcar work had been on hold for several months.

The streetcar advocates, frustrated by what they viewed as a lack of responsiveness from the mayor’s office, asked for a meeting with Durkan herself on June 19, in an email signed by six members of the “Streetcar Steering Committee,” representing the Alliance for Pioneer Square Alliance, Vulcan, and the Downtown Seattle Association, among others. (I obtained this and other emails referenced in this post through a public disclosure request).”We’ve been unsuccessful in obtaining a meeting with you to discuss the future of the Center City Connector Project,” the email said. “Many of the Streetcar coalition members would be willing to help the City revisit a host of cost saving solutions.”

A correspondence assistant from the mayor’s office reached out to the mayor’s staff and the three deputy mayors to ask how to respond. Eight days later, one person did—deputy mayor David Moseley, whose wife, consultant Anne Fennessy, was about to sign a $30,000 contract to “coordinat[e] and integrat[e] the City’s streetcar review.” (Fennessy’s first billing period for this contract began on July 27.) Moseley, who lives with Fennessy in a building located directly on the potential streetcar route, wrote, “Not my area but seems to me the Mayor should meet with proponents of the streetcar. I think it’s worth 30 minutes of her time. Just a thought.”

The email went to members of the mayor’s staff and the two other deputy mayors. A few weeks later, on July 24, the streetcar advocates got a meeting with deputy mayor Shefali Ranganathan. One month after that, on August 23, they sat down with the mayor directly—in a meeting that was staffed by the mayor’s then-transportation advisor Ahmed Darrat, and Fennessy.

Moseley, who lives with [his wife, city streetcar consultant] Fennessy in a building located directly on the potential streetcar route, wrote, “Not my area but seems to me the Mayor should meet with proponents of the streetcar. I think it’s worth 30 minutes of her time. Just a thought.” OnJuly 24, the streetcar advocates got a meeting with deputy mayor Shefali Ranganathan. One month after that, on August 23, they sat down with the mayor directly—in a meeting that was staffed by the mayor’s then-transportation advisor Ahmed Darrat, and Fennessy.

Moseley has an agreement with the city to recuse himself from “any current or reasonably foreseeable action that to a reasonable person appears to primarily benefit his wife or her firm” and to refrain “from participating in any decisions that pertain to specific matters in which Anne Fennessy or her firm have a financial interest until those matters are concluded; thereby terminating the financial interest.”

Did Moseley’s brief note change the mayor’s mind about meeting with streetcar advocates? Durkan’s chief of staff, Stephanie Formas, says no. “The note from the Deputy Mayor in June did not impact the decision for the Mayor to meet months later with the Streetcar Coalition in late August ahead of the initial release of the independent review of capital and operating costs of the project,” Formas said     Thursday. “Deputy Mayor Raganathan has been overseeing the review and been the lead on any meetings with transit advocates, community members, businesses, stakeholders and SDOT. She had recommended the Mayor meet with the coalition.”  Even if Moseley’s nudge (or subsequent verbal conversations) did influence the mayor’s decision to meet with the group, it was likely just one of many factors that helped turn the tide back in the streetcar’s favor, along with the new, less-terrible-than-anticipated cost estimates and the mayor’s desire not to alienate a key set of constituents who were urging her to move the streetcar forward.

Support

But in a sense, whether Moseley’s attempt to influence the mayor by urging her to meet with a group of cranky constituents ultimately did influence the mayor’s thinking on the streetcar issue is almost beside the point. The existence of such an email highlights, not for the first time, the tricky dance that becomes necessary when the mayor’s preferred consultant (and longtime friend) keeps getting contracts to work on city issues, including the streetcar and, more recently, coordination between the city and Sound Transit.

And this was hardly the first such email from Moseley. Back in January, before he signed his recusal agreement, the deputy mayor sent a note  to city staffers, including several at the mayor’s office, complaining about streetcar-related construction in Pioneer Square. “Just to bring some urgency to this issue, I live in Pioneer Square and the work is very impactful to the neighborhood,” Moseley wrote. “I know the work is necessary but I hope we are doing all we can to have the work completed as quickly as possible and with as little impact as feasible.”

It’s probable that neither of these emails cross any kind of formal ethical line. But they do raise questions about what “recusal” means, and whether Moseley should be weighing in with city staffers or the mayor about issues Fennessy works on at all. (Whether Moseley’s boss should be granting his wife six-figure, no-bid contracts is another question altogether.)

The ultimate fate of the streetcar remains a somewhat open question. The total funding gap identified in the report is $88 million—$23 million for utility work that would likely have to be done anyway, and a $65 million hole in SDOT’s budget for the project that resulted from factors the mayor’s office says the department failed to consider, including the need for a new maintenance barn to accommodate longer trains, funding to strengthen bridges in Pioneer Square, and modifications to the train platforms and tracks.

In her letter transmitting the new cost estimates to the city council, Durkan placed the blame for these cost increases squarely on former mayor Ed Murray’s administration and the previous management at SDOT, writing, “It is clear now that the previous SDOT management in the last administration had failed to do the proper due diligence to account for all the costs. As a result, this project was not set up for future long term financial success, including with the Federal Transit Administration (which does its own separate review of the project).” The city is counting on a $75 million Small Starts grant from the FTA to complete the project. The additional review, Durkan’s office says, will push the streetcar’s opening date out to 2025—five years later than the original 2020 projection.

Beyond that, SDOT faces an ongoing operating deficit—or, if you prefer, it requires an ongoing operating subsidy. During last year’s budget discussions, Durkan announced she was ending the practice of backfilling revenue shortfalls for the South Lake Union and First Hill streetcars after the fact, and would instead include the subsidy in the budget at the beginning of the year. According to the Parsons report, that ongoing subsidy will grow from $4.17 million next year to $6.14 million in 2020, when a $1 million annual subsidy from King County Metro runs out, and grow steadily until it jumps again, to $12.8 million, in 2024, when a similar $5 million annual subsidy from Sound Transit runs its course. The renewal of either of these two subsidies would reduce the cost to the city.

As for the Seattle Streetcar Coalition: They were, in the words of one coalition member, “thrilled” by today’s announcement. In a press release, the coalition “commend[ed] Mayor Jenny Durkan for her leadership on transportation and her commitment to delivering the critical next piece of Seattle’s streetcar system.”