SeaTac Sued for ‘Intentionally’ Interfering with an International Boulevard Project
by Jack Mayne
The City of SeaTac has been sued for using illegal and improper processes to wrest control of property near the airport Sound Transit terminal.
The suit was filed on Dec. 21, 2012 by K&S Developments, which is headquartered on Harbor Avenue in West Seattle, and controlled by Gerald S. Kingen. Kingen also owns Salty’s on Alki and Salty’s on Redondo Beach.
The lawsuit says K&S borrowed money to buy property at 15247 International Boulevard in SeaTac for retail stores and a park and fly operation. The suit claims that SeaTac city officials stalled the K&S request for permits to develop the site, across International Boulevard from the airport Sound Transit terminal, eventually using “improper actions” to take over as owner of the land and buildings.
K&S maintains it had been in conversations with the city for permits when the city, in February 2005, “adopted a moratorium on park and fly construction designed to intentionally frustrate, delay and interfere” with its plans.
The suit then says the city “adopted interim regulations also designed to intentionally frustrate, delay and interfere with K&S’s planned development.”
K&S maintains it did not know then that the city was engaged in “unlawful conduct” that SeaTac was fully aware that the delays and negotiating techniques were straining financially the developers. Then, four years latter, the city suggested to K&S that it would allow a mixed-use residential development on the property, but included terms in the development agreement that the city knew to be “unreasonable and unenforceable.”
SeaTac, the suit maintains, used its regulatory powers “to intentionally frustrate, delay and interfere with K&S’s planned development and interfered with K&S’s business relationships with third parties for unlawful purposes” so that it could protect the city’s “own business and proprietary interests” and that it schemed to acquire the property “at less than fair market value.”
The lawsuit says that was done when the city hired the Colliers real estate company “as an undisclosed principal” to buy the property, and that Colliers pressured those who had lent money to K&S to threaten to foreclose on the developer. K&S says it was finally forced by financial strains to sell its promissory notes. Colliers then sold the property to the city for the value of the loans.
“By purchasing the promissory notes, the city acquired the property for millions of dollars less than the fair market value,” the K&S suit claims. The city got the property on Dec. 31, 2009.
For all of this, K&S‘s law firm, Ashbaugh Beal of Seattle, is seeking unspecified damages from a court trial or, most likely, a negotiated settlement.
Besides the City of SeaTac the suit lists as defendants Stephen Butler, former planning director; Jeffrey Robinson, economic development director; Craig Ward, former city manager; Todd Cutts, city manager; and Colliers International, the commercial real estate company.