Jury rules City of SeaTac must pay $10 million over property case; City will appeal


by Jack Mayne

A King County Superior Court jury has ruled that the City of SeaTac must pay nearly $10 million to developer Gerald S. Kingen for stalling and attempting to take over property near the Tukwila International Sound Transit station.

In a cross claim, the city would get a quarter million dollars.

“We are anticipating an appeal”, said Mary Mirante Bartolo, SeaTac’s city attorney. “Many of the claims asserted by K&S involve alleged actions taken by the city as far back as 2005. The city prevailed on five of the eight claims that were under consideration by the jury.”

The jury award came on Monday (Jan. 25) after the several weeks-long jury trial in Kent. The actual amount awarded to Kingen’s K&S Developments is $9,589.703 and K&S must pay the city $257,233 in a counter claim.

Claimed improper actions
The City of SeaTac was sued for using illegal and improper processes to wrest control of property in the South 154th Street Sound Transit station area that was acquired by the city from several lenders and through foreclosure from K&S in 2009. near the airport Sound Transit terminal.

The suit was filed in 2012 by K&S Developments, headquartered on Harbor Avenue in West Seattle, and controlled by Kingen. Kingen also who owns Salty’s on Redondo Beach Alki and Salty’s in West Seattle.

The lawsuit said K&S borrowed money to buy property at 15247 International Boulevard in SeaTac for retail stores and a park and fly operation, but claims that SeaTac city officials stalled the K&S request for permits to develop the site, across International Boulevard from the Tukwila International Boulevard Station, eventually using “improper actions” to take over as owner of the land and buildings.

K&S maintained 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 claimed, 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 said 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. K&S said it was finally forced by financial strains to sell its promissory notes. Colliers then transferred 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 had claimed. The city got the property on Dec. 31, 2009.


Comments

9 Responses to “Jury rules City of SeaTac must pay $10 million over property case; City will appeal”
  1. Mike Condon says:

    This has Patterson written all over it!!

    • Melissa says:

      Hopefully the whole “Patterson Clan” will go away now.

      • Hmmm says:

        pretty rude comment. I would ask you Melissa why you are so negative about everything?

        • Melissa says:

          Hmmmm—Why??? Seriously??? Because this city has turned into garbage. All of you and your group care about is the airport. You could care LESS about how it is affecting the residents..nor do you care!! This city looks like crap! You won’t let the police do their jobs. You won’t allow real crime data. You don’t want to clean the currents problems, parks, properties up. This is not rainbow-ville!!! Get over yourself!! Look around you. Are you really able to look your family in the eyes and know you’re doing whats best for the citizens?? Scary if you are. Take the clan and puppets and move on! We don’t need or want you and your “morals”.

  2. Seatac Sucks says:

    The new city council will be paying for the old guards dirty dealing for many years to come…

  3. Joel says:

    Any word on the individual defendants?

    • Jack Mayne says:

      The individuals named in the suit were dismissed from the case prior to the actual case being heard.

  4. mminnot says:

    According to a SeaTac press release I just read, dated January 4, 2010, the SeaTac Council voted unanimously to purchase that property in 2009.
    The minutes show that the “old guards” would have been Mayor Ralph Shape, Deputy Mayor Gene Fisher, Terry Anderson, Mia Gregarson, Joe Brennan, Chris Wythe and Tony Anderson.

    Craig Ward was the city manager back then, acting first under Mayor Gene Fisher and then under Mayor Ralph Shape.

    I read earlier that the defendants named in the suit were all city staff . They were dismissed.

    • Melissa says:

      Shouldn’t they be the ones held accountable for this? Our citizens are the ones that are going to suffer from yet another one of their horrible decisions.