Kingen’s new lawsuit against SeaTac put on hold pending state decision appeal

By Jack Mayne

The Federal District Court in Seattle has told restaurateur and would-be SeaTac gambling impresario Gerry Kingen that his recently filed federal lawsuit against the City will be put on hold until a state Court of Appeals decides to uphold or reject an earlier state Superior Court decision that awarded him millions of dollars.

The federal court case was filed by Kingen in June, naming just about every leading city official and city councilmember in office at the time.

Federal District Court Judge Thomas S. Zilly ordered the stay of proceedings last Friday (July 28).

Oral arguments on the city’s appeal of the state Superior Court decision will be scheduled later this year.

The federal case
Defendants in the June federal case by Kingen include Stephen Butler, the city planning director at the time in the early 2000’s. Also named in the federal case is Jeffrey Robinson, who was then and remains the SeaTac economic development manager.

Additional defendants in the now stayed federal case by Kingen are Craig Ward, city manager of SeaTac until 2010; former SeaTac City Councilmember Gene Fisher, who was defeated by former Councilmember Barry Ladenburg in 2011; Terry Anderson, former mayor and councilmember from when the city started in 1990 until she retired in 2016; current Deputy Mayor Pam Fernald, City Attorney Mary Bartolo and Assistant City Attorney Mark Johnsen.

The listed plaintiff is K&S Developments, which Kingen owns. The property at 15247 International Boulevard was purchased in 2003 using some money borrowed to develop the property.

Kingen again used the same law firm, Landerholm of Vancouver, Wash., that handled his winning case in King County Superior Court that is the case under appeal that the federal court deferred to in its stay of proceedings on July 28.

Wanted ‘park and fly’
Kingen, as he asserted in the state case, wanted to build a multi-story1,200-stall commercial parking garage for airport customers, which the suit asserts are “are in high demand and highly profitable.”

But the lawsuit says that then SeaTac that in 2005 “Planning Director Steve Butler, City
Manager Craig Ward, and other staff members decided they did not want K&S to be
permitted to build a park-and-fly garage at the SeaTac Center.”

They say the reason for their opposition was that such a facility would “drive up the price of real estate,” and hinder “more preferred” development and the lawsuit says the city was working on a development with Masterpark for a similar parking facility nearby.

City staff, the Kingen suit says, were concerned about how the K&S facility would affect the city plans, but no one from the city told them of the worries.

Behind the scenes, Planning Director Steve Butler and City Manager Craig Ward wanted the SeaTac City Council to an emergency moratorium to stop K&S’s park-and-fly.

The two city officials went so far as to devise “a secret plan” for the Council to pass the “emergency moratorium” without telling K&S.

When Kingen, learned of the moratorium and the city staff leaders plan, he met with several SeaTac Council members including then Mayor Gene Fisher who “were surprised to learn of K&S or its project and said they did not know how the moratorium had affected those plans. Mayor Fisher promised to ‘make things right,’” the lawsuit says.

Agreement reached
The Council then “directed City Manager Ward to work with K&S to allow the park-and-fly to proceed, despite the moratorium and the proposed change in land-use zoning.”

Kingen and the city staff “reached an agreement on the essential terms” by July 2006 and the SeaTac City Council told the staff to get an agreement on the 1,200-stall parking garage for the Council to formally approve.

K&S felt the agreement was in the bag,

But it wasn’t, says the Kingen suit, because “unbeknownst to K&S, (city) staff worked behind the scenes to undermine K&S’s ability to get Council approval” and staff and the city attorney “actually had no intentions of allowing a park-and-f|y at the 154th Station Area.”

The Kingen appeal said city staff concealed “its true plans and intentions” and the city attorney “used delay and deception to frustrate K&S’s plans.”

So, in October 2007, the matter was brought to the Council but “a majority of this same Council stated they would no longer support a park-and-fly at the SeaTac Center,” the federal lawsuit claims, and recommended K&S work with city staff “on a different proposal.”

No money to build
The recession of the time prevented Kingen’s from getting any financing for the project, the suit says, and K&S defaulted on its loans at the end of 2008.

When the city heard about Kingen’s loan default it hired a real estate broker that used deception to force K&S to sell the property to SeaTac for “millions of dollars less” than fair market value, or its potential value as a park-and-fly.

Kingen claims in the suit that the city was the “phantom buyer” but “never agreed to waive or release the City from any other claims.”

After discovering the SeaTac was the buyer, Kingen’s suit says that in 2010 it hired a lawyer to “investigate the circumstances” of the purchase but the city never gave K&S many relevant documents even though it took “over a year” to produce those that it did turn over. Still, “many of the most incriminating public records that were not produced.”

But Kingen “ultimately obtained (the documents) from other sources and not from the City.”

The suit says it wasn’t until it all the information needed that it was realized that city had a “potential claim” against SeaTac for its actions.

The public record request yielded the SeaTac staff’s “true feelings about K&S and the proposed park-and-fly” facility, the lawsuit says. A city consultant discovered that SeaTac city staff felt K&S was “not [a] capable or reliable developer” and the city should learn more about them before “they create a fundamental dysfunction” in the middle of a proposed transit station area.

This case will not go forward, the federal judge ordered, until the state case and the city’s appeal of the $18 million judgment to the Kingen’s is decided.

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