Seattle's Amazon Tax Was Going to Raise $20 Million For Affordable Housing. Now the City is Getting Sued for $40 Million for Stopping a Housing Project.

The city's attempt to save the famed Showbox music venue has predictably resulted in a lawsuit.



Earlier this summer the Seattle City Council passed a since repealed $20 million tax on jobs (also known as an Amazon Tax), with plans to spend that money on affordable housing and homelessness services in the increasingly expensive, housing-starved city. If a new lawsuit filed against the city is successful, Seattle will have to pay out twice that amount for actively stopping the construction of a housing project.

Last week, local news website Crosscut reported that a lawsuit had been filed by strip club magnate Roger Forbes claiming the city had downzoned a property he owns to prevent its redevelopment into a 44-story, 442-unit apartment building.

Currently occupying Forbes' property is famed Seattle music venue the Showbox, which would have to be demolished to make room for the proposed apartment building. When word got out about the threat to the Showbox, a vocal crowd of supporters and local musicians demanded the city save the venue by any means necessary.

Their cause was quickly picked up by Seattle City Council, which slapped together emergency legislation to include the Showbox, and just the Showbox, in the nearby Pike Place Market Historical District, effectively scuttling any plans to build housing on the property.

Given that the Showbox had been deemed unworthy of historic protection numerous times by the city, and the site itself had just been upzoned to allow for major housing projects the year before, any number of commenters warned that preventing its redevelopment now would inevitably result in a lawsuit.

"The land owner would seem to have a legit gripe, or a claim in court, that he's been yanked around by a city that can't decide what it wants," wrote Danny Westneat in the Seattle Times.

Forbes' attorneys sent a letter to the city attorney warning he would sue should he be prevented from selling the land with an eye to redeveloping it. And even the city attorney has warned that any redesignating of the Showbox outside normal legislative channels and in response to the "popularity" of the Showbox could be deemed "arbitrary and capricious" in court.

Undeterred, the city went ahead with its spot rezoning on August 13. To the surprise of no one, Forbes sued on August 18, calling the city's actions "the definition of arbitrary and capricious" and demanding $40 million in damages, which he claimed was the fair market value of his land prior to its historical redesignation.

Forbes' lawsuit notes that the city had passed on multiple opportunities to declare the Showbox site historic. In 2007, a city consultant gave the Showbox the lowest possible score when evaluating it for landmark status, according to the complaint. When Seattle created a "Historic Theater District" in 2011 to preserve notable performance venues, the Showbox was conspicuously not included in this district.

The lawsuit also notes that the Pike Place Market Historic District has in place a number of restrictions that make the Showbox an awkward fit, including rules against having backlight signs, square footage limitations that make the venue too large, and even regulations that "generally prohibit amplified public music."

Forbes' suit also calls out the bias of city councilmembers, which he said denied him the appearance of a fair hearing in what his complaint contends was a quasi-judicial rezoning of a single site.

Indeed, many city council members did little to hide their bias against the redevelopment of the Showbox site.

According to emails obtained by local news blog The C is for Crank, communications staff for the city council wrote up talking points for Death Cab for Cutie singer Ben Gibbard's testimony in favor of saving the Showbox, while staff for councilmember Kshama Sawant shopped up designs for pro-Showbox protest placards. One such design (ultimately rejected) encouraged residents to "Call in sick—Come protest!" Sawant, the sponsor of legislation redesignating the Showbox, also helped organize protestors and was active on social media calling for an end to development at the site.

None of this will make it easier on Seattle officials to prove that they were not selectively trying to prevent a property owner from engaging in an otherwise totally legal redevelopment of his land.

The city council's actions in this case are gallingly reckless. In order to preserve a single music venue, the city is putting itself (and its taxpayers) on the hook for major damages should it lose the case. It also undermines the confidence of developers, who must now worry that their next project with the city may be scuttled after enough community protest or outrage.

That's a risk that Seattle, with its consistently rising housing costs and rising homelessness, can ill afford to take.