MENU

Reason.com

Free Minds & Free Markets

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.

EmeraldUmbrellaStudio/Dreamstime.comEmeraldUmbrellaStudio/Dreamstime.comEarlier this summer the Seattle City Council passed a since repealed $20 million tax on jobs (also known as an Amazon Tax), with plans to spend that money on affordable housing and homelessness services in the increasingly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.

Photo Credit: EmeraldUmbrellaStudio/Dreamstime.com

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fist of Etiquette||

    Despite legal warnings, it appears the city council was happy to be close behind and follow Ben Gibbard into the dark.

  • grips||

    Ah yes, the Owl City guy.

  • BestUsedCarSales||

    There are many rich people there. They should put there money together and buy the property to save the Showbox.

    Showbox is a pretty solid venue though. Saw some good bands there.

  • Nom de Sobriquet||

    Help me understand you. Are you suggesting the city's wealthy pool their money to bail the city out of their own potential $40M quagmire? Fuck that. What's the return on that investment? Feelz? Seattle screwed the pooch, here.

  • BestUsedCarSales||

    No, I'm saying if people want to stop this guy from building housing on the land he owns, they should buy it from him and fund the Showbox themselves, rather than attempting to get a government fist to fuck him for them.

  • Nom de Sobriquet||

    At $40M, "people" would never see the return on the investment. Plus, there would then be too many cooks in the kitchen - arriving at an agreement on how to operate the venue would be violent comedy. Getting "a government fist to fuck him for them" is the only tool in their toolbag. This isn't about the venue, it's about the city's refreshingly transparent corruption. Reap, sow. Forbes has a big check coming in the mail.

  • Fist of Etiquette||

    At $40M, "people" would never see the return on the investment.

    That's not for us to judge. Simply saving the cherished venue from destruction (and keeping from their midst an unsightly high-rise with its potentially undesirable tenants) could be all the return then want.

  • grips||

    Hi you seem like an idiot, so I'll clarify it for you.

    He's saying it is a vanity project and the people who are vain should pay with their own money.

    It's a commentary on using private resources instead of government.

    Your stupid fucking rant is completely unrelated and out of left field.

  • Nom de Sobriquet||

    @grips: No. It's completely fucking relevant. He said nothing about vanity - he said "to save the Showbox." If it was a vanity cause, the point should have been expounded on. Unlike you, I didn't attack him like an ass-tart. I asked him to clarify. Matter of fact, I thought I was having a useful discourse until you stuck your face in it. Take your histrionics over to MSNBC.

    @BestUsedCarSales: Good talk. Hope they don't tear the place down.

  • BestUsedCarSales||

    Yes, my point was only that the protesters would be on more solid ground to band together to save it by purchasing it and maintaining it. This is not unheard of. The old theater in my hometown is, in fact, under trust in this same manner. They do charity drives to maintain it when shows don't cover expenses. People put their money where their mouth is. And I agree, they are probably not that dedicated to the cause. But because of that I think their claims ring somewhat hollow.

    The dishonest thing is to run to the government to ban the landowner from doing what he wishes with his property.

    If they want donations to buy the Showbox, I'll throw my money where my mouth is on it too.

  • operagost||

    $40 million is the owner's estimate on the loss in value from the property being rezoned. It doesn't mean that's what the property would actually sell for. Maybe he would rather dump it for, say, $20 million, and take the quick cash rather than put lots of money at risk for the slow $40. It would also be good publicity to the left.

  • loveconstitution1789||

    Seattle will be another Detroit once Amazon leaves.

    All the other business traffic can shift to surrounding cities like Tacoma, Bremerton, and Everett.

  • perlchpr||

    Nah. Not just Amazon. I think it'll take both Amazon and Boeing.

    And even then, they'll still have Microsoft.

  • BestUsedCarSales||

    Amazon is the lynchpin for Seattle proper though. Them leaving would shift the city itself dramatically. Boeing and Microsoft are in Everett and Redmond respectively. And so the region would survive, but the tax money that Amazon provides directly to the city would largely evaporate and force some significant conversation on the city's part.

    Whether they ignore it or not is a different question.

  • perlchpr||

    An excellent point I hadn't considered.

  • loveconstitution1789||

    Microsoft is not in Seattle proper.

    It looks like Boeing has most of its buildings outside Seattle City limits. The airfield looks to be half in and half out.

  • BestUsedCarSales||

    Boeing is largely in Everett now.

  • perlchpr||

    Yeah. My original comment was more thinking about the idea of what it would take to economically cripple the entire area, not thinking about the tax divisions for the different proper cities.

  • Longtobefree||

    What kind of a damn fool still thinks that there are property rights in Seattle?

  • SQRLSY One||

    So now most of the money is going to go to lawyers instead of to housing development...

    Good job left coast lib-tards!!!!

  • Rat on a train||

    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.
    I hear donations to certain organizations will protect you from such outcomes.

  • perlchpr||

    The Assassin's Guild?

  • SQRLSY One||

    The Communist Party?

  • Rat on a train||

    It is Seattle.

  • Unicorn Abattoir||

    Yes, and I used to believe that there were organizations that would kill my snakes for me...

  • Red Tony||

    These euphemisms are making me thirsty!

  • loveconstitution1789||

    Cult of Scientology?

  • Scarecrow Repair & Chippering||

    It's not surprising that a city of socialists and progressives (but I repeat myself) would so blatantly send mixed signals on what they want.

    It should be surprising, but it's not, that their adoring public makes such sorry excuses to keep voting in these rascals and hypocrites.

    What does surprise me is that I keep on thinking each such story is peak surprise.

  • Unicorn Abattoir||

    Up next - Kshama the Kommie proposes a 200% tax on any lawsuit awards against Seattle, because fairness or something.

  • Hamster of Doom||

    I have an idea! We only hire city management if they're really excellent at resource management games instead of basing it on the ability to tell popular lies and sit through six years of college for a bachelor's.

  • Unicorn Abattoir||

    You'd rather have them basing decisions on their hours of playing SimCity?

  • Hamster of Doom||

    Yes.

  • Unicorn Abattoir||

    And when they get bored, they can just create a disaster.

  • Hamster of Doom||

    Yes, its remarkably true-to-life.

  • barfman2018||

    The Showbox is a dirty little room. The idea that it's something worth preserving is farcical.

    *barf*

  • sharmota4zeb||

    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.

    Just to be clear, the guy is a strip club magnate, and the city wants to force him to preserve his building that was designed for audiences to view shows in. I need to get his phone number, cause ... oh, you don't want the details.

  • Griffin3||

    Please, by the gawds, tell me that each of the council members is individually named in addition, and that he will use this as an excuse for mockery and humiliation. I mean, this is exactly the situation that tarring and feathering was invented for, right?

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online