Collaboration in Civic Spheres

Seattle eyes transfer of troubled Indian services properties to non-profit

by Matt Rosenberg September 26th, 2011

SUMMARY: A public development authority formed by the City of Seattle in 1972 called the Seattle Indian Services Commission, which has been the subject of several critical city and state audits in recent years, now appears unable to continue to service the $6 million bond debt for its two adjacent properties on 12th Ave. S. in the International District, or to repair an estimated $2.5 million in water damages to one of the buildings, built in 1995. The commission’s primary tenant and sole source of debt service revenue is the non-profit Seattle Indian Health Board, and it says it intends to move out unless the Commission conveys title for the properties to the board, which has pledged to assume the debt and fix the water damage. The Commission has refused to approve this offer, so the city council has prepared an ordinance, to be discussed and possibly voted on in committee September 28, authorizing the City Attorney to seek permission in King County Superior Court to impose a trusteeship on the Indian Services Commission which would trigger a title transfer of the properties to the non-profit Indian Health Board. The resolution states this will allow for current services and programs to continue to be provided to Seattle’s Native American community. Sponsor of the resolution is City Council Member Nick Licata.

Pearl Warren Building, 606 12th Ave. S./King County Assessor

BACKGROUND: The City of Seattle formed the Seattle Indian Services Commission in 1972 to develop, coordinate and administer services for Native Americans residing in Seattle. It is one of the city’s eight public development authorities, or PDAs. The commission has a community computer lab, has offered computer skills training for youth, and has operated a store downtown selling Native crafts. The Commission offices have been housed in the Pearl Warren Building at 606 12th Avenue S., which it owns. According to King County property records it was built in 1995, and has 20,727 square feet of office space and 23,000 square feet of underground parking. The Commission also owns the Leschi Center building across the street at 611 12 Ave. S. It was built in 1988 and has 45,145 square feet. The primary tenant is Seattle Indian Health Board, which provides a wide range of health care services for Natives in clinics there.

However, management concerns have been an ongoing issue for the landlord, the commission. It was criticized by the City Auditor in a 2008 audit for failing to hold about one-third of its required meetings over a five year period, failing to produce transparent meeting minutes, not following state laws on competitive bidding for construction contracts it issued, approving other contracts and taking other actions that raised questions about conflict of interest, and failing to adequately establish capital reserve funds and operations and maintenance funds. Washington state auditor reports on the commission released in December 2004, March 2007 and June 2009 raised concerns about conflict of interest or failure to pay prevailing wage rates to contractor employees.

KEY LINK: Resolution 31321, authorizing Seattle City Attorney to seek court approval of trusteeship over Seattle Indian Services Commission, September 28, 2011. Housing, Human Services, Health and Culture Committee, Seattle City Council

KEY FINDINGS:

  • Outstanding debt on the City of Seattle Indian Services Commission’s two properties is $6 million, and since it was constructed in 1995 the Pearl Warren Building has suffered water damage that would cost an estimated $2.5 million to fix.
  • The only tenant of the building, and the primary tenant in the Leschi Center, is a private non-profit, The Seattle Indian Health Board. The board has repeatedly requested that its landlord, the commission, repair the building but that hasn’t occurred. As a result the board has given notice of intention to terminate its lease based on detailed breaches of terms, but hasn’t moved out yet.
  • The board’s rent income to the commission is the commission’s only source of income to pay the outstanding debt on the properties. if it leaves as a tenant, the city would be required o service the debt.
  • The city can’t assume financial responsibility for the building repairs or the debt on the properties. The non-profit Seattle Indian Health Board made an offer to the commission to assume the debt and repair costs in return for title to the properties – but the commission has refused.
  • The city aims to preserve the properties for their intended purpose of serving the Native American population of Seattle and believes this can best be accomplished by authorizing the city attorney through this resolution to seek approval in King County Superior Court for the commission to be put into a trusteeship. If approved this would trigger a transfer of ownership of the Pearl Warren Building and the Leschi Center to the Seattle Indian Health Board.

Iris Friday, one of eight Seattle Indian Services commissioners, said in an interview that the Commission’s Executive Director J. Michael Marshall left his position in June, and Assistant Director Carol Peloza had resigned. “The organization is not staffed now and it needs adequate staffing to address the damage to the building. The health board is in a strong position, they’ve got the capacity and ability” to manage the properties, Friday said. The health board’s executive director, Ralph Forquera, is also a program director for the U.S. Indian Health Service and an assistant professor in the University of Washington’s School of Public Health. Friday said the Indian Service Commission has remained deadlocked 3-3 on approving the transfer, with two members from the health board recused from the vote.

The last annual report of the Seattle Indian Services Commission on its Web site is for 2008 and includes a Fiscal 2009 budget showing $195,722 for the two administrative salaries and benefits, up from $189,605 in the preceding year.


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