The ink is barely dry on the 99-year lease Wright Runstad signed for the Pacific Medical Center Building on Beacon Hill–an agreement that turns the publicly owned facility sharply away from its mandated mission of providing accessible low-income medical care, and into a new mission of making oodles of money for a private developer. Now the development company has plans to build more office space on the site.
For those who haven’t been following the deal in ETS! and the local weekly papers: the Pacific Medical Center building–that red brick fortress atop the north end of Beacon Hill–is owned by the City of Seattle and was formerly operated as a public hospital to treat people with no health insurance or those who couldn’t afford private medical care. Federal and state government cuts in health care funding for the poor and the elderly throughout the 1980s made it impossible for the hospital to break even, and eventually it closed down. The building has been vacant–except for a community medical clinic in the basement–for years. But instead of turning it into an assisted care facility for the elderly, as one group proposed, the PacMed Public Development Authority opted turn it into commercial office space instead, hoping that the rental income could be used to fund health care.
But the PDA, influenced by Mayor Schell, turned around and leased the building to the Seattle development company Wright Runstad for 99 years for the dirt-cheap price of $8 per square foot. Wright Runstad says it will rent the building out to Amazon.com at market rates, which range from $12 to $40 per square foot, and make an enormous profit. It’s no coincidence that Wright Runstad beat out other health care-related groups for the lease on the building; Mayor Paul Schell’s housing advisor, Joel Horn, works for Wright Runstad.
Wright Runstad also leased the parking lots surrounding the building; on the north side, parking lots cover prime view property which overlooks downtown, the Olympics, and Puget Sound. Last week, the company announced that it would build three buildings, six stories high, with 240,000 square feet of office space where those north parking lots now sit. The original, towering, historic PacMed building only has about 180,000 square feet of space. A simple comparison shows that Wright Runstad obviously wanted the property to develop it into a “business park,” and not for any noble mission to offer health care money in trade for the PacMed building. The PDA sold out its public mission and, with Paul Schell’s blessing, gave Wright Runstad cheap access to prime view property at bargain basement rates–rates much, much lower than Wright Runstad would pay to purchase or lease land in downtown Seattle for a similar development.
Wright Runstad claims that Amazon.com, the proposed new tenants of the PacMed building, will eventually expand to fill the three new buildings. Yet it’s not at all clear that Amazon.com has even signed a lease for the existing PacMed building, much less the proposed new buildings. In fact, Amazon.com has never turned a profit, in spite of their recent expansion fueled by the company’s inflated stock price. Yet even if they don’t move in, Wright Runstad won’t have any problem finding occupants for the space, since downtown office vacancy rates are at an all-time low of 2-3% (and office rents can go nowhere but up).
This is the typical route for public/private partnerships: the public provides the bulk of the money or assets, and the private business reaps the profits. Presumably Wright Runstad will build its new buildings on public land, collect 100% of the rent, and stick the city with the bill for more neighborhood parking, traffic abatement, widening streets and sidewalks, upgrading sewer and electrical lines, adding traffic signals, and all the other expenses related to dealing with a new office park in the midst of a residential area. Meanwhile, the residents of Beacon Hill can look forward to months or years of construction and, once the “campus” is complete, lots of traffic jams, higher property taxes, less parking, less privacy, more noise, and more commercial development.
The loss of this public land, which should have been used to benefit the neighborhood and the city in general, is a scandal. While companies can sue the government for illegal “takings” when it passes laws to regulate mining, clear-cutting, or the development of wetlands and sensitive ecosystems, the public has no recourse when a PDA or the city engages in an outright give-away–as we have seen with attempts to block the stadium give-aways and the Nordstrom/Pacific Place garage deal. Court cases and appeals to governmental and regulatory agencies have not worked and are not likely to bring an end to unfair public-to-private gifts; it’s time for the public to do something more vocal, more visible, and more pro-active. Whether that means forming watch-dog groups, demanding a moratorium on closed-door deals, or simply doing a little old-fashioned civil disobedience (or a little of all three), we have to do something. We simply have to draw the line somewhere.