Petition of City of Seattle

• Decision Date: 24 December 1981
• Docket Number: No. 47556-3,47556-3
• Citation: 638 P.2d 549,96 Wn.2d 616
• Parties: In the Matter of the Petition of The CITY OF SEATTLE. In re The WESTLAKE PROJECT.
• Court: Washington Supreme Court

Page 616

96 Wn.2d 616

638 P.2d 549

In the Matter of the Petition of The CITY OF SEATTLE In re The WESTLAKE PROJECT.

No. 47556-3.

Supreme Court of Washington, En Banc.

Dec. 24, 1981.

Douglas N. Jewett, Seattle City Atty., Ellen D. Peterson, Asst. City Atty., Wickwire, Lewis, Goldmark & Schoor, O. Yale Lewis, Jr., William H. Block, Seattle, for appellant.

Bogle & Gates, Delbert D. Miller, Elaine L. Spencer, Lucas Powe, Ferguson & Burdell, Thomas J. Greenan, Seattle, for respondent.

Washington Coalition of Citizens With Disabilities, James R. Ellis, Catherine B. Roach, Sweet, Dussault, Neff & Gibbs, P.S., William L. E. Dussault, Seattle, for amicus curiae.

ROSELLINI, Justice.

This proceeding concerns a municipal improvement called the Westlake Project, proposed by the City of Seattle, a first-class city. The action was begun by the respondents, who are owners and lessees of properties located within the area which the project would embrace. They sought a judgment declaring invalid the ordinance adopting the project and providing for condemnation of property within the area (Seattle City Ord. 108591). Before the suit was heard, the City initiated condemnation proceedings to acquire plaintiffs' property, and the actions were consolidated.

After hearing extensive evidence, the trial court found inter alia, that the project was not authorized by statute, and did not constitute a public use. A number of the court's rulings are challenged on this appeal, but inasmuch as we affirm the trial court upon these two grounds, we do not reach the remaining issues.

The respondents ask the court to dismiss the appeal as moot. They point to the fact that during the pendency of this action, contracts which form an integral part of the project, particularly a contract with the Seattle Art Museum, have expired by their own terms. The court is assured, however, that the City intends to proceed with the undertaking if the court declares it valid. It is confident that it can renew the contract with the art museum and secure the other contracts needed to complete the project. That being the case, the matter is still in controversy and is not moot.

Pine Street in Seattle, between 4th and 5th Avenues, is fronted by retail stores which have been there for many years. The monorail, an elevated passenger service which runs to the Seattle Center, has its downtown terminal at that point. Westlake Avenue has been closed to traffic in recent years and converted to a mall, where public gatherings take place from time to time. There is on-street parking on Pine Street in this area; 60 percent of city buses travel to this point to disgorge shoppers, and the area is in the heart of the retail shopping center, three large department stores being situated in the immediate vicinity. The Mayflower Hotel stands at 4th and Olive, and just south of it is a large piano store. There is presently a walkway, called Fidelity Lane, which runs through the buildings in this block to make it easier for shoppers to walk from Frederick and Nelson on 5th Avenue to The Bon Marche on 4th Avenue.

The City proposes, in its Westlake Project, to acquire an area roughly between 4th and 5th on the east and west, and between Stewart and Pine on the north and south. The project would include the Times Square Building, considered an architecturally and historically significant building. A history of the development of the project follows:

The 1973 report of Mayor Wes Uhlman's committee which studied the Westlake Mall area stated that the retailing function of the area should be strengthened to forestall the decay experienced by the retail cores of other cities. The other objective cited was the creation of public space, aesthetically satisfying, which could provide a center for general pedestrian-oriented amenities both day and night. The committee concluded, however, that this objective should not be at the expense of the retail function. Westlake, the report said, offered a unique opportunity for locating this space in that it was centrally located in the middle of a high-density retail population and included a substantial public space at present.

It was proposed that the project should be designed and accomplished jointly with interested property owners and businessmen, because of the interdependence of the two goals.

Following his election, Mayor Royer, in 1978, appointed a citizens' committee to study the Westlake Project. The mayor proposed a project concept which substituted the Seattle Art Museum for hotel space which had been previously contemplated. Under the proposed plan, the museum, a private nonprofit corporation, will occupy the space rent free, as it presently occupies buildings owned and maintained by the City in Volunteer Park and the Seattle Center.

Pursuant to ordinance, the Department of Community Development advertised for developers to prepare plans for the project. The application of Mondev U.S.A., Inc. (Mondev) was accepted.

In August 1979, the Westlake Development Authority (formed pursuant to RCW 35.21.660 and governed by a council appointed by the mayor), the Seattle Art Museum, and Mondev entered into a tripartite agreement which established the parties' responsibilities for implementation of the project, specifying how the project was to be constructed, leased, operated and maintained.

After at least 13 public committee meetings and an evening public hearing at which the plaintiffs testified, the City adopted ordinances providing for the execution of a contract between the City and the Westlake Development Authority and providing that the City acquire, construct and equip through the Authority the revised project, with Mondev as the developer. In 1980 Westlake Associates, a limited partnership composed of Daon Corporation, Mondev and the Seattle Art Museum was substituted for Mondev as developer. An amended tripartite agreement was made between the Westlake Development Authority, the Seattle Art Museum and Westlake Associates.

Architectural plans for the project remain at the "preschematic" stage, but currently show the following project elements:

A. A triangular public park of approximately 25,000 square feet;

B. Additional exterior public open spaces, including covered arcades, sidewalks, plazas, rooftop garden and courtyard, and a rooftop terrace;

C. A public parking garage with short-term parking spaces;

D. A new monorail terminal of approximately 4,600 square feet accessible to the public;

E. An art museum in the new structure (approximately 130,000 gross square feet) and the adjoining Times Square Building devoted to galleries, children's museum, auditorium curatorial spaces, museum shop, library, and administrative and support functions;

F. Retail and cinema space (approximately 186,000 square feet of gross leasable space) occupying four floors of the new building; and

G. Interior circulation systems of approximately 45,000 square feet.

The ordinance declared that the construction of the proposed project was required for the health, safety, convenience and welfare of the public, that the property to be acquired was for a public use, and that the expenditure of funds therefor was for a public purpose.

To fully understand the scope of the project, it is necessary to set forth the participants and the method of financing.

Westlake Associates is a Washington limited partnership composed of Daon Corporation as general partner with a 50 percent ownership interest, the Seattle Art Museum as a limited partner with a 30 percent ownership interest, and Mondev as a limited partner with a 20 percent ownership interest.

The financial structure of the Westlake Project was principally determined by six contracts: (1) the agreement between the City of Seattle and the Westlake Development Authority for the development of the Westlake Project; (2) the amended tripartite agreement for the Westlake Project between the Westlake Development Authority, the Seattle Art Museum and Westlake Associates; (3) the Urban Development Action Grant of April 4, 1979 as amended; (4) the limited partnership agreement of Westlake Associates; (5) the contract for project coordination services; and (6) the City-Museum Agreement 1931 as amended.

Those contracts obligate the City to acquire all properties necessary for the project, and transfer all properties north of Pine Street to the Westlake Development Authority, either by deed or by 99-year lease; to build and maintain a proposed park south of Pine Street; to pay all costs of relocating businesses, moving utilities and revising traffic patterns; to build a temporary monorail terminal; to operate and maintain the permanent monorail terminal; and to transfer $1.26 million of proceeds from city bonds to the Westlake Development Authority.

As of April 1980, the City estimated its cost of the Westlake Project would equal $17,809,000. The City intended to finance its obligations by issuance of $12.6 million of general obligation bonds, use of $975,000 from the Forward Thrust bond issue, receipt of $3,463,000 of Urban Development Action Grant funds and $771,000 from other sources.

The Westlake Development Authority agreed to have the project built in accordance with plans prepared by Mitchell/Giurgola in September 1978, and to pay its net revenues, if any, from the project to the City. Westlake Associates has no obligation to the City of Seattle to repay any city expenses.

The Westlake Development Authority is required to renovate the Times Square Building and lease the entire building without cost to the Seattle Art Museum for an initial term of 66 years for use as part of the museum facility, allowing the museum to sublet the remaining commercial space in that building to others as a source of income.

In the new building to be constructed, the Westlake Development Authority is obligated to lease to the museum air rights, storage and other space for an initial term of 66 years upon...