The Washington State Convention Center’s (WSCC) expansion project is being examined both at the county level for the sale of Convention Place Station and at the city level for public benefits required by the street and alley vacations requested by the WSCC. Regarding public benefits, the WSCC has come up short of the expectations of both community groups and the Seattle Department of Transportation. Chairman of the WSCC board of directors, Frank Finneran wrote in a Seattle Times letter to the editor that “We have seen past projects get buried by overwhelming public benefits; we hope this project isn’t buried, too.”
Before the City and County accept the WSCC’s claim of a limited budget for public benefit, they should closely examine what private entities with close personal ties to the project have benefited from the WSCC’s $1.6 billion budget so far.
In March of 2016, after a closed door meeting, on the advice of the project’s developer, Pine Street Group, the WSCC fired the joint venture of Skanska/Hunt which had been selected as general contractor/construction manager (GC/CM) of the project eight months earlier. The WSCC gave vague cost concerns and the team not being a good fit as reasons for termination. Skanska/Hunt sued the WSCC claiming there had been no legitimate grounds for termination, and in the process secured an injunction to prevent the WSCC from hiring another GC/CM bidder from the original bidders. The parties settled the lawsuit in April of 2016 for $7.8 million, and the joint venture of Lease Crutcher Lewis (LCL)/Clark, the second place team in the original selection process, was selected for the project going forward.
While the selection of the second place team seems logical, the strong personal ties between Pine Street Group and LCL provide a different insight into the termination of Skanska/Hunt. The Seattle Design Commission, the city board that evaluates public benefit packages required for street and alley vacations before they are sent to City Council, lists Jane Lewis as the contact for the WSCC expansion project. Ms. Lewis is a principal at Pine Street Group and
is also was previously married to Bill Lewis, former CEO of Lease Crutcher Lewis and current chair of the company’s board of directors. Additionally, according to a 2004 Daily Journal of Commerce profile, Matt Griffin, managing partner of Pine Street Group, and Bill Lewis were college roommates at Princeton. The ties between Pine Street Group and LCL are extremely strong, and all parties were aware that LCL/Clark had been the second place finisher.
Soon after LCL/Clark was hired, in June of 2016, the WSCC announced an increase in the budget of $200 million bringing the new total to $1.6 billion. The immediate increase in the budget by such a substantial amount, seems highly suspect after cost concerns were given as the main reason for termination. In a June 2016 interview with The Seattle Times, Matt Griffin indicated that the budget increase happened before the new GC/CM was selected, and that the increase reflected “basically what things cost in Seattle these days.” However, according to meeting minutes from the WSCC’s board of directors, the budget increase was approved only a few weeks before LCL/Clark was officially announced as the new GC/CM, and the increase was not even considered by the board or the addition committee until after the lawsuit from Skanska/Hunt was settled, lifting the injunction on hiring a new GC/CM. Meeting minutes from March of 2016 (before the settlement) state specifically that the budget would not be increased. Meeting minutes from May of 2016, however, indicate the board voted to increase the budget based on a financial plan dated April 26, 2016, the exact day the lawsuit was settled.
The WSCC is funding this expansion entirely with public money: revenue from lodging taxes collected in Seattle and King County. Despite years of consistently high occupancy rates in the region’s hotels, the increased budget currently exceeds expected revenues from existing taxes and the WSCC is asking the state legislature to increase lodging taxes on small hotels and short-term rentals like Airbnb. Unsurprisingly, the current budget shortfall is about $200 million, the same amount as the budget increase after LCL/Clark was hired.
As a Public Facilities District (PFD), the WSCC and their agents have a duty to act in the interests of the public they are meant to serve. Unfortunately, the WSCC has been operating more like a privately owned, but publicly financed corporation, and the PFD’s structure allows almost no oversight from local elected officials. These reviews by the county council and the city council are the only opportunities for public oversight of the WSCC’s actions. While the WSCC’s and Pine Street Group’s actions regarding the GC/CM selection may be legal, it does not mean they have acted in the interest of residents of Seattle or King County. Before accepting the WSCC’s claims of poverty when it comes to providing public benefits, the City and the County should seriously question whether the WSCC is truly acting in the public’s interest.
King County is holding a public hearing on Monday, June 19th to discuss the sale of convention place station to the WSCC, and have planned a vote of the full council on Monday, June 26th. If you cannot attend in person, please call or write to your county councilmember.
City of Seattle will be reviewing the public benefits package in the coming months. Contact your city councilmembers to let them know your thoughts.
Update 6/22/2017: The Urbanist received the following comment from the WSCC in response to this article: “We strongly disagree with this editorial, especially regarding the general contractor selection process and the team’s budget management. This piece is speculative and implies dubious intent which is patently untrue and extremely misleading. This project offers substantial benefits to the public, and its stewards are committed to serving the community responsibly.”
Editor’s Note: This article has been edited to reflect that Bill and Jane Lewis are no longer married as reported in the original publishing.
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