The Black Hole of Holly Park

First the Seattle Housing Authority eliminated hundreds of low-income units in Holly Park. Now it's spending millions more than expected on that renovation. And, as Mark Worth recounts, it's got the same sort of plans for White Center.

BY REBUILDING HOLLY PARK, the Seattle Housing Authority proposes to eliminate a huge cluster of World War II­era cracker boxes, and maybe even revolutionize public housing in Seattle. But along the way, it's digging itself into one sticky controversy after another. SHA overcame the first round of objections—that its plan to convert the dilapidated 871-unit Southeast Seattle housing development into a 1,200-unit mixed-income neighborhood would eliminate 470 units now reserved for the poorest residents—through creative accounting. Now come new fears: that the project is a financial black hole absorbing far more than its share of housing funds.

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The immediate question seems simple enough: Is the first phase of Holly Park reconstruction over budget? Yes indeed, says the Seattle Displacement Coalition, comparing budget figures from January 1997 and February 1998: Its rental-housing portion is already more than $5 million over budget.

Not so, reply Housing Authority officials, who claim critics unfairly bolster their arguments with preliminary estimates rather than hard numbers. SHA board chair Bill Block says it didn't submit its first official budget to the city until last September, and the second, February breakdown actually showed slightly lower costs. However, both of these totals are significantly higher than those submitted to the City Council when it approved funding for the first of three project phases. The latest budget pegs each of the first 305 rental homes at a whopping $166,365—up from $131,339 presented to the council last May. Even after factoring out developer's fees and a three-year operating reserve, which SHA officials say were added to the budget for bookkeeping purposes, the current per-unit cost is $147,350.

Holly Park program manager Henry Popkin says that the council's funding schedule forced SHA to release premature estimates that proved to be understated. He and SHA development director Doris Koo liken these to a journalist's first draft. SHA executive director Harry Thomas offered a more metaphysical argument in a recent letter to the City Council: "Budgets are forecasts. In real terms, there are no cost overruns."

Maybe not, but the rising numbers arm SHA's critics. John McLaren, a housing architect who has worked on several publicly funded projects and helped draft alternative Holly Park designs for the Displacement Coalition, says he was shocked by SHA's plans; its level of planning detail appeared far below what he'd seen elsewhere. With proper estimating, says McLaren, construction overruns can be handled by a contingency fund of as little as 4 percent. SHA's hard construction costs are already 14 percent above original estimates. Further discrediting SHA's budgeting, the Seattle Displacement Coalition warned the city last May that SHA would garner far more—$3 million to $4 million more—from selling tax credits than it had estimated. The actual windfall: $5 million.

SUCH PRESCIENCE HASN'T BEEN LOST on new City Council members Nick Licata and Peter Steinbrueck, who didn't vote on the original city allocation. "There's been more evidence to support the critics' position than SHA's," says Licata.

SHA officials disagree, and insist that the coalition's alternative designs showed just $3 million in potential savings—not the more than $10 million their authors claimed. SHA also charges that its critics have driven up the project's costs. Popkin says professional evaluations of the alternate design and infrastructure proposals cost "tens of thousands of dollars." SHA also accrued legal costs from the coalition's short-lived appeal of the project's master-use permit, and had to hire a historian to prove the now-demolished structures lacked historical significance. Koo says these and other coalition actions delayed the project six months.

"In one sense, I should feel flattered that they take us so seriously," replies Displacement Coalition coordinator John Fox, who dismisses SHA's charges as "ridiculous." He notes that state officials initiated the historic review; the coalition merely asked for a public hearing. And it dropped its permit appeal after one week.

Fox first criticized the project for reducing the number of units reserved for public housing residents from 870 to 400. Although City Council member Richard McIver negotiated a compromise that would increase subsidies to the residents of 470 new low-income units around the city, Fox still questions giving high priority to a costly project that merely maintains the current number of public housing units. The authors of the coalition's alternative proposal (a blue-ribbon group including McLaren, developer Kurt Feichmier, financial analyst Dean Mielke, and noted housing architect Michael Pyatok) claim if their alternatives were implemented over all three project phases, an extra 300 units could be funded from the total $180-million-and-counting budget.

SHA's Block responds that Holly Park is a visionary proposal intended to transform public housing in Seattle. It will include not just new homes but a Campus of Learners complex, with library, community college branch, and job training. Public-housing tenants will now be integrated into a new neighborhood with families of all income levels. "There is clearly a difference in philosophy," says Block. "The Displacement Coalition's priority is keeping units regardless of their condition, not the social issues that are created by higher concentrations of the very poor."

Even its critics conceded that the new Holly Park will be a showplace. But its construction has split housing advocates into opposing "quantity" and "quality" factions. The final price tag will help determine which philosophy prevails.

Related Links and information:

Seattle housing stats


Housing crisis numbers, including contact info. for the Tenants Union


Subscribe to Eat the State, an edgy local politics mag.


The National Low Income Housing Coalition


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