[below] - "Place Pigalle, Pike Place Market, Seattle, Washington. The now-elegant restaurant was, until the late 1970s, a rather rowdy bar and universally referred to as the "Pig Alley". - Joe Mabel
in Seattle's Pike Place Market
The year was 1937 when the Loutsis family acquired Title to1 of 10
"81 Pike Street, Seattle" aka The Cliff House Hotel.How a building once slated for demolition became one of the buildings 'saved' in the "Historic District" of Pike Place Market, is a story close to my heart.
A heart in "The Soul" of the city.
2 of 10History as it relates to the Cliff House Hotel before it was publicly owned, is close to my heart because my grandparents took ownership of the property in 1937. As Greek and Italian immigrants, they met and married in the U.S., giving birth to 13 children by the late/post depression era when they acquired the Cliff House Hotel, in Seattle's Pike Place Market.
About
3 of 10Their ownership preceded the 1939 market renovations, World War II , and the infamous 'Nellie Curtis'. It lasted through the prosperous, the decline, the quirky, the politically charged, the artistically vibrant, the extraordinary, and the uncertainty of the market - continuing nearly 4 decades in passing on to the Loutsis children.
The family's ownership continued through the late 1970's when the building became part of the "Pike Place Public Market Historic District" designated by the city to be rehabilitated.
Cliff House
4 of 10The Cliff House (c1901) is one of the older buildings in the "Historic District"- built before the market opened and before many of the market buildings. It overlooks Elliott Bay waterfront on the Hillclimb side of the market with a steep stairway beside it that leads from Western Ave toward the distinguished neon market sign.
The Lotus Tavern, Place Pigalle Tavern, Nature's Arts Studio: each once operated from the Cliff House building.
Cliff House
5 of 10Following the war and a decline in the condition of the market it was a topic of many political discussions ranging from demolition to preservation. When the Cliff House ceased operating as a hotel, Place Pigalle Tavern which it housed remained open. With the fate of the market threatened, voters approved a plan to save it in 1971, creating a preservation district that the Cliff House became part of.
Cliffhouse Hotel
6 of 10Through the courts, the Loutsis family children sought to keep and develop the 6 story building, which included "Place Pigalle Tavern". They did not however propose to develop it for the purpose of creating low-income housing as apparently indicated in a city plan. Sometime after 1975 the Cliff House Hotel / 81 Pike Street Seattle / #1A A DENNYS 4TH was acquisitioned by the City of Seattle via Eminent Domain.
Cliffhouse Hotel
7 of 10It however would not be the last time 'Title' to The Cliff House Hotel would be before the courts. Settling 'Title' again occured as late as 1991. The Cliff House being among the first 2 market buildings included in "real estate agreements" from the early 1980's is described in a HistoryLink Essay. Photographs from the Seattle Municipal Archives can help re-create a timeline. Numerous files indexed therein relate to the Cliff House/Loutsis property through 1978.
Cliffhouse Hotel
8 of 10Discover exciting things happening in "The Soul of Seattle' everyday by visiting Pike Place Market online. Find video, events, and entertainment on The Seattle Channel. Read historical information about the notorious Desimone Family: Giuseppe "Joe" Desimone and his son Richard Desimone on Wikipedia. There are lively accounts of a line of sailors at the Lasalle Hotel, once-upon-a-time .... who from Seattle's waterfront, likely passed the Cliff House along side its steep stairway from Western toward the Market.
Background
9 of 10During the 2009 Hillclimb renovation, I posted on the rich history of The Market and the Loutsis family who owned the Cliff House Hotel from 1937 until it became one of the buildings in the "Pike Place Public Market Historic District". Many of the external links originally provided are no longer active, hence this update in progress.
Today
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The Cliff House now operates as part of the LaSalle building and is overseen by the Pike Place Market PDA.
Take a cybertour of the district and enjoy a sketch mapping the LaSalle Buildings inclusive of the Cliff House from HistoryLink, also available there in a printable walking tour of Pike Place Market.
Pike Place
Photo Courtesy Seattle Municipal Archives
Cliffhouse
The year was 1937 when the Loutsis family acquired Title to "81 Pike Street, Seattle", then known and operating as the "Cliffhouse Hotel".
1972 View
Photo Courtesy Seattle Municipal Archives No. 36190
1967
Photo Courtesy Seattle Municipal Archives No.32805
1972
Photo Courtesy Seattle Municipal Archives No.32628
1975
Photo Courtesy Seattle Municipal Archives No.34864
[above] - 2006 Elliot Bay Photo by Jan Kronsell - Hotel North Wall shown left
Heart in the soul...
New York investors give up their claims to own Seattle's Pike Place Market in a legal settlement approved on October 15, 1991.
HistoryLink.org Essay 8972 :
On October 15, 1991, Bankruptcy Court Judge Frank D. Howard approves a settlement agreement that ends two years of controversy and litigation over who owns and controls 11 historic buildings that make up most of Pike Place Public Market, the defining landmark of downtown Seattle. The dispute arises from a complex series of real-estate transactions in the early 1980s through which the Urban Group, a private investment group based in New York, gained legal title to the market buildings, ostensibly in a tax-shelter deal that provided $3 million for market renovations. The "sale" of the market became public in 1989 when the Urban Group demanded millions in back earnings and circulated plans to boost rents. Alarmed Pike Place Market supporters responded by organizing a Citizens Alliance to reclaim the market, prompting a flurry of lawsuits challenging the investors' title and countersuits by the investors. In 1991, after legal setbacks force it into bankruptcy, the Urban Group accepts a cash buyout of its interest and the public regains clear title to the historic Pike Place Market.
Public Market
The struggle against the Urban Group marked the second time that citizen activists banded together to save the Pike Place Market. Founded in 1907 and largely constructed over the next decade, the Public Market consists of a long arcade of street stalls lining Pike Place on the bluff overlooking Seattle's waterfront, where vendors hawk fresh produce, flowers, fish, and crafts of all kinds, surrounded by a series of market buildings containing a warren of small shops and restaurants. Although it now draws many millions of visitors yearly, both locals and tourists, Pike Place Market nearly disappeared in the 1960s, when downtown business leaders and city officials targeted the area for urban renewal. That time, architect Victor Steinbrueck (1911-1985) founded and led the loosely organized Friends of the Market, which ultimately won a 1971 initiative vote preserving the market as an Historic District. The new fight would be led by Victor's son Peter Steinbrueck (b. 1957).
Two years after the Historic District was approved, the Seattle City Council created the Pike Place Market Preservation & Development Authority (PDA) to purchase and manage the buildings that made up the market. With considerable assistance from Senator Warren G. Magnuson (1905-1989), legendary for his ability to channel government spending to his home state, more than $50 million in federal funds flowed to the market during the 1970s, allowing the PDA to acquire most of the major market buildings and and begin much-needed rehabilitation and restoration. However, the money stopped flowing by the end of the decade as the economy tightened and Magnuson lost his seat in the 1980 election.
Private Investors
By early 1980, although much work had been done, substantial renovations were still needed and their cost far exceeded the rents that the PDA received from market merchants. It was then that PDA Executive Director John Clise and his staff turned to a tactic that other nonprofit agencies used to raise funds: selling tax depreciation rights (that a tax-exempt nonprofit does not need) by transferring legal interests in historic buildings to private investors who can claim the depreciation as a write-off against other income. Apparently assured by its lawyers that doing so would not risk the market buildings, the PDA looked for tax-syndication investors and quickly connected with the Urban Group.
Headed by New York tax and real estate lawyers Arthur Malman and Martin Major, the Urban Group already had invested in several area historic buildings, including Tacoma's Pantages Theater. In April 1980, the PDA and the Urban Group made their first deal, a "tax sale" contract for two market buildings, the Sanitary Market and the Cliff House, with an initial payment of $700,000 to the PDA. Over the next three years, in a complex series of deals spelled out in thousands of pages of legal documents, similar contracts were signed for eight more market buildings. Altogether the deals gave the Urban Group legal title to 11 market buildings or almost 90 percent of the public area that the PDA managed, in return for "down payments" totaling just under $3 million.
The "sales" contracts called for a total purchase price of over $20 million, far more than Pike Place Market's existing income would support, and PDA officials evidently assumed that the Urban Group investors would claim their tax breaks and default on the "purchase" when balloon payments for the rest of the price came due in the late 1990s. The investors were able to realize $10 million in tax savings, but then the federal Tax Reform Act of 1986 eliminated the tax breaks. By 1989, the Urban Group sounded less like tax investors and more like an absentee landlord. After auditing the PDA's books, the investors asserted that they were entitled to millions of dollars in market income, demanded that the PDA cut costs, and circulated plans for large rent increases.
Citizens Alliance
When the Urban Group's demands -- and its "ownership" of Pike Place Market -- became public in late 1989, an uproar ensued. Market vendors, newspaper columnists, and letter writers all joined in denouncing the New York investors. Many also criticized the PDA, asking how it could have sold the public's market. Among those was architect Peter Steinbrueck, who like his father before him organized an advocacy group -- the Citizens Alliance to Keep the Pike Place Market Public. Steinbrueck was able to assemble a high-powered team of local lawyers who volunteered their time on behalf of the Citizens Alliance and concluded, after analyzing the voluminous legal documentation, that there were strong grounds to challenge the deals between the PDA and the Urban Group. Seeking more legal firepower, Steinbrueck convinced Seattle City Attorney Mark Sidran to throw the support of the city's legal team behind efforts to keep the market public.
Under pressure, the PDA hired its own lawyers, including Gerald Johnson, Senator Magnuson's former chief of staff. Johnson advised the PDA that it needed a tough negotiator to deal with the Urban Group and the agency got one -- Shelly Yapp, a former Seattle deputy mayor. Yapp began as a consultant but by mid-1990 she became Executive Director of the PDA (a post she would hold for 10 often-contentious years), while continuing to play a lead role in the negotiations and litigation.
By the spring of 1990, the legal maneuvering culminated in in an array of lawsuits and countersuits between the four involved parties -- the Citizens Alliance, the City of Seattle, the PDA, and the Urban Group. All the cases ended up in the courtroom of veteran Superior Court Judge Frank L. Sullivan. Local market supporters won the first round on October 31, 1990, when Judge Sullivan announced a series of preliminary rulings in their favor. Soon after, the Urban Group found itself unable to pay its own lawyers.
Seattle's Soul Saved
The Urban Group responded by filing for bankruptcy in federal court in New York, putting Judge Sullivan's legal rulings (and the legal fees it owed) on hold and moving the battle to its home turf. Lawyers for Seattle and the PDA worked quickly to reverse this last effect, asking the New York judge to transfer the bankruptcy case to federal court in Seattle. PDA attorney Fred Tausend devoted his argument to history rather than legal citations, showing historic photos of Pike Place Market as he explained the importance of what he called "the soul of Seattle" (Shorett and Morgan, 159). Tausend and Sidran convinced the New York judge to send the case to the Seattle courtroom of U.S. Bankruptcy Court Judge Frank Howard.
When Judge Howard ruled in May 1991 that Judge Sullivan's orders could be enforced against the Urban Group, the investors appeared ready to settle the case and give up all interest in the market in return for cash to invest elsewhere. Led by Yapp, the PDA was willing to agree, although market vendors and others expressed disgust at having to pay off the New Yorkers and at the PDA for having created the problem. Putting aside their differences, the Citizens Alliance, the PDA, and the city jointly lobbied the state Legislature for money to fund the settlement, winning a $1.5 million appropriation. The city provided another $750,000 in public funds, and title companies who had insured the legal title that the Urban Group purchased kicked in $750,000 more, giving the investors a buyout of $3 million, equaling their initial investment.
The Urban Group approved the settlement in July 1991 but it took several more months to work out all the details. On October 15, 1991, Judge Howard officially approved the settlement, ending the Urban Group's involvement and returning the Pike Place Market to undisputed public ownership.
Sources:
Alice Shorett and Murray Morgan, Soul of the City: The Pike Place Public Market (Seattle: The Market Foundation, 2007), 137-61; Bill Dietrich, "Seattle Officials Sold City's 'Soul' to N.Y. Investors," Los Angeles Time, February 5, 1990, p. 4; Timothy Egan, "Seattle Journal: In Defense Of Quirks, A Market and a City," The New York Times, December 18, 1989, p. A-16; Debera Carlton Harrell, "Judge Approves Market Accord; $2.25 Million Settlement Ends Fight," Seattle Post-Intelligencer, October 16, 1991, p. B-1; Mike Merritt, "Investors Give up Claims to Market; Urban Group Agrees to $2.25 Million Settlement," Ibid., July 9, 1991, p. B-1; Robert T. Nelson, "Judge Keeps Local Control For Market," The Seattle Times, October 31, 1990 (http://community.seattletimes.nwsource.com/archive/); Nelson, "Legality Of Market Sale To Investors Disputed," Ibid., March 9, 1990; Terry Mcdermott and James E. Lalonde, "Market Investors Foresee Triple Rent -- New Yorkers Also Seek To Sell Part Of Pike Place," Ibid., January 11, 1990; HistoryLink.org, The Online Encyclopedia of Washington State History, "Pike Place Market (Seattle) -- Thumbnail History" (by Walt Crowley), (accessed March 24, 2009).
By Kit Oldham, April 01, 2009
This essay is licensed under a Creative Commons license that encourages reproduction with attribution. Credit given to both HistoryLink.org and to Author Kit Oldham.
