Martin Selig, a prominent office developer in Seattle, is facing a growing list of unpaid bills that is raising concerns in the city.
In the spring, it was revealed that Selig — whose financial troubles have been exacerbated by the pandemic — had become delinquent on $2.2 million in property taxes for five of his downtown buildings in King County, the Seattle Times reported.
The buildings, like many others, have struggled with high vacancy rates during the pandemic, putting financial strain on the developer.
In early August, the city of Seattle sued Martin Selig Real Estate over $172,200 in unpaid fees related to street use permits for construction projects.
However, the biggest concern for Selig and his company is the looming $2.7 million bill of fees, penalties, and interest owed to the Metropolitan Improvement District, a city-backed initiative aimed at revitalizing downtown Seattle in the wake of the pandemic.
The district relies on fees assessed on over 1,000 downtown property owners to fund various improvement projects, including trash and graffiti removal, security, and public programming.
Selig’s delinquency accounts for a significant portion of the district’s outstanding debts, and its resolution is critical for the district’s recovery efforts. The district’s budget for the 2023-24 fiscal year anticipates revenue of $18.5 million from its ratepayers, most of whom have been diligent in paying their fees.
While Martin Selig Real Estate has expressed its intention to address these outstanding balances, the city’s response has been less clear. The Office of Finance referred the unpaid district assessments for Selig’s properties to the City Attorney’s Office, but a resolution remains uncertain. The city’s limited tools for corrective action in such cases, compared to property tax collections, have complicated the situation.
Despite these challenges, the Downtown Seattle Association, which manages the district, maintains that Selig’s delinquencies and those of other district members do not threaten its operations. They attribute this resilience to higher-than-expected assessment revenue collection during the pandemic, which has allowed them to cover additional expenses from reserves.
However, critics like Steve Horvath argue that the failure to collect assessments from large companies like Selig’s unfairly burdens smaller property owners who diligently fulfill their financial obligations. Horvath sees this as a glaring example of privilege favoring larger entities and calls for equitable enforcement of district assessments.
Selig, 86, who is known for his resilience in previous downturns, is facing unprecedented challenges in the city’s current office market slump caused by the pandemic, the Seattle Times reported.
Despite his reputation as a deal-maker, Selig’s office portfolio has an uncomfortable 19 percent vacancy rate, significantly higher than the single-digit rates seen in 2019.
Some of his newer properties, such as the Federal Reserve building and 400 Westlake tower, are struggling to find tenants.
— Ted Glanzer