BlueRay to face eviction suit

Blu-ray disc manufacturer BlueRay Technologies Inc. allegedly evicted dozens of poor residents of the downtown Commercial Building illegally, according to a class-action lawsuit a Spokane nonprofit law firm said it intended to file Thursday.

The Center for Justice claims BlueRay didn’t give 47 residents living in the building’s federally subsidized, single-room apartments a year’s eviction notice as required by state and federal laws, according to a copy of the Spokane County Superior Court complaint provided by attorney Breean Beggs. The suit asks for a court order to temporarily keep the building as low-income housing, unspecified monetary damages for relocation and other costs and some statutory damages.

“Defendants’ illegal eviction without one year’s prior notice … can only be remedied by requiring defendants to keep this unique building open as subsidized housing for an additional year after the required notice is served,” the suit alleges.

An attorney for BlueRay called the lawsuit “frivolous,” saying past subsidy contracts applied to the prior owner, not BlueRay.

“The Center for Justice needs a test case because they’ve got the Otis Hotel coming up and they want to get some kind of ruling at the expense of BlueRay, which was never a party to any contract that they’re talking about,” said attorney Steven Schneider. “BlueRay is the good guy in all this.”

Susan Jenkins, vice president of administration and public policy for BlueRay, declined to comment Thursday.

Valencia, Calif.-based BlueRay bought the three-story building, 1115 W. First Ave., out of foreclosure in April, displacing tenants and a nonprofit mental health clinic that served them, to build a multi-million-dollar plant. The company has installed high-tech machinery in the basement and begun remodeling upper floors.

Since then, dozens of low-income tenants of the nearby New Madison Apartments were displaced, and more than 80 residents, including sex offenders, face eviction from the Otis Hotel adjacent to the Commercial. The emptying of downtown buildings has strained Spokane’s social services agencies, some officials say.

Formerly owned by Otis Associates Limited Partnership, the Commercial Building offered units subsidized by U.S. Department of Housing and Urban Development money administered by Northeast Washington Housing Solutions. Some tenants received special vouchers from HUD to help fund one-bedroom apartments, which officials said could better their quality of life.

The suit alleges that when BlueRay bought the building, it also purchased an assistance contract and rights to collect tenant deposits, making the company subject to the state and federal housing laws – a claim Schneider denied. Under state law, the suit claims, BlueRay should have informed tenants, the city, Housing Solutions and a state agency one year before ending the subsidized housing.

It also claims the building was required to be low-income housing until at least 2010 under a 1994 agreement with a federal home loan bank, though Schneider contended the provision was extinguished by the foreclosure.

Company representatives have said they donated the building’s furniture to tenants, gave them money and worked with local officials to smooth the move. Jenkins has said grateful tenants wrote letters of appreciation to BlueRay.

But the suit, which specifically names just two former residents, claims the men – homeless before living in the Commercial Building – have suffered negative medical effects, incurred moving costs and lost easy access to downtown services since relocating. Neither had hundreds of dollars in deposits refunded, the suit alleges.

Beggs asserted the center isn’t looking for a test case for the Otis. There is more need, however, for subsidized housing because of the closing of other buildings, he said.

“If there were no other buildings closing, our clients would have less interest in holding BlueRay to its responsibilities,” Beggs said.

The lawsuit isn’t frivolous because the state and federal laws are clear on their face, Beggs argued, adding the center held off filing the suit for several weeks to give BlueRay and the housing authority time to respond.

HUD Deputy Regional Director Martha Dilts has contended the two statutes don’t apply since the annual housing contract was not renewed with the Otis Associates because of foreclosure proceedings.

Steve Cervantes, Housing Solutions executive director, has asserted the state and federal provisions apply to buildings that house voucher recipients, not to subsidized single-room units.

“I feel like they are missing the big picture,” he said of the center.

Schneider said BlueRay hadn’t been served with the suit as of Thursday evening.