March 26, 2009 in City

Low-income housing may return

Commercial Building owner, ex-tenants working on deal
By The Spokesman-Review
 

Two years after nearly 50 tenants of the Commercial Building were displaced by a high-tech manufacturing company, the downtown apartments may once again house low-income residents.

A federal judge has delayed a lawsuit by two of the former tenants against the building’s owner, BlueRay Technologies Inc., while lawyers for both parties try to reach a settlement.

Key to the deal will be finding a property manager to convert the top two floors of the building, 1119 W. First Ave., back into low-income housing.

“We’re negotiating a lease with a provider that does that same sort of thing,” said Steven Schneider, attorney for BlueRay Technologies owner Erick Hansen.

Schneider would not identify the property manager, but he said the agency is involved in housing and substance abuse treatment. Court documents refer to “a Seattle provider of management services for low-income housing.”

Two former tenants, Stephen Harris and Garry Campbell, sued BlueRay Technologies after it purchased the Commercial Building out of foreclosure in 2007 through a related company, Pacific First West LLC.

The new owner ousted all the building’s tenants, which included formerly homeless people and a mental health agency.

Harris and Campbell, represented by a public-interest law firm, the Center for Justice in Spokane, sued in U.S. District Court for Eastern Washington, claiming the company did not give tenants one year’s notice as required by law. They asked the court to require BlueRay to provide subsidized housing, as well as other damages.

Though Hansen purchased the Commercial Building purportedly to create a clean room in its basement for the manufacture and distribution of Blu-ray discs, BlueRay Technologies has yet to produce a disc.

A year ago, the company announced it would offer the upper two floors of the three-story building for sale as executive office suites or apartments, The Spokesman-Review reported.

In February, U.S. District Court Judge Fred Van Sickle agreed to stay the case until May 5 while the parties work out a deal.

“Negotiations are continuing, but are very positive,” said Breann Beggs, of the Center for Justice.

The purchase of the Commercial Building was one of several Spokane real estate transactions beginning in 2007 that resulted in the loss of about 260 units of affordable housing in a low-income market that was already tight.

Kevin Graman can be reached at (509)459-5433 or kevingr@spokesman.com.


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