Vestal: Owners move on, sale likely after bureaucratic tangle

A conclusion to the Muzzy Mansion saga may be on the horizon, but you wouldn’t call it a happy ending, exactly.

Mike Schultz and Steven Sanford spent years and around $70,000 trying to restore the historic, 121-year-old West Central landmark as a bed-and-breakfast inn. They left town in August, embittered by a battle with city officials over code issues, with Sanford’s finances in a wreck and the house headed for foreclosure.

Four months later, things look a little brighter, Schultz said earlier this month. He and Sanford have started again in Seattle, where they both have jobs. And a buyer may have surfaced for the mansion – if the lender approves the short sale, it will go for less than half the initial list price.

“We’re back on our feet financially and emotionally because we’re not fighting the overwhelming, growing burden we’ve come to know as Spokane City Hall,” Schultz said last week. “We’re not living in that place of anger we were five, six months ago. We’re trying to move on.”

The city, meanwhile, is making concrete progress on its effort to improve the way it deals with people applying for “change-of-use” permits, as Schultz and Sanford were. After a series of focus-group meetings, city officials are looking to streamline the process, to centralize and simplify information about code requirements, and to see if some requirements are unnecessary, said Chris Cavanaugh, director of the Employee Led Initiatives department.

“People will be able to walk into a project with their eyes open” about the cost, time and money required, she said.

Seemingly simple steps that are soon to be adopted – such as a checklist of requirements for business owners – might have steered the Muzzy Mansion problems off the shoals.

The two men approached City Hall in 2009 to seek permits and licenses to turn the mansion into a bed-and-breakfast inn. They were granted a business license in October of that year – and they began the slow, day-by-day process of renovating the 1889 Queen Anne Victorian.

Schultz and Sanford acknowledge that they didn’t get the proper permits for some of the work, which they say was mostly cosmetic. But you’d have to be a genius to follow the contradictory information that emerged from different departments as they tried to resolve this.

First, they were granted a business license, then told months later by the Fire Department that the license was no good. Twice they thought they had a resolution in the offing, then the building was declared “unsafe for occupancy” over electrical and fire issues, and their business license was revoked.

In May, the men had to stop accepting guests. And stop accepting guests’ payments. And, eventually, stop making payments of their own to their lender.

For three months, they tried to resolve the problems. At one point, they thought their attorney had reached a deal with the city attorney’s office, only to be told by an inspector that city attorneys did not speak for them.

By August, their savings were gone and they could no longer cover the mortgage. They listed the home at $375,000, sold off antiques and packed their belongings for Seattle.

“We have felt heartbroken, angry and exhausted, and we’ve gone through a grieving process of knowing that we’ve lost the house,” Schultz said at the time.

City officials said they were simply trying to ensure that the mansion was safe. Some of the electrical work the homeowners had done, for example, had been walled in so inspectors couldn’t tell whether it had been done properly. But it would be hard to imagine doing a worse job of explaining things than the city did in this case, department by contradictory department.

When the news of their sale of the mansion became public, they heard an outpouring of support from people who loved what they were doing to the mansion or had their own stories from the mansion – or horror stories with the city. Sanford had to declare bankruptcy. His company transferred him to Seattle, and Schultz was able to find work relatively quickly.

They rented an apartment and bought a boat, a 1964 50-foot Chris-Craft Constellation, which they are restoring. By February, they hope to be living on the boat and taking off for the San Juans when the urge strikes. Eventually, Schultz said, they hope to take on another project like the Muzzy Mansion.

Meanwhile, he expects the mansion to be formally listed on the National Historic Register soon. But interest from buyers was slight, partly due to the publicity over the conflict with the city, Schultz said. Despite the bankruptcy, both Schultz and Sanford wanted to keep a hand in finding a buyer for the mansion – hoping to minimize the loss to the lender, Schultz said. Finally, they began aggressively lowering the price. A pending short sale for $170,000 is awaiting approval; if that isn’t OK’d, the bank will have to proceed with foreclosure, Schultz said.

Meanwhile, the contradictory communications from the city keep coming. They’ve been getting dunning letters over their expired business license – the one that was revoked in May, when the city declared the home unsafe for occupancy.

“They’re demanding we renew it,” Schultz said, “and threatening to send us to collection if we don’t.”