Seattle Strives to Save Landmark That Symbolizes the City's Charm

SITTING in a waterfront restaurant here, Seattle Times columnist Emmett Watson rattles off reasons why his city continues to become what it didn't used to be - a city of heavy traffic, high-rises, torn-up streets, and increasing crime and drug problems. He points toward rustic Bainbridge Island, where controversies over development have made recent headlines, and across Elliot Bay to west Seattle, where the forests of his youth have been replaced with homes and condominiums.

He grumbles about clogged freeways, recently exacerbated by heavy rains which helped sink a floating freeway bridge under renovation. The debris also damaged its newly opened sister bridge across Lake Washington.

Mr. Watson, who indicates that he wants to control growth, not stop it, started an interstate squabble that hit newspapers from London to Australia two summers ago. He advised Californians to quit moving to Seattle with their swanky cars, pollution, big money, and big-city attitudes.

Today he's grumbling about a more serious interstate squabble. Since February, a group of New York investors have been posing a dangerous threat to ``the last bastion of everything that is real and sacred about this town'' - the waterfront Pike Place Public Market. Said to be the largest tourist attraction between Vancouver and San Francisco, the market is a 7-acre, 12-building National Historic District with 250 businesses, including those run by 100 farmers and 200 arts and crafts people, and 500 residents.

A stroll through the area's many shopping levels, alleys, arcades, boutiques, and bakeries is a journey of smells (bread, curry, crab), sounds (musicians, produce sellers), and the best views of ocean and mountains around.

Established in 1907 to bring consumers and farmers together with no middlemen, the market prospered until post-World War II flight to the suburbs left it sagging from disuse and neglect. A grass-roots effort in 1971 to save the market created one of the nation's first historic districts where both uses and design were protected. But the governing authority ran out of funds in 1978, and the market was turned over to the private sector.

A $3 million investment by the New York-based Urban Group essentially bailed the Pike Place Management Authority out of crisis. A public Preservation and Development Authority (PDA) was to continue running the market under strict historic-district guidelines. The Urban Group was to benefit from federal tax deferrals on its investment as well as ``fair economic return'' on the rental of the buildings. But in the decade since, the Urban Group says, it has realized only $4,000 profit on its $3 million investment. After conducting an audit of the market, the Urban Group demanded last February that the PDA pay for a $4.5 million shortfall.

In response the city, a citizens alliance, and the PDA are suing the Urban Group, claiming its demands have no legal basis. The citizens' alliance is also suing the PDA and Urban Group, claiming that the original agreements were illegal.

An Oct. 31 ruling that strengthened the PDA's role as manager was thrown into doubt when, on Nov. 28, the Urban Group filed for Chapter 11 reorganization in federal bankruptcy court. The move stalls all legal proceedings against the Urban Group and could transfer asset questions to a New York court.

``The plot has thickened,'' says Jack Cullen, a bankruptcy expert. A New York judge could impose a set of rules that would make it more likely the market would turn a profit, he says.

Meanwhile, a separate city audit of market business showed that if rents desired by the Urban Group were implemented, 70 percent of the merchants would be out of business.

``If someone tries to make a profit off this market, we'll become just another big-city mall,'' says Don Kuzaro, president of the market's merchant association.

Shelly Yapp, executive director of the PDA, says the historic guidelines that govern the market embrace the principle of owner-operated, so-called ``incubator'' businesses that cater to low- and moderate-income people.

``We do not believe it is possible to operate at a profit and stay within the historic guidelines,'' says Ms. Yapp.

For its part, the Urban Group has taken out full-page ads embracing the historical integrity of the market and renewing commitments to its success. But the group's lawyers aren't talking.