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Originally published Thursday, October 4, 2012 at 9:01 PM

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City intervenes in troubled Seattle Indian Service Commission

The Seattle Indian Services Commission was formed in 1972 to provide support to urban Indians. With city-backed bonds, it built two buildings...

Seattle Times staff reporter

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The fact is, the King County Tax Assessor has valued these properties at OVER 18... MORE
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The Seattle Indian Services Commission was formed in 1972 to provide support to urban Indians. With city-backed bonds, it built two buildings on the edge of the Chinatown International District and rented out space to nonprofits that provide health care, hot meals, a food bank and a homeless shelter to Native American and low-income people.

But a scathing state audit last year found more than $73,000 in questionable expenses by commission staff, a dysfunctional board of directors that "provided no direction or oversight," and one of the two buildings badly water-damaged.

The audit noted the commission didn't have the money to make an estimated $2.5 million in repairs.

But proposals to address the commission's problems have produced accusations of a land grab by the city for the buildings, with an assessed value of $18 million.

And it has led to a standoff among the three Indian organizations that occupy the buildings over who should control the assets and make the repairs.

This week, the Seattle City Council authorized Mayor Mike McGinn to intervene in the commission's affairs.

The mayor removed four members from the commission's deadlocked, eight-member board and appointed as temporary Chairman Fred Podesta, director of the city's Finance and Administrative Services.

The commission rents space to the Seattle Indian Center and the Indian Health Board, although the center owes $75,000 in back rent, according to the state auditor. The commission's board is made up of two representatives from each of those organizations plus two each from the American Indian Women's Services Board and the United Indians of All Tribes Foundation.

Advocates for the commission and the Seattle Indian Center denounced the city's intervention and what they worry is the potential transfer of the buildings' titles to the Indian Health Board.

As a private nonprofit, the Indian Health Board wouldn't be bound by the commission's covenants to serve needy Indians, say opponents. And they fear the Health Board could sell the properties to developers.

"A huge amount of public property could be transferred to private hands, and the private nonprofit doesn't have to continue the good work of the Indian Center," said Elena Garella, that group's attorney.

But city officials say the Indian Health Board, a medical clinic that served about 7,200 people in 2011, is the only financially sound tenant. With the city on the hook for the outstanding $6 million in bond payments, and both the commission and the Indian Center in financially precarious positions, officials say, a Health Board takeover is the best option to preserve the services and the buildings.

"The other groups seem to want to discount the Health Board as an Indian organization. They are a Native-American organization serving the Indian community," said Kenny Pittman, senior policy adviser with the city Office of Intergovernmental Relations who oversees public-development authorities.

An attorney for the Health Board said it has no interest in selling to a developer.

"We are the only paying tenant. We stand ready to move forward to fix the buildings and preserve the health care and other services for the Indian community," said John Hemplemann.

Long history

The Indian Services Commission was the first Public Development Association chartered by the city. Over the years, it has provided summer programs to Native children, computer training and funeral assistance, and operated a crafts and gift shop.

Today, the commission has no paid staff and does no independent programming, according to the city. The 2011 audit report said it hadn't completed required financial statements for three years, and it hadn't set rents high enough to pay for building maintenance and repairs.

The commission's governing board consisted of eight members, including the two tenants, the Indian Center and the Health Board, which the auditor said created a conflict of interest because they had to vote on their own rents. For the past two years, because of the even number of voting members, the board has been deadlocked on how to resolve the commission's problems and address the water damage. Nearly eight months of mediation also resulted in a series of tied commission votes.

A year ago, the City Council directed City Attorney Pete Holmes to petition King County Superior Court to appoint a trustee to oversee the commission and to transfer its two buildings to the Indian Health Board "to preserve the assets for the community served."

The commission and the Indian Center sued to block the trusteeship, arguing that the plan would transfer all of the commission's property to the Health Board for free and to the detriment of the commission and the center.

Holmes withdrew the petition. Other city officials said the resulting litigation could have taken several years while the problems remained unresolved.

"The city's goal is to address the current problems and to ensure that human and health services continue to be provided to Seattle's American Indian/Alaskan Native communities. The city determined that an intervention better met its goals," Holmes said in an email this week.

The Indian Center's attorney, Garella, said the Health Board has not been open to any resolution of the commission's problems "other than a transfer of all the property and equity to the health board."

She said the center would continue to fight any attempt to transfer title of the buildings.

Andrina Abada, chairwoman of the Indian Services Commission, said the commission repeatedly tried to compromise with the health board, agreeing to transfer the titles in exchange for some money to continue the commission's mission and operations.

She said the commission also proposed retaining just a third of the second building, the Leschi Center, occupied by the Indian Center. Again, she said, the health board refused.

"They said no to everything. They've treated us shabbily," said Abada.

Building damage

Ralph Forquera, executive director of the Indian Health Board, said the water-damaged building is worth far less than its current assessment. He said his organization can't take on the cost and liability for repairs without also gaining its assets.

State Sen. Maralyn Chase, D-Shoreline, who has served on the board of the Indian Center for about 10 years, said the rezones earlier this year of Yesler Terrace and the Chinatown International District, could make the commission's buildings even more valuable.

Despite the commission's troubled management and oversight, she noted it had never failed to make its bond payment.

"We care about the well being of urban Indians. We want to hold on to our land."

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com. On Twitter @lthompsontimes.

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