Lawsuit Alleges City Misused Housing Funds

SEATTLE - Seattle City Council candidate Jordan Brower is suing the city of Seattle for allegedly misusing $24 million in federal housing money to help private developers turn the old Frederick & Nelson building into the Nordstrom flagship store.

Brower's suit, filed yesterday in King County Superior Court, claims the city violated the state Constitution by applying for HUD loan guarantees that will be used as a basis for a loan to the project developers. The Seattle Displacement Coalition is also a plaintiff in the suit.

HUD rules prohibit such guarantees from enriching for-profit recipients, and the state Constitution says municipal bodies may not loan their money or credit to private interests unless it is to help the poor or infirm, according to the lawsuit.

But Jack Johnson, chief civil lawyer in the city attorney's office, said the city received authority from state legislators in 1995 to enter into such arrangements. And there's no city money involved, only federal funds specifically earmarked for such projects, so there's no violation of the state Constitution, he

added.