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Saturday, September 30, 2000 - Page updated at 12:00 AM

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Buildt for good

Seattle Times staff reporter

-- SINCE IT was created by a hodgepodge of do-gooders in 1980, nonprofit agency Common Ground has helped build or saved 3,000 low-income housing units in the Seattle area

If Steve Clagett and his colleagues had loosed their considerable talent on the private sector, they might have become millionaires and changed the face of Seattle.

Instead, they became do-gooders - and changed the face of Seattle anyway.

In 1980, Clagett and a handful of far-sighted companions started Common Ground, a nonprofit real-estate consulting firm that has helped build or save some 3,000 units of low-income housing in the Seattle area.

"Get someone into a home, and change happens in their life," said Clagett. "That's been our philosophy from the start."

Common Ground, which is celebrating its 20 anniversary, is the reason many downtown Seattle landmarks - the Olive Tower, the St. Regis Hotel, the Josephinum - are still standing, and still the homes of working people, rather than glass-and-steel towers with latte stands in the lobby.

The non-profit is also the reason homeless men can take a shower in Pioneer Square, battered women can find a place to stay in Redmond, developmentally disabled adults can blend quietly into neighborhoods like Green Lake or View Ridge, and Asian immigrants can find an affordable apartment in Issaquah.

Common Ground doesn't own, run or manage any of these places. Instead, like any other real-estate developer, it puts together land deals, arranges financing and supervises construction for clients, such as El Centro de la Raza, the Metro YMCA or Pioneer Human Services.

When the project is done, the client gets the keys, and Common Ground moves on.

A recent example is Compass Women's Center in Belltown, a mixed-use residential-office building with temporary shelter for 32 single homeless women and two women with families. It's run by Compass Center, a nonprofit serving homeless people. But Common Ground helped the agency find the land - a former church parking lot - put together $3 million in financing, and supervised construction.

"We are good program managers, but we're not financial planners or real-estate developers," said Rick Friedhoff, executive director of Compass Center. "Common Ground figured out how to obtain financing at very favorable terms."

Common Ground developer Martin Thometz laughed as he recalled his instructions from Friedhoff: "I don't care how you do it, but keep me out of jail."

Using some unusual methods, Thometz and underwriter Keybank put together a package in which half the financing came from little-known federal tax credits.

"Homeless shelters are notoriously hard to finance, because they don't fit in any of the standard molds," Thometz said. "We had to do an awful lot of convincing."

Now, because Compass Center isn't saddled with a huge debt for the building, said Friedhoff, "we can spend our funding on what we do best - taking care of our clients."

In 1980, Steve Clagett was a 30-year-old county planner who had become disillusioned with the for-profit developers who were building most of the county's low-income housing. Clagett thought nonprofits could do a better job - but few nonprofits knew anything about property development.

"There needed to be a single source for that expertise, so that these groups didn't have to reinvent the wheel," said Clagett, who now runs his own consulting business.

A nonprofit develops

Common Ground was born at a meeting in the back room of a Pioneer Square restaurant, with the Church Council of Greater Seattle and the Metropolitan Center Branch of the YMCA as midwives. Clagett's early staff included a hodgepodge of people with varied backgrounds, not all of them in housing. One worker, Rebecca Solomon, had a bachelor's degree in Scandinavian studies.

It also included Claire Demler, a fiesty 57-year-old former apartment house manager who immediately threw herself into the battle to save downtown single-room occupancy hotels, called SROs, for low-income housing. In the '80s, with the downtown building boom well under way, the number of affordable apartment and hotel rooms in downtown Seattle had shrunk from 3,500 to fewer than 1,700.

"There were so many service workers living downtown, waitresses earning $2.10 an hour, people on disability, retirees. They were being forced out," said Demler.

The trick was to beat the commercial developers - or the city fire marshal - to the threatened buildings, mostly older low-rises on prime downtown lots.

`We would find an owner willing to sell, and then we'd try to put together a financial package so he'd get to walk away with the same price he'd get from a developer," Demler recalled.

To save one debt-ridden building, Demler and her husband moved in and took over as managers for a time, changing lightbulbs and sweeping the stairwells.

"It was the only way the lenders would agree to hold off foreclosure," she said.

In another case, a 158-unit apartment building was set for conversion to pricy condominiums. The owner was willing to sell, but he wanted $5.5 million.

"We didn't have anywhere near that much," recalls Clagett. "But we discovered that if we ran the sale through the Seattle Housing Authority, the income to the owner would be tax-exempt. That allowed him to lower the price to $3.5 million, and we raised the money."

Demler took on the Fire Department at one point, persuading the city council to delay a strict new fire code that would have doomed many downtown hotels. The city finally amended the code and made money available for sprinklers and other safety features to landlords who agreed to install them.

Filling a community void

Common Ground worked closely with the churches in the early years, and through them Clegett learned of a need that would become one of the agency's primary goals - housing the mentally ill.

"Those were the Reagan years, and a lot of the mentally ill were being `de-institutionalized' - literally dumped on the street. There were community mental health centers, but the treatments weren't doing much good because so many clients had no stable homes."

Common Ground began putting together partnerships between mental health agencies and area churches. The churches rented houses for use as group homes; the agencies provided staff and oversight. There were about 20 such group homes before rents got so high that buying houses became the smarter option.

The experience led Common Ground into a whole new area - special-needs housing - that is now one of its specialties.

"We didn't intend in the beginning to mix housing and social work," said Clagett, "but there was this great need. There were the developmentally disabled, people with drug abuse problems, teenage youth needing transitional housing. . ."

In the first 13 years, Common Ground did 110 projects with 83 nonprofit groups, churches or government agencies. By this year, it had helped create almost 3,000 housing units for 300 clients.

"Our mission and our goals remain much the same as in 1980," said Lynn Davison, the current executive director. "But many things have changed. Land is more expensive. There aren't very many of those great old buildings left to rehab. And projects have greatly increased in complexity.

"A simple project may have four to five financing sources; a complex one will have ten to twelve. Now we have to have experts in federal tax credits, bonds, all sorts of esoteric financing we never thought of before."

As it has grown, Common Ground has expanded its focus from Seattle to the rest of the state. The nonprofit is currently working on a senior housing project in Raymond, housing for migrant workers in Moses Lake, and a shelter for battered women in Mason County, among others.

In Seattle, there is a 90-unit mixed low and medium-income project underway on Capitol Hill for the Seattle Speech and Hearing Center, a transitional shelter for homeless veterans for Compass Center, and several others in the planning stages.

"There's plenty of work to do," said Davison.

Most have moved on

Of the original staff members, several remain, including Rebecca Solomon, the student of Scandinavia, now a seasoned property-finance expert. Solomon helped build Rosehedge, the city's first residence for people with AIDS, and later served as president of its board.

Claire Demler is retired and living in a trailer park in McAllen, Tex.

After 13 years, Steve Claggett went to work for 1,000 Friends of Washington, a growth management advocacy group, and later founded his own consulting firm, Front Step Development. Recently, he contributed a chapter to a book called "Building an Urban Center," published by the Puget Sound Regional Council.

His new crusade, he said, is finding a way to implement the state's Growth Management Act "so we don't screw it up."

He chuckles when reminded of his missed opportunity to become a real-estate baron.

"Yeah, well, I've been a do-gooder all my life. I was even in the Peace Corps. That's my bane, I guess. But it's worked for me."

Copyright (c) 2000 Seattle Times Company, All Rights Reserved.

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