Realtor sues to block sale of 550 MadisonCraig Clark claims breach of contract by the seller.

"Claiming that he still has a valid purchase contract, local realtor Craig Clark has sued to block the county housing authority's purchase of the 550 Madison apartment building.Named as defendants are Vicki Holmstrom of Kingston and her husband, the building's sellers.I want to be reasonable and fair, but someone has to acknowledge the very real time and money I spent in going after something like this, Clark said Friday. "

  • Saturday, December 30, 2000 4:00pm
  • News

“Claiming that he still has a valid purchase contract, local realtor Craig Clark has sued to block the county housing authority’s purchase of the 550 Madison apartment building.Named as defendants are Vicki Holmstrom of Kingston and her husband, the building’s sellers.I want to be reasonable and fair, but someone has to acknowledge the very real time and money I spent in going after something like this, Clark said Friday.Clark is a real estate broker with Johansson-Clark on Winslow Way. Under a contract provided to the Review this week, Clark, his wife Celia and partner Jon Thompson had agreed to pay Holmstrom $800,000 for the 13-unit building on the east side of Madison Avenue in downtown Winslow. The contract gave the buyers 60 days to arrange financing. According to various sources, the 60 days lapsed without any written confirmation from Clark to Holmstrom that financing had been arranged. Holmstrom then rescinded the Clark contract. Instead, she agreed to sell the apartment to the Kitsap County Consolidated Housing Authority, which had made a back-up offer of $825,000.In the lawsuit, filed Dec. 18 in Kitsap County Superior Court, Clark says that he gave Holmstrom’s real estate agent verbal notice that he had gotten financing, and was not required to give written notice. Because Clark had done what the contract required of him, he maintains, Holmstrom’s decision to sell to the housing authority was a breach.Clark’s suit asks the court either to require Holmstrom to sell the property to him for $800,000, or to award him monetary damages – his out-of-pocket costs plus loss of profits he claims he could have made on the deal, including his own real-estate commission. No dollar amount of damages is specified in the complaint.I had about $10,000 in actual costs, Clark told the Review Friday. There was a commercial appraisal, which is much more expensive than a residential appraisal, a hazardous-material inspection and a structural inspection.But Holmstrom’s real estate agent, Patrick Boyle of Reid Real Estate, said this week that Clark did not carry out his contractual obligations.He did not confirm to us that he had obtained the financing, Boyle said.Moreover, Boyle said, there was no verbal notification that financing had been obtained.On the day he says he told us, we all met the appraiser at the property, Boyle said. When the appraiser is just starting, that tells me you don’t have your financing yet.Housing bidHousing authority officials this week said they intend to move ahead on the purchase, which was announced Dec. 12.But while the agency is not named as a party to the lawsuit, KCCHA officials and Boyle agree that it is unlikely any purchase can close until Clark’s suit is settled.The apartment tenants, many of whom have modest incomes, were initially concerned about purchase of the property by a private party, because they feared they would see substantial rent increases.While acknowledging that Holmstrom, who is in her late 60s, had kept rents artificially low for many years as Christian charity, the tenants said they could not afford any sudden increases, and feared they would have to leave their apartments.After reading a story in the Review about the building’s imminent sale, Mayor Dwight Sutton contacted the KCCHA and asked if it could help. The agency submitted a back-up offer to Holmstrom, which she accepted after making the now-disputed determination that Clark had failed.Under its ownership, KCCHA would set rents according to tenant income.Purchase of the property would be financed by the sale of bonds to private investors, with rent subsidies coming from a variety of state and local sources and the agency’s own revenues. The housing authority also owns and operates the Rhododendron Apartments on Bainbridge Island.Although Clark acknowledges that he would not operate the apartments at a loss, he said the tenants would not necessarily fare worse under his ownership.Would I have emptied out the apartments, done major renovations and raised the rent all at once? No, he said. I can’t afford to do that – lose all rent for that length of time. The rents would have risen, but over a few years.Clark also questioned whether the affordable-housing shortage on the island is as acute as sometimes pictured.I have apartments being advertised right now in the Review for $550 a month, and I’m not getting any takers, he said. “

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