The dispute between nine homeowners, Puget Sound Energy and the City of Kirkland over the Juanita substation has turned from a battle of words into a lawsuit.
The substation was built in 2009 and the homeowners filed suit against PSE for trespass and nuisance in King County Superior Court last September. The residents added the city in the multi-million dollar lawsuit in March.
“The approval, construction and operation of the PSE substation has caused a catastrophic devaluation of (my clients’) properties,” said the neighbor’s attorney, Paul Brain, in an e-mail to the Reporter.
As a result, the homeowners are seeking damages for the property devaluation, which could add up to more than $2.7 million, said Brain.
The issues with the substation began four years ago when PSE proposed the new power substation to replace an older substation that was built in 1960. The project would allow PSE to supply more power to Kirkland and the annexation neighborhoods of Kingsgate, Juanita and Finn Hill.
The neighbors protested the plan from the onset, claiming the substation and 23-foot wall behind their backyards would devalue their property.
Now, they have the documentation to show just how much their homes are currently worth.
At the neighbor’s request, the King County Board of Equalization (BOE) took a look at the properties that border the substation at 10910 N.E. 132nd Street. The board determined last December that the nine homes have dropped by a combined $1.4 million from 2008-2010 – or an average of 50 percent.
However, Brain believes the loss is even greater than $1.4 million, “on the order of $2.7-million plus, and feel that a jury of our peers will concur.”
The difference between the assessments of damage is that the neighbors feel they will be unable to ever sell their homes.
“The King County Board of Equalization found the diminution in value was directly due to the approval, construction, and operation of the PSE substation and was stated as such in their response,” said Brain, about the independent body appointed to adjudicate appeals of decisions made by the Department of Assessments. The board is comprised of seven citizen members appointed by the King County Executive and confirmed by the King County Council.
According to Zillow.com, the average price for a home in the North Juanita neighborhood in 2008 was $369,000 and in 2010 it was $294,000. The average price for one of the houses bordering the substation is now assessed at $170,000.
“The diminution in value was determined by the board after the assessors’ office took into account any decrease or increase in value due to general market conditions,” said Brain. “Thus the decrease in value that the board reported was directly due to the approval, construction, and operation of the PSE substation.”
The neighbors are suing the city for inverse condemnation.
Brain describes the action as a taking of one’s property, in this case for the benefit of a private corporation, PSE.
“The city also directly ignored their own ordinances for granting a variance,” he said of when the city granted PSE’s request to reduce the required setbacks, landscape buffers and to extend height restrictions before the substation was built in 2009.
Brain points to conflicting comments made by council members during hearings before the city granted the variance, and says city staff also ignored variance codes.
“The city disagrees that the granting of that variance constitutes an inverse condemnation or a taking of their property,” said Oscar Rey, assistant city attorney.
Rey also noted that the plaintiffs could have appealed the variance in King County Superior Court.
“If they really had an issue with the variance, they should have brought the appeal at that time,” said Rey.
However, one of the affected neighbors, Michael Heslop, said their then-attorney advised them that an appeal would cost them more than $100,000 and that “PSE would fight us every step of the way, driving costs beyond what any of us could afford.”
Robin Jenkinson, city attorney, said the plaintiff’s failure to challenge the variance “bars any inverse condemnation or takings claim they may seek to bring against the city.”
Rey said that the city is trying to minimize litigation expenses and shouldn’t incur any costs for attorney fees since he is representing the city in the lawsuit. Rey will seek dismissal of the claims against the city during a hearing on June 24.
Issues with PSE
From the onset, neighbors have also feared the electromagnetic fields (EMF) that surround the substation pose a potential health risk.
The group claims that EMF were both a nuisance and a trespass in part because the EMF were “the basis for a reasonable apprehension of harm from exposure,” according to court documents.
PSE spokesperson Gretchen Aliabadi said the company does not comment on active litigation.
According to court records, PSE argues that a trespass cannot be found unless the intrusion results in physical damage to the property.
In addition to the lawsuit, the neighbors are also seeking damages from PSE for the substation’s construction that the group claims damaged their property in 2009.
Despite initial denials of the allegation, PSE eventually was forced to admit the damage and moved forward to settle the matter.
“We have yet to receive payment from PSE regarding the physical damages to (my clients’) homes,” said Brain, adding that PSE owes more than $65,000 for damages on seven of the nine homes.
The damage to the homes were for such things as cracked foundations, chimneys, driveways, ceiling, walls and uneven floors due to intense vibrations from construction equipment. Once the lawsuit started PSE would no longer communicate with the neighbors directly and required that any communication be with PSE’s lawyers regarding payment, said Brain.
“(We have) been in contact with PSE’s lawyers multiple times and we have yet to receive payment for the physical damages they acknowledged they caused and agreed to pay,” said Brain.
Editor Carrie Wood contributed to this report.
