Dark Financial Cloud Above Burien Lifted With Westmark Settlement
A dark financial cloud that cast a long shadow over Burien’s plans for its future disappeared when City Council members gave unanimous approval Monday night (July 19) to a negotiated insurance settlement.
The lawmakers accepted an agreement with the Washington Cities Insurance Authority (WCIA) that favorably resolves for the city issues of outstanding insurance coverage in the long-running Westmark v. Burien case.
“No longer will we have millions of dollars of liability staring us in the face,” City Manager Mike Martin told the B-Town Blog.
Westmark Development has had plans to build Emerald Pointe on the Sound – a controversial housing development with up to 200 market-rate condominiums at 13401 12th Ave. S.W. – for 20 years.
But the project, opposed by residents of the Seahurst area who have voiced environmental concerns, has been on hold since the city incorporated in 1993 and took over permitting from King County.
Westmark eventually filed suit against Burien for intentionally interfering with its “business expectations.” In 2007, the state Court of Appeals upheld a $10.7 million judgment against the city, plus interest and other expenses.
While the WCIA paid most of the Westmark award, “Burien paid an additional $510,341.77 to satisfy the Westmark I judgment,” according to the claims settlement agreement.
The city later paid additional “substantial attorneys fees and defense costs” in two subsequent suits related to this case.
City Attorney Craig Knutson said under the agreement, which holds Burien harmless, the WCIA will:
- Reimburse the city for the $510,341.77.
- Reimburse the city for approximately $60,000 it has already paid in the current round of litigation with Westmark.
- Accept responsibility for coverage of the city’s ongoing liability for Westmark’s attorney fees and other defense costs in this suit.
“The agreement with the WCIA resolves insurance coverage issues so the city will not incur any financial liability on what has been incurred to date or will be incurred in the future,” Knutson noted.
“In essence,” Martin said, “the city has come out unscathed after all these years. This is significant because [the liability] has had such immense financial consequences that it clouded our ability to plan for the future.”
When considering city programs and projects, “I always had to ask myself, ‘what happens if we are held liable for part or all of this?’” he added. “This agreement takes away that cloud. This is absolutely the tail of the dog.”
The reimbursements will go “back into the general fund where it come from.”
Knutson said the settlement is the result “of ongoing negotiations and analysis of insurance coverage issues complicated by the fact that the coverage was over so many years.”
As for Westmark’s proposed condo project, “it is alive in the sense that it’s still buildable. But no permits have been issued yet,” Martin said.
While project plans have been revised, “it’s still a major multi-family complex but with major modifications … it’s something that can still be built.”
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