The Olympic Athletic Club (OAC) is making moves that members of the Salmon Bay Aerie of the Fraternal Order of Eagles (F.O.E.) are calling “shady.”

The Eagles were founded in 1898 here in Seattle and have been accredited with establishing Mother’s Day and Social Security. With such historic and social prominence it’s not surprising that some Eagle’s members and Ballard residents have started asking questions as a developer and Eagle’s member appear to be using the 83-year-old fraternity’s own democratic method for their own personal gain.

In March of 2015 Jim Riggle, owner of the Ballard Hotel and the Olympic Athletic Club, offered the Salmon Bay Aerie of the Fraternal Order of Eagles $2.4 million for their commercial property. The Eagles have owned the property (5244 Leary Ave. N.W.) next to their aeries since the 1970s, and they currently lease it to Elite Auto Care Inc.

The Eagles responded to the offer by forming a real estate committee comprised of eight members, one of which was a commercial broker. They unanimously gave the recommendation to not sell the property and the offer did not make it to the floor to vote. They issued a letter to members. They concluded that there was no reason to sell and that if they ever do intend to sell they would list it on the open market instead of accepting unsolicited offers. Three current trustees were on that committee.

Incidentally, Riggle and at least one of his associates, Mark Durall, are members of the Eagles. Durall is the general manager of the OAC. The two have been members since around 2008.

After the real estate committee recommended against the sale, there was a push from OAC affiliates to bring the decision up for a vote by all the members. A new committee of three trustees was formed in order to make a report. Later, six trustees voted 5-1 in favor of bringing the decision to sell to a membership vote.

Meanwhile, to drum up support to sell, a flyer was recently posted and distributed to members in workout classes at the OAC asking members to join the Eagles and vote in favor of the sale. The flyer states that the sale would help fix the parking problem in Ballard by building a 400 space parking structure. As an added inducement, OAC offered to pay the $36 dues to become Eagles members and even offered members a catered party before initiation and after the vote.

Eagles Worthy Chaplin, Andy Larson, said that Riggle’s push to buy Eagle memberships is “questionable.” He hadn’t heard about the move by the OAC until it was reported in a recent Seattle Times article.

“I hadn’t seen that (flyer) until it came out in the Times, and it was really disappointing because it betrays the values of the Eagles,” said Larson.

Riggle’s Roots with Eagles

The 2015 proposal wasn’t the first time Riggle tried to coax the Eagles into a sale. In 2007 (around the same time Riggle joined the Eagles) Riggle proposed to buy the property after stating that the property, once a gas station with underground tanks, was polluting the OAC property through the ground water. Riggle’s solution was to buy the property and take on the responsibility of cleaning it up.

The proposal states: “Of course, the usual reaction in this kind of situation is to start making threats about lawsuits, but that is not the path that Jim wants to take.”

The Eagles turned down the offer. However in doing so they had to determine the extent of the contamination and accrued over $105,000 in legal and environmental investigation expenses. The Eagles looked to Union Oil (a subsidiary of Chevron), the previous owner of the site, to recoup their losses. Chevron agreed to reimburse the Eagles for certain past and future costs related to the contamination, and also indemnified the Eagles against claims arising from the contamination. They reimbursed the Eagles $77,030.27. Chevron also agreed to reimburse the cost of any future environmental remediation of the site should the Eagles develop or sell the property. This reimbursement would also transfer to a new owner, but does not include the cost to demolish the surface structure and concrete at the site.

The Riggle group indicated in their 2007 proposal that contaminants from the Eagles site were leaking under the road to the OAC site and were a “significant source of contamination found at the Olympic property.”

“…petroleum products or waste have been released from your property, into the soil, and then into the groundwater that flows to and under the athletic club.”

The 2011 assessment done for the Eagles determined that contaminants were indeed in the soil and ground water. However, it states that the leaking contaminants having an impact the Olympic Athletic Club site is “unlikely,” based on the “concentration and distribution, distance, and anticipated direction of ground water migration.”

It also states that the State Department of Ecology appears to share this opinion because they list the Eagles property as a separate site and not part of a larger contamination site that encompasses the OAC. Their report states that the OAC site once was occupied by a gasoline station with known fuel releases and has been actively investigated for contaminants since 1993.

Contaminated round water carries the contention between the Eagles and OAC.

Riggle explained to the BNT that there were tanks on the OAC site, and they were removed, but the contaminated soil is still there. He also said the Eagle’s assessment is inaccurate because the company that conducted it mislabeled the location of the OAC. Riggle said that since then they have rectified the mislabeling.

However, the mislabeling Riggle mentioned is limited to a map used in the report. The map depicts OAC one block down from its correct location on Leary Avenue N.W.

The topography shows the flow of groundwater moving southwest along 20th Avenue N.W. at the Eagles building then breaking sharply to move south along Leary Avenue N.W. right at the intersection where the correct location of the OAC resides.

Riggle contends that he has his own assessment that proves the Eagles site is leaking contaminants onto the OAC site. However, he did not share that assessment with the Ballard News-Tribune.

The supposed “misinformation” presented by Riggle is not the only thing alarming members. In recent activity, members claim that the OAC group have given incentives like hotel stays, dinners at the Ballard Hotel and free OAC memberships to trustees in order to woo them into favoring the property purchase.

Sources report that at least one current Officer who is also a Past Worthy President (honorary trustee) stayed at the hotel to celebrate New Years Eve. That member denied the allegation but said that his girlfriend stayed there that night. He said he did not know if she paid for the room.

In addition, some Eagles members speculate that trustees had already been negotiating a purchase agreement with Riggle before the decision to come to a member-vote was even decided. They cite the Trustee Real Estate Committee Report and the addendum to purchase and sale agreement that is dated Nov. 24. The report was not presented to members until earlier this month after the vote to sell decision had passed on Dec. 16. The report was submitted Dec. 2, and favors the sale of the property. The addendum for purchase and sale agreement was presented to trustees and signed by Riggle on Dec. 8.

In addition, in the Addendum to Purchase and Sale Agreement the buyer agrees to allow Eagles members to park in the future parking garage at $1 an hour, the same cost as OAC members who do not use the club.

One trustee is skeptical of the agreement and believes that the OAC might double back on that agreement, siting the OAC lifetime membership controversy from 2011 when the OAC changed ownership and tried to cancel the contracts of lifetime members. Those OAC members filed a civil lawsuit against the OAC and their contracts were honored.

In addition, the move to get the vote to sell passed is viewed by many members as “shady.” Eagle members report that the night of the Dec. 16 meeting, Riggle showed up with Durall along with 50 new members who were affiliated with the OAC. They were there to vote in favor of the sale. Members allege the OAC group front-loaded the vote in order for it to pass.

“I think it goes against the spirit of the Eagles and how voting and democracy are supposed to work. … Riggle and Durall are members of the Eagles but you can see where their loyalty falls pretty quickly.”

“Riggle can’t understand why we would be against a deal that looks good on paper, but it’s not really the deal, it's how it’s come about,” said James Forgette, Worthy President of the Eagles. “I don’t like being bullied, and I don’t like the way the Eagle’s membership is being bought.”

Riggle himself has his own opinion about underlying motives shaping the decision of potential sale. James Forgette is operations manager of the Ballard Terminal Railroad, a company that Riggle says is in opposition to the completion of the Burke Gilman Trail.

“He (Forgette)…is on record many times and at many venues as opposing the missing link. Loss of parking is one of the anti-missing link group’s reasons for not locating the bike trail on Shilshole,” wrote Riggle.

Forgette disagrees.

“That’s just ridiculous. He’s really grabbing at straws,” said Forgette.

Riggle was asked if saying such things about another Eagle member breaks the oath Eagles take not to speak ill about other members.

“These are facts, not ill speaking. He's welcome to his beliefs,” said Riggle.

In addition, Riggle says that he is not the only one recruiting Eagles members. He said that he did recruit members before the Dec. 16 vote, but he did so in order to help the Eagle’s revenue and denies it was to influence the vote. He contends he never told new members which way to vote. However, Riggle said on Jan. 6 a member of a different Eagles Aerie conducted and coordinated an unauthorized membership drive, recruiting members to oppose the sale. He cites a Facebook post that he says is “misleading” because it calls his offer “low-ball” and that it misinforms readers by stating that the sale of the rental property would mean a loss of income for the Eagles.

A flyer was recently posted and distributed to members in workout classes at the OAC and asking members to join the Eagles and vote in favor of the sale. The flyer states that the sale would help fix the parking problem in Ballard by building a 400 unit parking structure. They offered to pay the Eagles $36 dues.

“…James Forgette’s complaints about OAC recruiting new members are completely hypocritical, since he and his friends have been recruiting new members themselves. The only difference between the two is that OAC recruited new members based upon the facts about the sale and James Forgette’s real estate friends… have attempted to influence people by misrepresenting the facts.”

However, Riggle said he did start aggressively recruiting after he realized there was recruiting for the opposition of the sale.

About the sale itself, Riggle said,“We don’t think there is anything wrong with that. It represents a win for the Eagles, a win for OAC, and a win for the community.”

The Fraternity’s Financial Faults

Another element that some Eagles members are concerned about is that a recent trustee letter (posted on the website and in the aerie) argues that there is more financial gain for the club to sell compared to holding on to the property.

The letter states that the sale and investment in bonds would generate more revenue with less liability and expenses for the Eagles. They site an investment property summary – provided to the Eagles trustees by the Riggle group – which compares the Eagle’s income of selling to not selling. It states that investing the assets from the sale in a bond portfolio with a 3.5 percent target yield would be more financially viable for the Eagles than continuing to rent the property. One Eagles member argues that the summary does not take into account the broker's fee.

Also, the real estate report presents the values and appreciation of the property dating back to 2013, but it does not include the historic appreciation of the property, which has averaged around two to three percent annually since the Eagles purchased it for $125,000 in 1973. The appreciation combined with the estimated $45,000 (listed as the net income after property taxes and insurance premiums) they receive annually for leasing the property, would be an approximate $72,000 in revenue. The report compares that figure to a $70,000 return of investment from selling and investing, however the risk and volatility of investing is not taken into account. Members argue that those details need to be considered for an honest look at any sale.

“If it sells there’s no way of going back. … To go through all this and sell just to make less than if we don’t sell doesn’t make sense,” said Larson.

Eagles members who sat on the original Real Estate Committee report that what’s not said are the other options they have. They point out that they could put the property on the open market and let investors compete, which should yield a higher sale price. Still, they also say that Riggle’s $2.4 million offer is not unreasonable. In fact, Barry Hawley, a commercial real estate broker in Ballard, appraised the property at $1.6 million to $1.9 million if it wasn’t polluted. However, one member pointed out that the Eagles club building itself is valued around $4 to $6 million and that they could take a short loan out on the club building, make the environmental remediation (estimated to cost $500,000) and pay the note back with the reimbursement from Chevron. Then they could develop or sell the property without the constraints of the remediation. The major factor in this route would be if the bar – which charges $4 for a microbrewery beer – and the Eagles renting their space for special events generates high enough revenue to carry the note.

Recently, with all the discussion of finances, members have asked trustees to provide a profit and loss report to determine if the sale would actually help the Eagle’s financial situation.

So why are so many members worried about a property sale that on paper appears to look pretty good?

A few years ago the Salmon Bay Eagles lost their charter because their finances were in disarray after their long time Secretary Donnie Anderson – who opposed the sale – passed away. In April of 2014 Andy Kollar was sent to Ballard by the Grand Aerie to help put things back in order. Members say that since his tender he has done very little to change their situation. The also say that Kollar favors the sale of the property and report that he has indicated that the Eagles charter is “in his back pocket” and that its return hinges on the sale of the property. By order of the Grand Aerie, Kollar has the authority to supersede the will of members, trustees and President Forgette.

According to a new member of the Eagles who was initiated Jan. 21 (who asked to not be named) there was a motion to indefinitely suspend the Feb. 6 vote to sell until the Eagles could assign an attorney to oversee the proposed land purchase. The room was packed with at least 30 new voters and many old members who opposed the sale. Kollar quashed the motion despite members’ assurance from the Grand Aerie that it was a legitimate move. Kollar's reason? Because so many new members were in favor of suspending the vote and that his decision supersedes the members. Members pointed out that the same thing had happened during the Dec. 16 meeting that worked out in Riggle’s favor.

Similarly, the reason to override the original Real Estate Committee’s decision was that they had not explored all options and did not seek professional input, even though a commercial broker sat on the committee. Who made the call? Koehler. Sources say Kollar oversaw the committee’s actions and coached them on their process, only to later reject their decision and leave it to three trustees. Members were allowed to attend some of these meetings, and sources say Durall was at every one of them.

Despite contention of the sale, Larson, Forgette and other members are pleased with the influx of new members. Membership just tipped the 500 mark, which is a sharp spike not seen since the 1970s. During the last meeting after the Times broke the story, the Eagles bar bustled with bodies, something members say is uncommon for a Wednesday night. However, Larson is skeptical that members from OAC and others will continue to be active Eagles after and if any deal goes down.

“Most folks don’t necessarily view or expect them to be enduring members who are going to participate beyond their immediate assignment of being ready to come over for votes when asked or told by OAC.”

Indeed, in the Eagle’s democracy membership and votes are key, and according to the Grand Aerie, Riggle’s actions have not broken any rules. Members in opposition of the sale say that if they want to stop Riggle, come Feb. 6, they will need to recruit enough members to vote it down. Ultimately the final say is up to the Grand Aerie, who one member reported, has never turned down the sale of a property that has come from a vote.