A Milton-based construction firm has put the act of property foreclosure into motion with Tacoma’s Graffiti Garages.
The property, 716 to 728 Commerce St., is set to be sold at a sheriff’s sale in Pierce County at 10 a.m. Oct. 10 at the County-City Building. The proceeds are to collect on debt owed to Oak Hills Construction for work at the site.
The News Tribune reported earlier this year that Graffiti Garages had received a notice of abandonment designation as part of the bankruptcy of the owner LLC’s parent company, Bellevue-based iCap.
The derelict Tacoma property was among those used by iCap in what later was determined to be a Ponzi scheme, according to a ruling in U.S. Bankruptcy Court for the Eastern District of Washington. One creditor’s lawsuit noted that the property had been used by 725 Broadway LLC to secure a loan that eventually exceeded the property’s value.
The site is assessed at just under $2 million, Pierce County records show, with a 2-year cumulative property tax debt of nearly $52,000 going back to last year.
According to the lawsuit’s initial complaint filed in April, Oak Hill’s attorney Lacee Curtis wrote that the property’s abandonment from the iCap bankruptcies’ estate “meant that the automatic stay was no longer in effect” for the site “and the statutory time period for Oak Hills to file a lien foreclosure lawsuit for the lien began running again.”
According to Oak Hill’s lawsuit, the company performed work under contract at the site from around November 2022 until June 2023 and submitted “periodic payment requests.”
The complaint contends the requests went unpaid. Oak Hill requested a “deficiency judgment against 725 Broadway if the proceeds of the foreclosure sale are not adequate to pay the Lien, an award of costs and attorneys’ fees, interest, and any additional amounts secured by the lien,” according to its complaint.
In July, the construction firm was granted its motion for a default judgment and received an order of default and decree of foreclosure against 725 Broadway LLC, to collect more than $454,700 to cover the principal balance owed, plus interest, attorney’s costs and fees.
No attorney is on file for the LLC in the lawsuit. Attorneys for the construction firm did not respond to a request for comment.
Other Tacoma sites up for debt-collection auctions
Graffiti Garages is among the latest Tacoma sites up for sale to collect on debt this fall.
In November, the Marriott Tacoma Downtown faces a trustee sale, and parcels formerly planned for Tacoma Town Center face a county foreclosure sale the same month. The Marriott action is to help recoup the developer’s lender debt, while the county seeks to collect on past-due property taxes owed by the vacant Tacoma Town Center lots after they hit the three-year delinquency threshold for county foreclosure.
A seventh parcel that was part of the Tacoma Town Center site is not part of the county foreclosure action, with its tax debt paid by a former site contractor to preserve its own lien and judgment against the site. A separate order of sale has been requested in Pierce County Superior Court for that parcel.
For the six Town Center parcels up for auction, Nov. 3 is the final date to redeem them from property-tax foreclosure, with payments due by close of business, 4:30 p.m. Final collection involves putting the sites up for auction Nov. 4, with the auction held online via the county’s contracted vendor, Bid4Assets.
Previous reporting from The News Tribune contributed to this report.