CBJ settles lawsuit with Gastineau Apartment owners

Apartments were demolished in 2016

The Gastineau Apartments, before it was torn down. (Michael Penn | Juneau Empire File)

The Gastineau Apartments, before it was torn down. (Michael Penn | Juneau Empire File)

The City and Borough of Juneau is getting some of its money back.

On Thursday, the city announced by email that it has reached a $1.5 million settlement with the former owners of the Gastineau Apartments, Kathleen and James Barrett.

That Franklin Street housing complex, desolated by a 2012 fire, was condemned and dormant for four years until the City and Borough of Juneau demolished it as a public nuisance. In the years between the fire and its demolition, the Gastineau Apartments were invaded by vagrants and caught fire a second time. An engineer’s assessment concluded the building’s facade was in danger of collapsing into Franklin Street.

After the demolition, the CBJ began court proceedings to recoup the cost of demolition. In June, Judge Philip Pallenberg ruled the city was correct to tear down the complex, but the issue of repayment was not settled.

The CBJ continued court proceedings against the Barretts, and a trial was set to begin Aug. 13. Thursday’s deal precludes that trial.

The city had been seeking $1.585 million, enough to cover the entire cost of demolition. By email, city manager Rorie Watt said the $1.5 million figure did “concede a bit” but also means the city doesn’t have to go through the risks of a trial, including any potential appeals.

It was not immediately clear how much the city spent on legal fees in pursuing restitution.

According to court documents, the deal calls for the Barretts to repay the city in installments. The first payment, $100,000, is due within 10 business days. Another $300,000 payment is due by Aug. 1 next year. The entire cost must be paid before Dec. 31, 2020, but the Barretts will pay interest unless they pay it all before Aug. 2, 2019.

James Barrett has been the target of enormous public opprobrium, and the deal contains a clause that requires Kathleen Barrett to evict James Barrett from his home at 401 Harris Street and forfeit any ownership interest in that property.

“The CBJ recognizes that 401 Harris Street has been associated with substantial calls for law enforcement services and security concerns for more than 60 people who live or work nearby,” the deal states.

The Barretts own other property in Juneau, including the site of the Gastineau Apartments, a lot at 329 Harris Street, the Bergmann Hotel, and two houses on Fourth Street. If any of those properties are sold, the proceeds will go into a trust account to repay the debt owed the CBJ.

If the Barretts fall short of their payment schedule, the CBJ may seize and sell their properties in town.

“This settlement is the end of a long struggle and it creates the path for redevelopment of these downtown properties,” Watt said in a city press release. “CBJ is glad to put this issue behind us.”

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