Officials at the University of Washington contacted me this morning to clarify their financial relationship to the Halcyon mobile-home park that is the impetus for Council member Sawant’s effort to place a moratorium on redevelopment of mobile-home parks.
The Halcyon park was owned by Hester McLaws. When she passed away in 1979, it became part of her estate, which has been managed in trust by U.S. Bank. It is unknown how much the entire estate is worth, or how much of it is the Halcyon property.
The trustee makes distributions from the estate every year, which would be according to instructions left by McLaws. One of the beneficiaries of those distributions has been the University of Washington School of Nursing. According to UW:
The first distribution from the Hester McLaws trust was received by UW in 1982. UW has received and spent approximately $1 million for student scholarships at the School of Nursing through the McLaws Scholarship. The scholarships originally supported PhD nursing students during their dissertation work. Scholarships now support PhD nursing students before dissertation, as well.
UW receives an annual payout, which varies each year (presumably based on the financial returns of the estate’s holdings). Between 2012 and 2018, the annual payments ranged from $0 to $99,241, with an average of around $28,700.
UW says that it doesn’t own any financial interest in the McLaws estate, and has no role in decision-making for it. That means it has no control over any aspect of the sale of the Halcyon property, nor what happens to the proceeds of the sale. UW is, in their words, a “grateful beneficiary,” but that is the extent of their involvement.
According to public statements from residents of Halcyon, they each pay around $700 per month in rent for the pads underlying their manufactured homes. With 85 homes on the property, that totals about $714,000 in annual revenues. That would likely cover the property taxes ($63,000 in 2018) and expenses associated with running the park, and still leave enough for the payout to UW. It’s unknown whether there are other beneficiaries of the trust besides UW.
Hester McLaws passed away 40 years ago. It may be the case that the trust was written to expire after 40 years, and the assets are all being liquidated so they can be distributed out; that wouldn’t be an unusual arrangement for an estate trust, and the trustee would have no choice but to follow the instructions established when the trust was set up. If so, and the property does indeed sell for $22 million (the current asking price), that could be a hefty payout for UW and any other beneficiaries. Even if it isn’t expiring and will continue on, at a typical payout rate of 5% on a charitable trust’s holdings that would generate $1.1 million of payouts per year, considerably more than the $714,000 of revenues (before expenses) that Halcyon is generating for the estate today. With that context, it’s no surprise that the trustee is looking to sell the mobile home park.
Trusts such as this one generally generate no public records and as long as they pay applicable taxes are under no obligation to release any information, so we may not find out anything more about U.S. Bank’s plans for the estate until it’s a done deal. But we know now that UW’s role is minimal. I will, however, continue to dig.