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Seattle Hotel Owner Files Lawsuit Against City for Alleged Property Damage from Homeless Shelter Operations
A Seattle hotel owner is taking legal action against the city of Seattle and King County, alleging that officials breached contracts when they utilized her property as a homeless shelter. The hotel owner claims her property was returned in a damaged and uninhabitable condition.
Neha Nariya, the owner of the historic Civic Hotel, reported that King County approached her in April 2020 to use the hotel as a COVID-19 recovery site for homeless individuals. Nariya explained that she and her family believed supporting their community during the global pandemic was the right thing to do.
According to The Seattle Times, local officials expressed concerns that homeless shelters could facilitate the spread of the coronavirus. As a result, they rented hotels to help mitigate the crisis.
In 2022, Seattle assumed control of the contract as part of its CoLEAD housing program, managed by the nonprofit Purpose. Dignity. Action., also known as PDA. The lawsuit, filed in August, claims that both city and county officials agreed to supervise tenants and ensure the property’s return in its original condition.
Despite these agreements, Nariya stated that her hotel, fully renovated in 2019, was returned to her in December 2024 in a state that was severely damaged and contaminated following widespread drug use involving fentanyl and methamphetamine. Tragically, a newborn infant was discovered dead on the premises during that timeframe.
Her attorney reported that the destruction has resulted in millions of dollars in losses for Nariya, inhibiting her from reopening the hotel business. Nariya expressed her concerns, stating, “I don’t know if we’re going to even be able to retain the property if it continues for much longer. My dad passed away unexpectedly last fall, and we were business partners, so it’s been very trying. I really just want to run my business at this point.”
The lawsuit alleges that the city failed to conduct testing for biohazard contamination, even though they were contractually obligated to do so. Nariya mentioned providing Seattle with a preliminary damage estimate in January 2025, prior to fully understanding the extent of the drug contamination. However, she received little response until June when the city refused to assume any financial responsibility.
Subsequent testing uncovered what Nariya describes as pervasive drug contamination that necessitates a complete renovation down to the studs. The complaint also accuses city officials of suggesting they could use eminent domain as a means to devalue her property.
Mark C. Lamb, Nariya’s attorney and shareholder at Carney Badley Spellman, commented on the city’s alleged missteps, stating, “It was a very chilling and odd thing for them to say under the circumstances. The reality is, they damaged my client’s property. My client stepped up in the middle of a pandemic to do the right thing, and to try to help people who were experiencing a really difficult time. The fact that they would coldly dismiss that is just stunning to me.”
Nariya is seeking damages, interest, legal fees, and other forms of relief through her lawsuit.
In response, the city of Seattle stated it could not provide comments on ongoing litigation. King County did not respond to requests for comment.
The nonprofit Purpose. Dignity. Action. refuted the allegations outlined in the lawsuit, labeling it as an attempt to gain a cash settlement. They asserted that a thorough walkthrough of the site was completed at the time of their departure in December, with Nariya allegedly approving its condition. PDA claimed to have provided 24/7 staffing during their tenure, and criticized the owner for allowing unauthorized entry afterward.
Regarding the contamination allegations, PDA stated that they have not been given access to test results. They believe any drug residue present occurred either before or after their tenure and insisted they enforced strict no-smoking rules. Additionally, the organization characterized the claim of needing to strip the building down to the studs as inconsistent with standard contamination protocols.
PDA expressed deep sorrow over the infant’s death, describing it as a devastating tragedy. They revealed that their staff discovered the deceased baby along with the father after the mother had concealed her premature delivery days prior while entering inpatient treatment. The organization claims the mother was actively supported in outpatient treatment and was making significant efforts to overcome her substance use issues before her premature delivery.
Legal Implications and Community Reactions
This lawsuit raises pressing questions regarding the responsibilities of local governments when it comes to managing properties repurposed for social services. Legal experts warn that this case may set precedents for how municipalities handle future agreements with property owners in similar situations.
Community responses to this legal battle have been mixed. Many locals sympathize with Nariya, viewing her situation as a cautionary tale about the challenges of balancing public health initiatives and private property rights. Others feel that the city was justified in its actions, arguing that the homeless crisis necessitated rapid and sometimes unconventional solutions.
The Broader Context of Seattle’s Homelessness Crisis
The ongoing legal skirmishes highlight the broader context of Seattle’s homelessness crisis, which continues to escalate, drawing attention from city officials, community members, and activists alike. As the city grapples with limited resources and increasing numbers of homeless individuals, the complexities of addressing these issues remain evident.
As the lawsuit unfolds, it will likely bring further scrutiny to the effectiveness of current approaches to tackling homelessness and the safety of properties designated for such services. With pressures mounting on local governments to act decisively, the balancing act between public health and individual property rights will be pivotal in shaping policies moving forward.
