The owners of Port Townsend’s iconic Hastings Building may have found financing to keep the historic building off the auction block.

At a hearing late last week in Jefferson County Superior Court, attorney Malcom Harris said the owners of the building were expecting to get a loan commitment from a new lender, with the actual loan to soon follow.

A site visit was planned for Tuesday, he said, and the family believes they have “a good chance” of getting a new loan.

The Hastings Building, described as the “crown jewel” of historic downtown Port Townsend, is schedule to go up for auction at the Jefferson County Courthouse at 11 a.m. Friday, April 2.

The landmark Victorian three-story structure that The Leader called “the most elegant building in the city” when it was under construction in 1889 has been in foreclosure since last year.

The foreclosure auction was ordered by Jefferson County Superior Court Judge Keith Harper in 2020 after the owners of the building fell behind in payments on a $3.3 million loan that was made to its owners, Hastings Estate Company and Hastings Master Tenant.

Harris, an attorney for the family, was in superior court Friday seeking the awarding of attorney fees for the family following the court decision last year in their favor that postponed the foreclosure sale.

During last week’s hearing, Harris said there was no disagreement that the owners of the building had defaulted on its loan from Pender West Credit.

Last July, the primary debt on the property to Pender West Credit was estimated at $3.8 million. According to a legal notice published in advance of the April 2 sale, the total owed on the property is now $4.1 million.

“There’s still hope we may be able to pay Pender off,” Harris said Friday.

Even so, Harris said the owners should be awarded $22,815 in legal costs from last year’s court fight to get the foreclosure sale postponed.

“We believe that we’re entitled to attorney fees,” Harris told Judge Harper.

The decision, he said, is clear given that they had been granted their request for an injunction that postponed the foreclosure of the property last year.

“They were not the prevailing party,” Harris said of LPSL Corporate Services, the law firm representing the lenders in the case.

“There were not other issues in this case,” he added.

Harris also said the amount of legal fees assessed by attorneys representing the lender in the injunction case were absolutely unreasonable.

Eight attorneys and paralegals had been used in the case, Harris said.

To charge $550 or $650 an hour, Harris added, was “just ridiculous,” adding that his fee was $350 an hour and he was not aware of any other lawyers in Port Townsend with higher rates.

Harris also said the attorney fees being charged were excessive and “should be given a serious haircut.”

The fees for the notice of the foreclosure sale, which was a relatively simple matter that used boilerplate language, were being charged at the rate of $550 and $650 an hour, depending on the attorney.

“A deed of trust foreclosure is not rocket science,” Harris said.

He also questioned why the lender needed to hire one of the major law firms in Seattle, as well as another one in Delaware.

Local attorneys, Harris added, charge much less.

But Gregory Fox, the attorney for the lender, disputed the claim that the court case was a simple foreclosure.

“This was a highly contested matter,” Fox said.

Under its loan agreement with the owners of the Hastings Building, the lender also has the right to claim legal costs involved in the foreclosure, he said.

“There is just no basis for an award of fees,” Fox said.

He noted the injunction was temporary, and the foreclosure sale is still scheduled for April 2.

The choice of legal counsel was also the lender’s call to make, Fox added, and it has the right to choose a Seattle law firm, as well as also rely on the law firm in Delaware it has often used in the past.

The rates charged by LPSL Corporate Services, he said, were “right down the middle” for Seattle law firms that practice commercial law.

“We do think the fees were warranted and reasonable,” Fox said.

Harper said the owners of the building had clearly won the early court action over an injunction, however, and should be awarded their legal costs of $22,815.

Harper also said he was flattered with Harris’ suggestion that the judge was all-knowing about the hourly rates currently being charged by lawyers. But he declined to trim back the hourly attorney rates cited by Harris.

“I’m not in the trenches. I’m not billing clients,” Harper said.

“As an aside, the hourly rates that I am reading about here are not even close to anything I’m remotely familiar with,” the judge added.

Harper said he had been a general practice attorney, and “very small town.”

“On the one hand I’ll say the amount being claimed by the defendants, in my opinion, are extraordinary,” Harper said.

That said, there had been no information that had been shared that shows the charges were unreasonable.

Harper added he wasn’t able to second guess the lender’s choice in attorneys.

After the judge’s decision, Fox continued to press for reductions in the attorney fees that were awarded and the dates on when the charges should begin and end in the injunction case.

Harper grew noticeably irritated as Fox continued to question where the bookends should be set, until Harper said he wasn’t going to “nitpick” over two weeks of lawyers’ bills.

The two sides need to come to an agreement amongst themselves, he said.

There was no reason why he should have to delve into the invoices to determine what fees were attributable to the injunction, and which ones weren’t, he said.

“Work it out. I’m not kidding,” Harper said.

Located at the corner of Water and Taylor streets, the Hastings Building is still owned by the family that built it and for which the landmark is named.

For the past 15 years, the present generation of the family have been working to restore the building and construct a new building next door that would allow the Hastings Building to be restored.

Harry Dudley, the president of Hastings Estate Company, is the great-great-grandson of Lucinda Hastings, the widow of Loren B. Hastings (one of Port Townsends four original pioneers in the 1850s).

Dudley, along with Lucinda Eubank, a great-great-granddaughter of L.B. and Lucinda Hastings, are the sole owners of Hastings Estate Company, which was formed in 1890 by Lucinda Hastings. They began working to save the historic building in 2006 after a storm damaged the pilings supporting the adjacent Surf Restaurant & Bar in 2005.

The family has invested more than $1.1 million of their personal funds toward the project and permits for Hasting Landing Inn, a 79-room boutique hotel that would be built behind the existing building next to Port Townsend Bay.

Members of the Hastings family have declined to comment on the upcoming sale, citing the current lawsuit.