Ken Grassi, the University Place mayor who is running for Pierce County Council, owes the Internal Revenue Service $71,902 in back taxes.
Grassi said the debt is due to a decline in his business, Grassi’s Flowers and Gifts Inc. in Tacoma, since the recession. Grassi co-owns the business with his wife, Kimberly.
“Those are taxes that we just got behind in over the last 41/2 years,” Ken Grassi said. “We’re paying it off just as quickly as we can.”
The IRS put a lien on Grassi’s home in 2009 because of the debt.
Court records also show several tax warrants from the state Department of Revenue and the Department of Labor and Industries against Grassi’s business, dating back to 2009.
The most recent state tax warrants were in April for $4,784 and $3,104, according to Pierce County Superior Court records.
Grassi said he’s paid back those state taxes. A regional compliance officer with the state Department of Revenue confirmed that there are no unpaid filed state tax warrants against Grassi’s business.
Grassi has been in the floral or plant business since 1976. Grassi’s Flowers and Gifts has two locations in Tacoma.
Grassi said he has an agreement with the IRS to pay back the tax debt monthly, plus penalties and interest.
“Our goal is to have it paid off within two or three years,” he said.
Grassi said the economy has hurt the floral business. For some people, he said, buying flowers has become a luxury.
Grassi also said the City of Tacoma’s switch to paid street parking nearly two years ago has hurt business at his downtown location at 1702 Pacific Ave.
Grassi, a Republican, is running against three other candidates for the District 4 County Council seat representing Fircrest, University Place and much of Tacoma. The four are seeking to fill the position being vacated by term-limited Tim Farrell, D-Tacoma.
Chris Nye, a Republican and a real estate agent, also is a University Place City Council member. The other two candidates are Tacoma Democrats: state Rep. Connie Ladenburg, who represents the 29th District, and real estate agent Sharon Benson.
The top two finishers in the Aug. 7 primary election will advance to the November general election.
A News Tribune search for property liens for the other candidates turned up sewer and homeowners association liens against Nye from 1994 to 2003, which were all resolved.
The federal tax lien against Grassi includes unpaid taxes reaching back to March 2009, according to county auditor’s records. Grassi provided an IRS letter to The News Tribune with his updated debt balance.
Grassi acknowledged having the debt and a tax lien placed on his property is “not a position that we’re proud to be in.”
But he maintained that it doesn’t make him unfit for elected office; he said he’s qualified to oversee the county’s budget for core government services of $273.6 million.
“How I look at it is that it shows character, endurance and commitment,” Grassi said. “It would have been very easy to file bankruptcy and I could have walked away.”
Grassi, 56, has been a City Council member in University Place since 1995. He was chairman of the City Council’s finance committee for two years about a decade ago.
As mayor, Grassi said he scrutinizes UP’s annual budget of about $20 million “with a real determination and seriousness to make sure dollars are spent wisely.”
Grassi’s Flowers and Gifts has 22 employees and annual revenues of nearly $2 million, doing business with more than 500 vendors, Grassi said.
He said he’s had to examine business spending across the board to reduce costs. Sales have improved, he said, adding that Grassi’s Flowers and Gifts is in no danger of closing.
“It’s a lot I feel responsible for,” Grassi said.steve.maynard@ thenewstribune.com 253-597-8647 blog.thenewstribune.com/politics @TNTstevemaynard News Tribune staff researcher Leon Gonion contributed to this report.