SVCR-0163-JollyRogers-770x150-012616-CW.png

The Gristle

Plan A.5
  • Google+

PLAN A.5: In a packed public meeting last week, the Port of Bellingham Commission approved an exclusive negotiating agreement (ENA) that would allow staff up to 120 days to draw up business terms and development agreements with Harcourt Developments from Dublin, Ireland, for the first development parcel of the Bellingham Waterfront District.

The 10.8-acre development parcel is critically sited adjacent to Old Town and the downtown core, and includes the Granary Building, potentially allowing these areas to be more tightly integrated and setting the tone and scale for future development of the district. The parcel is also at the nexus of road and infrastructure development planned and budgeted by Bellingham Public Works for construction in 2015, potentially promising a quick return on that public investment.

Port of Bellingham Executive Director Rob Fix said Harcourt principals have pledged to bring forth a development concept for the 10.8-acre parcel that is in alignment with the Waterfront District plan adopted by the port and city in December. The expectation of many observers is that, after four months of negotiation, port staff will report that dialogue with Harcourt should continue.

Harcourt Developments was one of four proposals received in July 2013 seeking to be the master developer for the 10.8-acre parcel. A major international developer, the firm’s largest and most notable project is the redevelopment of the Titanic Quarter, a former shipyard in Belfast, Northern Ireland. Less successful was the firm’s $1 billion Sullivan Square mixed-use high-rise project for Las Vegas, Nevada, a joint venture that tripped up in the financial collapse of 2007 and dissolved into a series of lawsuits.

We wrote last week of the proliferation of executive instruments that transfer deliberation and oversight away from elected legislative bodies and their open public processes to administration and staff, where agreements are negotiated in the dark. Nowhere is this more evident than in the negotiating agreement port commissioners approved last week that essentially authorizes the commission (and public) to be pressed aside while port staff negotiates in private with Harcourt. Thus, the ENA locks the public out of details of a project that has been fraught throughout with a lack of transparency and responsiveness to public opinion.

At the very essence of public concern is widespread apprehension that the port staff is really not up to the task of negotiating in private with a sophisticated international entity like Harcourt. No one on staff has experience negotiating a real estate transaction of this scale. The port has apparently prepared no independent financial analysis for the proposed public/private partnership, an analysis that should include a valuation of the property. Economic analysis would indicate both the bonding capacity and potential public liability for the project.

To understand why the port has dodged such a financial analysis, one must understand from the outset the agency planned to sell, worst-case lease, the 137-acre site of the former Georgia-Pacific mill. Through that sale, the agency would recoup costs for environmental cleanup and—potentially—finance the construction of a new marina.

Harcourt’s offer of a partnership with the port is a game-changer of a magnitude the agency has not readily admitted. The company’s remote status as an international developer based out of Ireland promises an added layer of unusual complexity to the offer.

In June of 2012, the port commission hired the Seattle consulting firm Heartland LLC for an initial phase of research and marketing to attract a potential developer for the initial 10.8-acre property, in anticipation that firm might submit a master development proposal for the entire waterfront district. Last February, the commission increased the expenditure to Heartland to a total of $285,000. In return, the company produced a marketing brochure, a request for proposal (RFP) for the “sale or lease” of those initial acres.

The port didn’t get much for its quarter of a million dollars, with the RFP drawing submittals from just four firms, none of which expressed an interest in the sale or lease of the property, proposing instead varying joint partnerships. One firm withdrew almost immediately. The paucity of proposals were non-responsive to the port’s goals to sell or lease the property; and one must wonder how many proposals the agency might’ve received had they expressed at the outset an interest in a joint partnership, where the public would continue to shoulder the cost and liability. Dozens?

Heartland itself is ripe for a potential conflict of interest, providing similar work and searching for similar proposals (from a limited universe of master developers) for the City of Everett’s stalled riverfront redevelopment. The arsenal of cheap, knowledgable, loyal and durable consultants—the constellation of local development and entrepreneurial business interests organized under the Bellingham Public Development Authority (BPDA)—was rejected out of hand by port staff and now teeters on the brink of dissolving.

The financial environment in which the RFP was originally submitted was hardscrabble, with the global real estate market still reeling from collapse and development and investment firms still litigating and recovering from that collapse. The property—a shuttered, contaminated industrial brownfield—is hardly unique on the American landscape and is of interest only to a particular (and quite finite) set of developers, each looking for sweetheart agreements that would shoulder most of the financial risk on to the public.

Undoubtedly, Harcourt has the resources to tie up port staff and the property for much longer than 120 days, and commissioners offered no policy guidance for next steps beyond that period. Maybe they should spend the time drafting Plan B.


blog comments powered by Disqus

 

Past Columns

January 27, 2016

‘YOU HAD ONE JOB’: Two weeks into their short 2016 session, and the Washington State Legislature is already bogged down. The 60-day session is ordinarily designed for adjustments to the… more »

January 20, 2016

A MATTER OF CONVICTION: Problems with the jail did not end when voters rejected a proposal to construct a new justice facility in November; in fact, the problems are just… more »

January 13, 2016

GO ASK ALICE: A groundbreaking study released this week finds that nearly one in three households in the Pacific Northwest struggles to afford basic standards of living, a remarkable commentary… more »

January 6, 2016

ALL CHARGED UP, NO GAS: A new year begins, and with it the oaths of office and the swearing ceremonies of new public officials elected last November. Among these, the… more »

December 30, 2015

AULD ACQUAINTANCE FORGOT: Will 2016 be the year Whatcom County finally achieves compliance with the Growth Management Act, enacted a quarter of a century ago? Perhaps; but it’s doubtful.

Whatcom… more »

December 23, 2015

COAL IN YOUR STOCKING: ’Tis the season for retail sales. Following that, the weakened Canadian dollar coupled with the closure of a major industry and its associated payroll could send… more »

December 16, 2015

Farewell: At the end of their legislative year, city and county councils took time to bid farewell to extraordinary departing members with whom they’ve collaborated and (at times, and with… more »

December 9, 2015

HOLDING PATTERNS: Fallout continues from the county’s calamitous failure to pass a funding package for additional corrections capacity. A 0.2 percent sales and use tax to construct a new facility… more »

December 2, 2015

FACTIONS OF MISCHIEF: All eyes turn this week to Paris, where the largest gathering of world leaders in history begin a multinational effort toward forging what many call the planet’s… more »

Cascadia Weekly

Home | Views | | Archives | Advertising | Contact | RSS

© 1998-2016 Cascadia Newspaper Company LLC | P.O. Box 2833, Bellingham WA 98227-2833 | (360) 647-8200