News - Local News

POSTED: Monday, Aug. 31, 2009

Port, Lummis consider real estate partnership

During months of negotiations that led up to their Aug. 4 agreement on waterfront redevelopment projects, the Port of Bellingham and Lummi Nation discussed forming a partnership to acquire and develop as much as 100 acres of property along Slater Road, just west of Interstate 5.

The proposal was outlined in port records obtained by The Bellingham Herald as part of a public records request.

Although the partnership idea was set aside and did not become a part of the Aug. 4 agreement, it was still under discussion as late as June 2009, according to port documents. And port commissioners say it could be revived as a part of port-Lummi deals to come.

The port still needs to work out more detailed agreements with the tribe, aimed at ensuring the port's projects do not hurt tribe members' treaty right to income from fishing.

A development partnership could be among inducements the port could offer the tribe to get cooperation on environmental issues.

"That's one of the chips," Port Commissioner Doug Smith said of the partnership idea. "I think that's still a possibility."

Commissioner Jim Jorgensen agreed.

"It's certainly something that's in the works," he said. "It could be part of the agreement with the Lummis. It may not be, either."

Lummi Indian Business Council Chairman Henry Cagey declined comment.

Jorgensen and Smith agreed that the proposal has yet to get beyond the conceptual stage: There has been little discussion of financial terms or potential uses for the property.

SITE LONG-SOUGHT

Documents indicate the acquisition of property at I-5 and Slater has been a long-term goal for Lummi Nation, and that the tribe might seek to acquire trust status for some of the property. That would mean little or no state or local government jurisdiction.

Smith said he didn't think it was likely the tribe would want to use the site for a casino. The tribe's existing Silver Reef Casino and hotel is at Slater and Haxton Way, about four miles to the west.

An outline of negotiating points dated May 2008 refers to the project as a "commercial/warehouse development" and "joint venture." The same document indicates the port would acquire the property and plan its development, then transfer some portion of it to tribal control after the tribe raised money to pay for it.

A proposed, but not approved, "agreement in principle" dated Feb. 20, 2009, suggests the tribe would wind up with half of the 100 acres.

The same document suggests the port could offer the tribe an option for another four acres on the central waterfront "for commercial and industrial uses consistent with the underlying zoning." One more acre is proposed for tribal use as a "cultural resources/education/interpretive center."

If those or other real estate deals come to pass, the port is required to get a fair price for transfer of its property to the tribe or to anyone else, said Frank Chmelik, the port's attorney.

Documents indicate the Slater property is now owned by developer Ralph Black, who acknowledged having "preliminary, kind of 'what do you think' discussions" with the port about the property.

"The conversation probably was about 15 minutes," Black said.

He said the property is for sale but is not formally listed. He declined to discuss its potential price.

"We're in the real estate business," Black said. "We're always interested. ... I get these kinds of calls all the time."

The site is zoned light-industrial and general-commercial, Black said. Part of it is within Ferndale city limits, and part is in Bellingham's urban-growth area.

ENVIRONMENTAL BARGAINING

Port commissioners acknowledge that the tribe has legal leverage to block or delay waterfront projects, and they will have to come up with environmental protection measures as well as other incentives for Lummi Nation to keep their projects on track.

Commissioner Smith noted that federal court decisions give the tribe broad legal leverage to block or delay waterfront projects that could potentially hurt tribal harvest of salmon, crab and other treaty-protected fisheries.

"If you're going to do something to impact those treaty rights, you have to negotiate some way of compensation so that ... they end up with no net loss," he said.

Jorgensen said a partnership between the port and tribe could be a ground-breaker.

"It's just good to get something positive going with the tribe," he said. "It would be very unique to do that."

The Aug. 4 agreement between the port and tribe was more limited in scope.

In exchange for the tribe's preliminary cooperation on waterfront projects, the port agreed to a package of financial benefits, including as much as $120,000 in moorage subsidies for Lummi-owned fishing boats - $60,000 a year in 2009 and 2010.

The port also agreed to postpone, for one year, efforts to collect $126,000 in past-due moorage payments owed by tribal fishers.

The port has also agreed to contribute another $50,000 to Lummi Natural Resources to help develop strategies to compensate for the environmental impact of future waterfront projects.

Perhaps the most significant part of the Aug. 4 deal, from the port's point of view, was the tribe's acceptance of the port's plan for a marina inside the breakwater that surrounds the now-idle Georgia Pacific treatment lagoon. Earlier, tribal officials argued that the lagoon should be cleaned out and its massive breakwater removed, to restore the area to its original condition.