Bellingham council to decide on million-dollar real estate gamble


BELLINGHAM - The fate of the Bellingham Public Development Authority and its ambitious 2.5-acre Holly Street redevelopment plan could be decided by City Council at its Nov. 18 meeting.

The authority's board has approved an agreement with five private landowners along the west side of Holly Street, between Bay Street and Central Avenue. Combined with city-owned real estate on the same block, the deal would create a 2.5-acre site that could be offered to a private developer.

The property owners signing onto the deal are Trillium Corp., George Dyson, Wright Angle LLC, MacDonald Trust and Thornburg Trust.

Jim Long, the authority's executive director, says the site could accommodate an 800-space parking garage below ground level, with a hotel, residences, commercial and office space arranged around a pedestrian plaza that would provide a walkway to the Port of Bellingham property around the Granary building

But that won't happen unless City Council also agrees to join the partnership with the private property owners - and provides up to $1.3 million in up-front financing to get the project rolling.

Last year, the development authority barely survived the city budget process when council members voted 4-3 to give Long one more year to show progress on the project, dubbed the Army Street Project because it includes city-owned right of way for a non-existent street of that name.

Authority board member Ken Hertz, a real estate developer and former mayor, said he is convinced that the project is critical to the success of the port's hopes for the Granary area. Without redevelopment, Hertz said, the Holly Street block remains "a hole in the ground" that separates downtown from the waterfront.

"What happens to that hole in the ground if this (project) disappears?" Hertz said. "It's absolutely essential that this be done, otherwise you've got a hole, and then you've got the Granary. None of this ties together" if the Army Street project dies.

As Long sees it, the city already has nearly all the up-front money the project needs: the $1.2 million proceeds from the 2011 sale of a city-owned lot at 1100 Cornwall Ave.

"We are not asking for new money," Long said.

Long and the authority board arranged that sale to Catholic Community Services, the owner of adjacent property.

But in the past, a majority of council members have preferred to keep that money available for parking projects, since the city used parking revenue for the original 2008 purchase of the Cornwall property.

During late 2012 city budget deliberations, council members rejected the idea of earmarking any of the property sale proceeds for development authority use, on a 4-3 vote. Then they voted 4-3 to keep the authority alive in 2013 with a $250,000 appropriation from general city revenue.

Long said he will try to convince the council that the Army Street Project is a legitimate use of the money, because it will provide hundreds of parking spaces if it can be built.

Long also told his board that he believes he has met the City Council's expectations by presenting them with the agreement that puts the fragmented properties together for redevelopment.

"I think we've done all we can do," Long said.


For more information and a map of the proposed Army Street Project, go to this webpage.

Reach John Stark at 360-715-2274 or Read his Politics Blog at or follow him on Twitter at @bhamheraldpolitics.

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