A year after creating incentives for marine trade, port property is a hot commodity

When the Port of Bellingham commissioners decided last year to tweak property lease policies to encourage more water-reliant businesses, there was concern it might hurt overall occupancy rates. It turns out there was no need to worry.

It’s been a busy year for the real estate division at the port, which has signed 12 new businesses to leases and helped five others expand so far in 2018. That’s according to Shirley McFearin, the port’s director of real estate.

The port’s occupancy rate has climbed to around 98 percent, something that’s never happened before, said Mike Hogan, spokesman for the port.

Existing tenants have added more than 34,000 square feet so far this year, while new tenants have occupied more than 92,000 square feet, according to data from McFearin.

All five of the businesses that expanded are marine related, while five of the 12 new businesses have ties to the maritime industry. Some additions, such as Interior Doors & More, are at the airport or other non-waterfront property. The retailer recently moved to 3821 Williamson Way, Suite 1.

Other businesses that have signed new leases include Lakeside Marine, Moondance Kayak, On-Board Marine Services, Washington Divers, Bellwether Dental Cosmetic Dentistry and Ideal Wellness. Expanding businesses include LFS Marine & Outdoor, Bellingham Cold Storage, NW Explorations, San Juan Sailing and Top to Bottom.

More than a year ago the Port of Bellingham approved a Water Reliant Commercial Marine Rental Policy. The Working Waterfront Coalition provided input for the policy, which among other things provides a discount from rental rate standards for certain facilities owned by the port for businesses that require water access or otherwise need waterfront property.

Port staff initially warned of potentially less short-term revenue for the port, but the port commission decided that the long-term benefits of attracting new commercial marine businesses would offset any short-term loss.

Tim Hoving of NW Explorations has noticed the change around Squalicum Harbor, where he says spaces have steadily filled up this year. NW Explorations is a charter and boat service business that also sells yachts. While non-marine related businesses are arriving, he’s encouraged by the number of new maritime businesses that are in the harbor area.

NW Explorations recently expanded it service department into new spaces near Squalicum Harbor. Six years ago the department had two technicians, now it is up to 10, Hoving said.

The economy has been a factor in the company’s growth and the subsequent expansion. The charter fleet is growing as more people from other countries are coming to visit, taking coastal tours of Alaska, British Columbia and the San Juan Islands.

“This area is on the way back up,” said Hoving, who has worked in the area for years at NW Explorations and at San Juan Sailing.

While the improving economy has no doubt been a factor, Jim Kyle believes the change in the rental policy has helped. Kyle, vice president of the Working Waterfront Coalition, noted that the maritime industry was stable during the last recession.

“The port needs to pay its bills, so it is a credit to them to take this risk,” Kyle said of the policy.