After $2M cost, little return, Bellingham Development Authority nears close

Jim Long, executive director of Bellingham Public Development Authority, shows interested community members the proposed Army Street development site during a tour Wednesday, Feb. 26, 2014, in Bellingham.
Jim Long, executive director of Bellingham Public Development Authority, shows interested community members the proposed Army Street development site during a tour Wednesday, Feb. 26, 2014, in Bellingham. THE BELLINGHAM HERALD

A public corporation originally formed to turn idle city-owned property into revenue-producing projects will likely close after its board voted to fire its sole employee, the executive director, Wednesday, Oct. 15.

Since forming the Bellingham Public Development Authority in 2008, the city has sunk more than $2 million into the public entity. The only cash return to the city has been the $1.18 million sale of a property at Cornwall Avenue and Maple Street, less than the original purchase price of $1.54 million.

All but the chairman of the PDA board, which has dwindled from seven to four members over the years, voted to terminate authority Executive Director Jim Long effective at the end of the October. The decision came on the heels of a Monday, Oct. 13, budget session where no Bellingham City Council members came to the defense of the authority, which was left out of Mayor Kelli Linville’s draft budget for the next biennium.

Each of the last three years, Linville did not set aside funds for the authority in her proposed budget. During planning sessions for the 2013 and 2014 budgets, City Council directed staff to find enough money to keep the public corporation operating.

The authority’s $550,000 budget for 2014 was eventually pulled from funds that otherwise would have paid for street maintenance. The goal was to allow the PDA to complete the first phases of testing the feasibility of an ambitious private-public building project on the edge of downtown.

Dubbed the Army Street Project for a street that was never built, the project site is bounded by West Holly Street, Bay Street, Central Avenue and West Chestnut.

Despite positive results from geotechnical, archaeological and environmental reports for the 2.5-acre site owned by private landowners and the city, a market study found that putting high-end office space, apartments and an underground parking garage on the parcel would not be feasible. Original designs had imagined a hotel as an anchor piece and draw on the site.

In a Sept. 22, 2014, report to City Council, Long and a consultant reported designs drawn up for the parcel in September 2013 would not be feasible without subsidies in the millions of dollars or serious design changes. The project was designed to appeal to developers who might want to invest in a project connecting downtown with a future redeveloped waterfront site owned by the Port of Bellingham.

At the Monday budget session in the mayor’s boardroom, even longtime supporters of the PDA had given up defending the unsuccessful entity.

“I really had hoped that the market survey …would show how we could justify getting the parking garage we desperately need,” council member Terry Bornemann said. “Unfortunately it was a good market survey and it didn’t show what we wanted to see.”

Council member Gene Knutson, who had previously voted against continuing to fund the PDA, said the project was a good idea at the start, but unfortunately it didn’t work out.

“I think the time has come where we go in a different direction,” Knutson said.

Linville said the city still could partner with the private landowners to implement a project on the Old Town site without the PDA, which was started under then-mayor Dan Pike.

“The difference is we’ll be very realistic with the property owners so their expectations are realistic of what we can do with them,” Linville said. “At one point in time this may have been a realistic vision, but it wound up not being one.”

Before Wednesday’s board meeting, Long had prepared some of the materials needed to start the dissolution process that will need to go before City Council and the public. Member Heather Wolf moved to dissolve the PDA as soon as possible, but fellow board members did not second her motion, meaning the city will need to instigate the dissolution.

Notice of a public hearing will need to be sent out a month before the council can take public comments and vote on any dissolution process.

Though the Army Street Project did not turn out to be feasible as first planned, Long has said the studies are valuable and will retain their value for years.

As for the Cornwall property, which was sold at a loss in 2011, Long said by selling the property the city will be able to collect development fees, property taxes and other fees from the once-vacant lot.

“Our mission was to put underutilized properties on the tax rolls,” Long said. “Quite a bit of value came from that.”

It should also be noted, the PDA sold the property for what it was worth at the time, board chairman Scot Barg said. It was bought by Catholic Community Services, which is using part of the land for low-income apartments; it sold another part of the parcel.

“It was what it was — you either have this piece of dirt generating almost no revenue, or you can develop it,” Barg said.