By the end of the year, the Port of Bellingham could reach a deal with an Irish development group that hopes to help rebuild some of the city’s waterfront.
Port Executive Director Rob Fix has been working with Dublin-based Harcourt Developments since February to pen a development agreement that meets the port and city’s expectations for style and speed of improvements on the waterfront while suiting the firm’s needs
The port and Harcourt have roughly negotiated plans to develop a new commercial and residential area on an 11-acre parcel of land that includes the Granary Building. The parcel sits along the northeastern edge of what was once home to a Georgia-Pacific pulp and tissue mill.
During the port commission’s regular meeting Tuesday, Nov. 4, Fix told the commission the agreement was about 80 percent finished, and he was also 80 percent confident there would be a deal by the end of the year.
However, until money changes hands, Fix said, either side still could walk from the deal.
“They could always get cold feet, or other things could come up that cause them to walk away,” he said. “They’re going to have to put down some hard money in the purchase of the Granary Building or some land.”
Harcourt development troubles
Harcourt has had success developing large-scale projects in several countries, from shopping centers and hotels to an acclaimed waterfront development on a brownfield site in Northern Ireland.
But at least two large projects Harcourt has worked on in the last several years led to lengthy legal disputes with development partners.
In 2008, Harcourt was sued by the agency it was partnering with to build a development called Sullivan Square in Las Vegas.
Ground was broken on the site in 2007, but the neighborhood, planned in the style of early 20th-century urban high-rise villages, was never built.
Court records show the 2008 case, which alleged a breach of fiduciary duty by Harcourt, was dismissed, and a claim the firm still owed money to a contractor was dismissed in 2011.
Lawsuits are not uncommon in development, especially for multimillion-dollar firms such as Harcourt, Fix said.
“Just about any developer has legal problems,” Fix said. “That’s true throughout our nation.”
In another case, Harcourt was negotiating plans to build a mixed-use development on the island of Jersey off the coast of France. The local government decided to boot Harcourt from the project in 2009, claiming the firm hadn’t shown it could pay for the large project, according to reports by the Irish Independent.
But, Harcourt argued, the Jersey Development Company had asked the Irish firm to provide proof of a bond worth millions before the development agreement was even finished, the Independent reported.
Harcourt sued after losing the contract for the project, called the “Esplanade Quarter,” claiming breach of contract and a loss of potential profit of more than 100 million euros, media there reported. A court of appeals dismissed that claim in September, according to a Sept. 26 BBC article about the case.
However, Harcourt Developments said that is not the case and the company is still involved in litigation with Jersey Development Company over the Esplanade, according to a statement released to the Port of Bellingham Nov. 12 by Harcourt’s public relations firm.
“Litigation is an unfortunate, but not an unusual situation for many developers in the course of business in this sector,” the statement reads. “Contrary to misleading media reports our litigation against the Jersey Development Company over the Esplanade Quarter is ongoing. It would be inappropriate, therefore, to make further comment other than to say we are confident of the outcome.”
Harcourt did not respond to other questions emailed by The Bellingham Herald.
Kicking the tires
At the Nov. 4 Port Commission meeting, the three commissioners gave Fix the OK to go to Ireland to check on Harcourt’s financial statements and talk to others who have worked with the developer.
One goal of the trip will be to “kick the tires” and check out Harcourt’s Titanic Quarter waterfront development in Belfast, Northern Ireland.
Formerly the shipyard where the Titanic was designed and built, the Quarter includes a Titanic museum, a film studio that has been used for the popular TV show “Game of Thrones,” high-tech office space and businesses. Plans include building residences for thousands of people.
Fix said he likes that Harcourt has shown they won’t invest in a market if they don’t believe the timing is right.
“We don’t want to build a bunch of buildings and have them sit there empty, or have people move from other parts of town and then have those buildings sit there,” Fix said.
The Quarter’s setup is similar to a plan for Bellingham’s waterfront, which could include office buildings, commercial space and apartments, as well as parks and public access to the bay.
So far, the firm’s plans line up with the waterfront’s master planning documents that were finalized by the port and the city late in 2013, Fix said.
The trip also will give Fix the chance to examine financial documents Harcourt does not want to become public record.
Fix, who was the port’s chief financial officer for several years before becoming executive director, said he will take a look at the company’s balance sheets to verify their ability to pay for development.
Granary first in line
It appeared likely Harcourt would try to update the 1920s-built Granary Building right off the bat if an agreement is signed. Plans for the surrounding waterfront acres would follow as cleanup of the brownfield site starts.
Last year, the port and Department of Ecology split plans for the 74-acre G-P cleanup site in two because different contaminants affect the north and south ends of the waterfront.
It will take about two years before the first portion of the site will be cleaned up, including the approximately 11 acres near the Granary that are included in the negotiations. With another two or three years needed to install utilities and infrastructure, the soonest Bellingham residents might see a new building on the waterfront would be four to seven years from now, Fix said.