An Irish development group could start rebuilding part of the city’s waterfront as soon as 2017, if all goes according to plan.
A year after starting negotiations with Dublin-based Harcourt Developments, the Port of Bellingham has finished hashing out the terms of a master development agreement that would allow Harcourt to start work on the first 18.8-acre piece of the site.
The negotiations have involved the northwestern corner of a contaminated section of Bellingham’s waterfront that was formerly home to a Georgia-Pacific Corp. pulp and tissue mill.
In a presentation to the commission Tuesday, March 17, port Executive Director Rob Fix explained that if the commission and Harcourt both sign the agreement in coming weeks, Harcourt will get to initiate redevelopment, starting with the Granary Building.
Once the agreement is signed, which will likely take place during a special commission meeting at 3 p.m., March 31, Harcourt would have two weeks to put a deposit down on the port’s asking price of $200,000 for the Granary. The plans call to repurpose the existing building into a mixed-use building with residential space, offices and/or retail.
The rest of the roughly 19 acres would be sold in parcels as projects are proposed by Harcourt, at a price of $20 per square foot, an amount port staff say was fair based on appraisals of the contaminated brownfield site. The value per square foot would go up 3 percent per year.
In trying to ensure that work on the waterfront gets started right off the bat, the agreement stipulates that the Granary project has to be done by 2019, or Harcourt risks going into default on the agreement.
Barring unexpected delays caused by the port failing to finish cleanup on time or the city failing to put promised infrastructure in place in 2016, construction could start by 2017, Fix said. If, for some reason, Harcourt didn’t revamp the 1920s-built Granary by 2019, the port would have the option to buy it back for $10.
A second building also will need to be finished by 2021, regardless of market conditions, or the agreement goes into default, kicking off options for the port to offer the land to other developers.
A more extensive development schedule outlines plans for a third building to be completed by 2024, 500,000 square feet developed by 2029, and 1 million square feet developed by 2034. That schedule is subject to market conditions under the agreement, meaning Harcourt could opt to hold off for a couple years on certain projects if the timing is off.
Commissioner Dan Robbins pointed to Barkley Village as a point of reference for how long it could take to redevelop 20 acres.
“Roughly 20 acres took over 20 years,” Robbins said. “I know a lot of citizens are concerned this brownfield has been brown a lot of years. Just remember an acre a year is about a rule of thumb.”
Fix echoed that sentiment, pointing out that roughly 275,000 square feet that make up the Bellwether Development took about 30 years to develop.
“It won’t be our desires that drive this, it will be the market’s desires,” Fix said.
Commissioner Jim Jorgensen said that once things got going, the port would need to “keep the speed limit at a higher rate than it’s been the last couple of years.”
For purposes of the development, Harcourt plans to use Harcourt Washington, LLC, a corporation formed just for the waterfront project. Port lawyer Frank Chmelik explained that forming a single purpose corporation was not uncommon for developers, as it limits their liability. Under the agreement, both the port and Harcourt would agree not to collect damages if something goes awry, one of several stipulations in the agreement designed to protect public assets.
Fix said Harcourt would sign the agreement before the special meeting and the commission could take a final vote on whether to approve it.
“We did want to bring a final agreement to you on St. Patrick’s Day,” Fix said, but the actual vote to sign the document will need to wait until the public meeting March 31.
The agreement is available on the Port’s website at portofbellingham.com/524/Waterfront-District.