No takers at Governors Point auction

Bill Handsaker, a retired engineer from Minnetonka, Minn, makes pictures of Governors Point from an overlook on Cleator Road on June 16, 2008.
Bill Handsaker, a retired engineer from Minnetonka, Minn, makes pictures of Governors Point from an overlook on Cleator Road on June 16, 2008. The Bellingham Herald

Conservation group Whatcom Land Trust has renewed interest in preserving Governors Point after the cancellation of a bankruptcy auction where the peninsula’s 125 mostly undeveloped acres were to be sold.

Bids were to start at $3.5 million on Thursday, Oct. 8, at an auction intended to raise money for property owner Roger Sahlin’s creditors. Sahlin, whose family has owned the peninsula off of Chuckanut Drive south of Bellingham since the 1960s, sought Chapter 11 protection in May.

Only the Whatcom Land Trust paid the refundable $200,000 fee to enter the auction, according to Rand Jack, a Land Trust board member. The earnest money was covered by “a couple committed to supporting protection of a substantial portion of Governors Point,” Jack said in a press release on Friday, Oct. 9. He declined to identify the couple.

Jack said he was accompanied by the couple and Dean Brett of Friends of Chuckanut, another conservation group. Since that group was the only one to show up, the auction was called off, Jack said.

Then came the sales pitch, according to Jack.

“They were clearly very anxious and agitated,” Jack said in an interview Friday, Oct. 9. “They were nice, but this was pretty disappointing to the debtors.”

“They urged us to make an offer on the property right there and then.”

Jack said his group wasn’t prepared to make a formal bid because the Land Trust has a financial partner who has yet to commit to the purchase. The partner, a developer, contacted Whatcom Land Trust just two weeks ago, he said.

The developer, whom Jack wouldn’t name, still needs to be convinced that wells on the property would provide enough water in the long term for 25 homes he would build on the point.

The 25 homes would be the maximum allowed on Governors Point and would be clustered on 50 acres on the southwest part of the point, leaving some 70 acres undeveloped and available as public access to Pleasant Bay.

“He really wants to work with the Land Trust,” Jack said. “The bottom line is, he has to get his investment back. He’s not making any donations.”

I think the community should know what’s going on. We’d like someone to pop up and give us a million dollars.

Rand Jack, Whatcom Land Trust

Jim Day, the attorney representing Sahlin’s businesses in the bankruptcy, was present at the auction and bristled at Jack’s account of it.

“For starters, they never represented to us that they were there on behalf of the Whatcom Land Trust,” Day said on Friday, Oct. 9.

“They purported to be interested in the property and rejected making an offer,” Day said. “So why were they there if they had no authority to make any bids?”

Potentially complicating discussions at the auction was a prior legal fight between Brett and Friends of Chuckanut, and one of Sahlin’s businesses represented by Day — Governors Point Development Co.

Sahlin’s company had sued the city of Bellingham in 2009 over its refusal to provide enough water for 141 homes on the peninsula. When the city filed a cross appeal, Friends of Chuckanut joined the countersuit. The city and Friends of Chuckanut ultimately won the case in 2013 in state appeals court.

In response to Day, Jack said the Whatcom Land Trust followed the auction’s rules.

“My interest is in the community. I think the community should know what’s going on,” Jack said. “We’d like someone to pop up and give us a million dollars.”

The Land Trust has raised $2 million so far to purchase Governors Point and needs $1 million more to join with the unnamed developer to make a viable offer, Jack said.

“We want people to know we’re not just sitting there on our hands,” he said. “We don’t have the kind of money to buy it ourselves, but we’re working with Friends of Chuckanut to raise a couple of million dollars.”

Auctioning off Governors Point was to be a key part of the reorganization of Sahlin’s real estate businesses. Money from the auction was to pay off $4.9 million in liens against the property, according to Sahlin’s Seattle attorney, Bill Malaier. Any money left over would go to other creditors, in the order agreed upon in bankruptcy court.

Bankruptcy documents give the value of Sahlin’s land on Governors Point as $11.2 million.

Reach Ralph Schwartz at 360-715-2289 or ralph.schwartz@bellinghamherald.com. Follow him on Twitter at @BhamPolitics.