Chuckanut Ridge now fully owned by bank

By John ServaisOn Jul 22, 2011

Washington Federal has bought out Greenbriar's interest in Chuckanut Ridge. This clears the way for a sale of the 100 plus acres to the city of Bellingham - and the preservation of this valuable wetlands.

This morning on the courthouse steps a foreclosure auction was held and Washington Federal paid itself about $11 million for the 50% share of David Edelstein's portion of Greenbriar's ownership in the property. Sound complicated? This only touches the very basics. Edelstein has reportedly held back the sale of the property by the bank to the city for over a year now. The bank has been ready to sell the property to the city since taking over the assets of defunct Horizon Bank over a year ago. Edelstein was a major player in that bank and had millions in loans from the bank - which he has since owed to Washington Federal.

Mayor Dan Pike will now no doubt put together a purchase deal with the bank for close to $9 million and then seek City Council approval. The property is only worth about $6 million, according to some experts. And whether the council will approve over spending by almost $3 million city tax dollars is another question.

The auction was a surprise to most of those I contacted today. While there was a little-noticed legal notice in the Herald, there was no reporting in the paper and, indeed, even as I post now there is no information on the Bellingham Herald website.

If others have more information on all this, please feel free to comment and help us all learn more.

About John Servais

Writers • Fairhaven, Washington USA • Member since Feb 26, 2008

John is super cool, and knows more about the news and internet-news business than just about any other guy around. He runs this website, and keeps an eye on everything. Read some of his articles, and let him know what you think.

Comments by Readers

Robert P. Gibb

Jul 24, 2011

John, my comments about Chuckanut Ridge (CR) are as President of the Chuckanut Mountains Park District Advisory Committee. Yes, we are still alive but without much resource.  We have played a role in the CR saga, communicating with the FDIC as Horizon collapsed, and with Washington Federal (WF). We have monitored their successful foreclosure, their lawsuits and counter suites with Edelstein, and the fascinating redundant process of sale of the property to themselves in the court house atrium above the steps where there were several other sales going on at the same time.

We have met with several City Council members,  President Shepard at WWU, and Mayor Pike relative to setting up joint ownership of CR much like the Sehome Arboretum, between the City and WWU.  Our pitch is that the City pay whatever it can negotiate with the bank for half of the title.  The other half will be donated by WF as a charitable donation to the WWU Foundation. Naming rights might be included.  WF is concerned that the FDIC will/may object but I have discussed this with the FDIC legal counsel and off the top, he saw no problem as long as it is standard banking practices.  From my perspective gifting a forested wetland to an educational institution for teaching and research purposes is far more socially redeeming than funding a baseball or football stadium for a bunch of professional athletes and private owners to make their personal fortunes.

For the City, joint ownership shares the maintenance, operational and liability costs.  It will generate positive PR and make whatever the finale negotiated cost look better.  The mayor has agreed.  Despite the many guesses as to the value of the property, it has always been what a willing buyer will pay.  Of interest at the courthouse sale, Steve Adelstein, I presume representing David Edelstein,  before the auction started asked the trustee conducting the auction, what the bank’s bidding price was. Developers are still out there willing to buy a swamp, if the prices is low enough. Hopefully, whoever does the negotiating for the City keeps this in mind as they negotiate.

This property will not tolerate high recreational use.  It requires environmental protection to continue to function in nurturing Chuckanut and Padden Creeks and protecting Puget Sound.  WWU will have a strong vested interest in maintaining this property.  Huxley will be the only environmental college in the nation with a forested wetland as a teaching and research asset within walking distance of the campus.

The job now is to educate the City Council and the community at large that acquisition by the City and WWU is a worthwhile environmental investment for future generations.


Tip Johnson

Jul 25, 2011

Sure, price is always an issue.

I remember when developers wanted Big Rock Garden and argued that it was inappropriate for the City to pay more than they would.  I disagreed.  If a property is worth preserving, it is worth outbidding developers.

The Chuckanut Ridge property is a little more complicated. In this case, the exorbitant value was literally cooked up by phony zoning and maintained through terrible City planning and administration.  Even after all that, it appraised in 1996 (or thereabouts) at a bit over $3 million.  Then we had the housing bubble and the greed-bone antics of a failed bank and developer pumping it up to a turgid $24 million asking price, assessed around $14 million.

Today it is a different story.  I doubt developers will be clamoring for a piece of the Chuckanut Ridge action.  They certainly were not thronging the courthouse steps to buy it at half the would-be developers price.  One look at the DEIS unequivocally underscores the absurdity of the proposal.  It showed that a negotiated one-half of the zoned density would create a disaster.  Newcomers will have to face that fact and won’t be able to exploit archaic wetland protection standards and claims of vestment that the City has so conveniently maintained for the now failed proponents.

Nevertheless, the Chuckanut Ridge property has great value to the City.  It is the only property that could expand Fairhaven Park to meet the City’s own standards for the area’s planned population targets.  It is the only property that can effectively bridge Fairhaven Park to the City’s existing Interurban investments.  It is the only property tha City might use to create a regionally significant Gateway to the Chuckanuts.  After that, it is a wetland wonderland that sustains an important foodchain and habitat.

So I’m OK with outbidding developers.  But times have changed.  The Bank and the City should now do what is usually required:  another appraisal.  However, the City has been remiss in not reviewing the zoning and in not enforcing the wetland public safety standards.  It has foolishly bent over backwards to advantage this project time and again.  It has created an unreasonable expectation for the property and its carrying capacity.

It is time to square away these factors and appraise the property at it’s highest and best reasonable use.  Then the City can feel just fine about outbidding that number.


Larry Horowitz

Jul 25, 2011

In many ways, the ball is now in Washington Federal?s court.  For the past year and a half, bank executives have pledged their intent to ?do the right thing? but were stymied by their inability to act unilaterally while WA Fed was handicapped by the joint venture agreement initiated by Horizon Bank.

Now that the property itself is owned outright by WA Fed - and the bank is no longer encumbered by its association with Edelstein - will WA Fed ?do the right thing??

Will the bank finally recognize that there is absolutely no value (nada, zilch?) associated with any perceived ability to circumvent the unique public safety and environmental safeguards of the almost six year old Critical Areas Ordinance (CAO)? 

Does WA Fed understand that any development of this property will require 150 foot minimum buffers for all five Category 1 wetlands?

Will WA Fed revise its appraisal to reflect these expanded buffers and reduced developability?

WA Fed can be a good corporate citizen worthy of its slogan? ?Washington Federal. invested here?.  Or it can attempt to squeeze every penny from Bellingham taxpayers by trying to sell the property to the city at an over-inflated value based on insufficient wetland buffers.

To date, Mayor Pike has failed to protect the safety of Bellingham residents by refusing to enforce the CAO, a law specifically designed to protect the public from injury, loss of life, and property damage due to erosion, flooding, landslides, and steep slope failures.  By law, public safety ordinances are exempt from vesting, but the city attorney is apparently not up to speed. 

Regardless, the application is not vested under the prior wetland laws because it is neither complete nor compliant with the laws in effect when submitted.  Of course, vesting was made irrelevant when the Dept of Ecology confirmed they will require best available science for the Category 1 wetland buffers, a minimum of at least 150 feet.

Hopefully our esteemed Council members have been paying attention and will require a revised appraisal based on 150 foot buffers.  The revised appraisal will need to reflect the fact that, under best available science and 150 foot buffers, the connector road prerequisite cannot be met.  Consequently, the land is potentially undevelopable, at least as a high density, multi-family project.

It?s time for all parties to ?do the right thing?.  Not only Washington Federal, but our own public servants as well.

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