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Port Gives Away Our Bellingham Waterfront

Update - Sat April 4 - the port has removed the video of the meeting and so the link at the end of this article no longer works. The port has then edited the video, removing over an hour of video, and reposted the shortened version on You Tube at a this location. I will be asking for a copy of the full video from the port on Mon, April 6. Perhaps nothing of importance has been edited out; perhaps some has. We shall see.

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I went to the Port of Bellingham meeting this afternoon at 3 p.m. to learn first hand about the contract the port was about to sign. And moment by moment learned just how bad our port still is. It reminded me of the KAP scandal of 1991 when the port signed with KAP Development and was fleeced for a few million dollars. Surrounding that was secrecy, lies and stone walling of the public - just like today’s process.

So - what is happening that has so many of us political watchers upset? Well, this 200 page contract was only made public five days ago and the port intended to simply have a signing ceremony this afternoon. When asked to have a public hearing they said no, insisting they did not need one. When reminded that they were selling public land and it required a hearing, even then they tried to avoid a public process.

They agreed to allow a public comment session - not a legal hearing - to hopefully abide by state law. And so today’s two sessions. They still probably did not fulfill the state legal requirements. But to undo that will take a lawsuit.

This evening the port authorized signing a contract, selling for peanuts a large portion of our waterfront to a hollow corporation that was formed just 6 days ago: Harcourt Bellingham LLC. Signing with a shell company is a strong clue that we are dealing with shysters. So it was 25 years ago with the KAP agreements - where the port signed long term leases with empty corporations that didn't really exist and later lost millions of taxpayer dollars.

The parallels with the KAP debacle are evident. Even the port attorney is the same. Frank Chmelik advised the port through the KAP deals and is now guiding the port through the Harcourt sellout. Following the KAP scandal, none of the three port commissioner were reelected - one port staff person was fired and the executive director soon found another job and left. After that the port fired three staff members in their search for the person who was leaking information to me. They missed and my two sources remained employed - but after the third firing I quit monitoring the port as it was sickening to see good people losing their jobs because of me. More so because they had never provided me any information.

Back to today. Citizens have not had a chance to review this contract and there are many questions and concerns about it. Even the commissioners did not understand the contract, as was evidenced by Chmelik interrupting them several times to correct their explanations to the public. Yep, the commissioners did not know what they were signing. Even so, commissioner Mike McAuley had the gall to tell the public that they did not have to run their agreements past citizens.

Many specifics are shocking: The land is being sold for $20 a square foot - probably less than your residential property is valued and taxed. (My residential lot with no view is valued at $29 a square foot.) It is a sellout of our valuable waterfront to a foreign developer who has set up a shell company to buy it.

Chmelik spent time trying to explain the weird sale process - just as he tried for the KAP properties 25 years ago. As with the KAP explanations, this involves big money for the port. What could go wrong? Well, Harcourt could lease to other shell companies - and leave the port hanging for the entire amount. The port has learned nothing over the years. Someone in the audience even asked about KAP and Chmelik replied, “Well not precisely like KAP did, and that was a long time ago.” So he knows. And so do I. The port, and we, are being taken to the cleaners.

What can we do? Nothing. We elected these guys. They voted and signed the authorization this evening. The deal is done. The best 18 acres of our waterfront has been sold for peanuts to a shell company formed 6 days ago by unknown persons. (see screenshot at bottom of article)

But we citizens can do something about the future. We can expand the port commission from three to five commissioners - and bring more minds to these decisions. No corporation has a board of three directors - nor does any city council. We eliminated the three member county commission in 1978 because of incompetence in managing our county. It is time to expand the port commission to five commissioners and end the incompetence. For that is what this is.

I realize this description of the process is confusing. It is hard to explain how a scam works when you are watching it unfold. Scams are by their very nature complex, as that is how to fool naive elected officials. Over the next couple weeks I will try to provide more explanation. Plus more about KAP.

One last point. At the end of the 5 hour meeting the commissioners inadvertantly let slip why they signed: they wanted to go forward and this was all they had. They did not want to wait any longer. Watch the last hour of the video for this and some amazing insults to citizens, corrections of commissioners by Chmelik and more. Let's preserve this video for the future.

The video of the meeting is linked below. Here are a few noteworthy moments. For some fine comments by citizens, watch earlier portions of the video. If anyone wants to annotate when different citizens spoke, I would love to post that.

4:14:50 - Mike McAuley lectures citizens on how ports do not accept citizen input

4:17:40 - Jim Jorgensen rebukes citizens for comments and picks an argument

4:42:30 - Chmelik tries to explain the convoluted sales terms - shades of KAP

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About John Servais

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

John started Northwest Citizen in 1995 to inform fellow citizens of serious local political issues that the Bellingham Herald was ignoring. With the help of donors from the beginning, he has [...]

Comments by Readers

Tip Johnson

Apr 01, 2015

Please also see The Gristle at http://www.cascadiaweekly.com/

Tim Johnson nails it. Perfectly.

Much as I would like to see the Grainery rehabilitated, sooner than later, this deal does not pass the smell test.  Not even close.

I believe it is time to petition for a forensic investigation.  This “deal” will have longstanding ramifications for the future of our waterfront and public finances.  It was concocted out of continuous public deception, including a structurally rigged environmental review, falsified documents, cleverly evolving exhibits and a completely phony public process.

The consistent lack of public benefit and the Port’s agile bending over forward to accommodate a phantom developer has all the hallmarks of a shady deal with plenty of behind the scenes accommodation.

This is worthy of the attention of the Attorney General and the Justice Department.  It wouldn’t be the first waterfront redevelopment to result in indictments.

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Thelma Follett

Apr 01, 2015

Dear John,
Thank you for this excellent reporting job.  I have downloaded the 200 page contract to read. My sister, Carol, has been talking plenty bout this scam this week. I will get back to this post after I read the documents; but, in the meantime, I suggest that there is plenty we citizens can do!  And lawsuit comes to mind as the very first thing we can do. 
The only drawback here is that the Trans Pacific Partnership (partners in crime) may render all we try to do to rein these gangsters null and void. Do not forget that although the public is being fooled into thinking that they can stop Fast Track, the Obama mis-administration has made it very clear that TPP is already a done deal. See “National Security Strategy,” February, 2015.  This document outlines a global In-security strategy which benefits only the corporate criminals. 
Anyway, the citizenry still has lots of power, especially when we have dedicated reporters (John Servias and company).
Thanks!
Thelma Follett

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George Dyson

Apr 01, 2015

When it takes over a year of secret negotiations to sell off the very best (and cleanest) of the land to foreign interests for next to nothing, while leaving the local taxpayers on the hook for hundreds of millions of dollars in cleanup, infrastructure, permanent environmental monitoring, and the inevitable future litigation costs, you are left wondering: who’s minding the store??

PS: What happened to all the profit from land sales that was going to pay for the new marina? Remember—there is NO insurance coverage for cleaning up the ASB. The Port alone (at our expense) is liable for the entire thing.

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Gaythia Weis

Apr 01, 2015

I think it is worth noting this bit of additional information on Harcourt, the Irish company that we are presuming to be a liability shielded parent of Harcourt Bellingham LLC.  See: http://www.irishtimes.com/business/commercial-property/harcourt-goes-offshore-ahead-of-nama-exit-1.2109895.  This also mentions Pat Power, who I believe was the Irish accented voice presumed to be at the other end of the video conferencing line during yesterday’s Port meeting.  Nana is an Irish agency set up after their banking debacle presumably to rescue IRISH companies.

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Gaythia Weis

Apr 01, 2015

I attended a “special ceremony” yesterday???
http://www.irishtimes.com/business/commercial-property/harcourt-to-sign-15m-us-port-deal-1.2149108

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Michael McAuley

Apr 01, 2015

Thanks for the coverage John.  I will be at Cascade Pizza with folks this Saturday at 6pm to discuss.  So far we have three confirmed people and I’d like to get at least ten so we can take over a big table upstairs.  Anyone who wants more info please come.

If people here would like to dialog here and can’t come I will certainly share whatever info folks would like to hear about.  I am deconstructing a kitchen at work today but I will check in here periodically.

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Walter Haugen

Apr 01, 2015

A scam on a waterfront with shady Irish characters and shell companies hiding the real money flows. Reminds me of “The Long Good Friday (1980),” my favorite Bob Hoskins movie. It also features Helen Mirren and a very young Pierce Brosnan. When I read in the Herald about someone nailed to the floor of the Granary by their knee cap, I will know Bellingham has made it into the big leagues of corruption and vice.

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George Dyson

Apr 01, 2015

A useful and wide-ranging discussion recorded on the eve of the vote (with Commissioner McCauley, Tim Johnson, Frances Badgett) is listenable here:

https://www.mixcloud.com/KVWV_CommunityRadio/hour-of-the-wolf-news-march-30th-2015/?utm_campaign=notification_new_upload&utm_medium=email&utm_source=notification&utm_content=html

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George Dyson

Apr 01, 2015

And a photograph of the building valued at *negative* $500,000.00 (the otherwise non-compliant footprint rights are worth many *positive* multiples of that):

https://www.facebook.com/photo.php?fbid=10153228061719626&set=o.180670508794347&type=1&theater&notif_t=photo_comment

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Abe Jacobson

Apr 01, 2015

Thank you for running this story. In a town without a real daily paper, we rely on the blogs for basic information.

Elections have consequences. Since Blethen running against Walker, and Johnson running against Walker before that, there has not been a Port commission candidate whom I trusted to work for my values and who also was seriously engaged in winning the election.

More recently the right people have shunned running for Port Commission, and the wrong people have prospered by default. Robbins, a most implausible candidate in 2013, won because his opponent was a new arrival in town who (a) was utterly unknown and (b) had no knowledge or interest in things port-related. (In fact, the only thing that stood out in her CV was that she was a New York banker and, having grown up in Communist Poland, had acquired a dislike of Communism. That’s it; that’s all, however irrelevant.)

Elections matter.

Abe Jacobson

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richard jehn

Apr 01, 2015

Has anyone actually looked at the big Belfast development that Harcourt is “famous” for?  Gack!  If that is what we get on the Bellingham waterfront, woe is us.  Here is a Google search for pics of the Titanic Quarter in Belfast:  https://www.google.com/search?q=pictures+of+titanic+quarter+belfast&tbm=isch&tbo=u&source=univ&sa=X&ei=fpwcVeHNHta7ogSV4YGIBw&ved=0CB4QsAQ&biw=1920&bih=934

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Michael McAuley

Apr 01, 2015

After five years learning about Washington ports I have noticed it might be useful for many readers here to get a better understanding of what the legislature intended for ports to be a hundred years ago.  I would love to engage anyone interested in that conversation as well. 

And, yes, Abe elections do matter.  Get me another vote.

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George Dyson

Apr 01, 2015

I voted (and campaigned) for you, Mike, and was stunned that you supported this irreversible decision. You could easily have deferred to UNANIMOUS and (with only one or two exceptions) carefully thought out comments by people who have spent years devoted to the public good, and had only 5 days notice to collect their thoughts in response to this agreement. You could have easily asked (even as the minority of record) to stall the process even 2 weeks to give some of the highly questionable terms a second look. FIVE days is not enough. There would have been no downside, only upside to the Port (and the public) in this.

Your position that Ports make real estate deals all the time without taking public input doesn’t hold up when the Port is taking 300 million plus dollars in public money to close this particular deal. Without this public money, Harcourt would never have come to the table. That says something right there.

About Titanic Quarter, did anyone talk to citizens (not Harcourt employees or contractors) of Belfast about this? I have a friend who grew up in Belfast, maintains close ties there, worked (as a consultant) with the Port of Everett on their (uncannily similar, if less contaminated—no mercury cell chlorine plant) mill site waterfront redevelopment, and he said, run, don’t walk, as far as possible from this deal.

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Doug Karlberg

Apr 01, 2015

Commissioner McAuley has it right when he states that the Port does not have to have a public hearing on a real estate sale. He has been listening to the Port’s attorney too long. The Port’s attorney has been the hidden, but powerful voice in every meeting closed to the public, and has been for decades.

The Port’s attorney was taken to the wood shed by the now bought off or missing Bellingham Herald Editorial Board the last time a Port Commissioner got caught with their hand in the cookie jar. In essence the Herald told the Port that while some act may be legal, the Port has to do more that what is simply legal to maintain public trust, as the public’s trust is what keeps the Port in business.

The Bellingham Herald never allowed a single Letter to the Editor on the largest public gamble in Whatcom County’s history – The selection of Harcourt as the Master Developer. The Herald has failed it public trust responsibilities under Executive Editor Julie Shirley.

McAuley’s explanation that the public can hold Commissioners accountable at the ballot box is a simplistic response at best, especially when making long term decisions which burden the public with debt that long outlasts the day when a Commissioner is tossed out by the voters.

Another critical reason for public input, is to allow them to feel heard periodically by their elected representitives, unless one does not want to hear from the very people which own the Port of Bellingham.

If the Commissioners are tired of people not showing up to tell them what a wonderful job they are doing and how much they are loved, then maybe this criticism is sign that you have misjudged the publics priorities and values.

I call this valuable feedback, if you care to really listen. Unless one has all the answers, and makes no mistakes, feedback from the public can help reduce risks of making mistakes, and truly understanding the public’s desires.

Everyone makes mistakes, but I cannot remember the last time that the Port admitted a mistake, or told someone in the audience that they have made a good suggestion, and then actually changed a plan and implemented a public suggestion.

If you just look at the public record of the waterfront, it is very difficult to find substantive changes that were suggested by the public.

The Port has been more respectful of Port staff or outside consultants’ suggestions, yet the fact is that this whole plan is financed by the public, not by Port Commissioners or staff.

This last ten years at the Port have been tumultuous, and the Port does not admit a single responsibility for this turmoil. This is a sign of an internal flaw rather than a problem with the public.

McAuley is not a financial expert, and does not understand that the public is being mislead by Port staff and its advisors.

I pointed out last week that the Port’s math was incorrect on a realistic expected timeline for getting this land finally developed.. I reiterated this at the Port meeting last night.

The Bellweather which is managed by the Port and in the same neighborhood as the Waterfront Redevelopment, which is 275,000 square feet and took 30 years to develop.

This is 9,166 square feet per year.

The Port claims that Harcourt will develop 1,000,000 square feet by 2034. (Youtube 3:12.15)

If the Port’s past performance on the Bellweather is a reasonable guide, it will take 109 years to develop the Waterfront!

I brought this to the math error to the Port Commissioners attention this last week, and even when cornered in a public meeting, not one Commissioner insisted that this glaring math error by corrected.

The Port can admit no wrong. 2+2=4, except at the Port.


The second financial error of the evening is the exchange between myself and Mr. Fix. Mr. Fix failed to tell the public two weeks ago, and even failed to tell at least one Commissioner that the public was offering to finance Harcourt purchase of this land. Mr. Fix gave a long speech about how little the Port gets on its’ investment. (less than 1%).

I mentioned that the Port was using the wrong number because the Port has borrowed over $50,000,000 and pays close to 4% on this money. He gave a complicated answer which in short means that he cannot pay down this money because it is a bond and cannot be paid off early, so the 2.71% interest the public was getting from Harcourt was a good deal for the public. He used the same rationale for buying the ballroom last year.

I did my homework and this is dead wrong, the Port can indeed pay down debt currently at 4%.  While Fix is technically right, what he is not telling us is that an organization can buy their debt on the open market through a financial vehicle called a sinking fund, which goes into the open market and buys back their bonds.

The Port’s money costs approximately 4%, and the Port is trying to tell us that obtaining 2.71% from Harourt is a good deal. God he must think we are dumb.

The icing, and real stunner is that Mr. Fix indicated that the Port of Bellingham does not have much debt compared to other ports like the Port of Everett. I checked the finances for the Port of Everett and the Port of Anacortes and I was stunned to compare them to Bellingham.

The key to reading these port financial statements is comparing equity versus debt. Just like your house. I divided net assets by net liabilities at all three similar medium size regional ports. This ratio gives us a rough picture of how many net assets above debt that port has. The higher the number the more conservative the port is being operated.
Here are the results:

Port of Everett 3.75
Anacortes 1.75
Port of Bellingham 1.26

Can one find port with higher debt leverage? Yes, but most of these are very, very large ports with lots of reliable, and diverse streams of revenue. Not most of their liabilities tied up in a polluted piece of waterfront, with only one bidder.

On this waterfront redevelopment we are taking on a lot of debt, don’t let Mr. Fix fool you. Look at the Port of Everett, which has 200% less debt than the Port of Bellingham.

The Chief Financial Officer at the Port of Everett used to be the CFO at the Port of Bellingham. He left about the same time the Port of Bellingham bought the GP mess.

The Port of Bellingham is trying to convince us that paying all our cleanup bills upfront and delaying payment for the sale of land over time is winning strategy. The problem I have is that in every textbook I have read on accounting, suggests this is backwards. Usually you speed up payments from customers and delay payments for expenses for as long as is possible.

I get the distinct feeling that the Port is peeing in my pocket and trying to convince me that it is really raining.

The Port staff told the previous appraiser that there were 75 developers interested in bidding for this land. When the Port only really got one bidder, they should have postponed the auction then. In fact if we only have one bidder; is it still called an auction??

Commissioner Jorgenson whined that everyone was complaining and nobody was giving any love to the Port for all the hard work that had gone into this proposal from Harcourt.

Commissioner Jorgenson, if I hire a plumber to plumb my bathroom, and when finished I flush my toilet and water comes out in my sink, it is hard find a lot of love. The quality of workmanship matters, and if the plumber only gives me three minutes to complain before he rudely rings a bell, well don’t be surprised if you do not feel the love.

At least you are getting honest feedback!

Mr. Jacobson, I backed Renata because she also had a Bachelors degree in accounting and a MBA from one of the most prestigious universities in the world, also with an emphasis in accounting.

I thought she had the right skills that were needed at the Port of Bellingham. The voters disagreed, but they might want to reconsider, after they have read this.

We only had two choices and clearly Robbins is being led by the nose by Port staff and old unrealistic dreams.

Let’s see if the Port can learn to admit errors, or even, God forbid, alter plans that are not adding up. This would be good. (Commissioner McAuley, changing a bad plan is not called erasing, it is called being realistic and prudent)

I am not holding my breath that the Port will learn to appreciate public input, but one can hope.

PS, I am sure that Mr. Fix will want to point out that many of our Port’s liabilities will eventually be covered by grants. Guess what, these other ports are getting grants too, competing with Bellingham grants which are not guaranteed. I wonder what will really happen when our Port applies for the cleanup grant for the marina. Other communities competing for these limited grants might point out that this marina grant is only going to produce one permanent job per million dollars spent, so that the “well to do” can have a nicer place to store their yachts.

Might find that the Port has to clean up the marina without grants, which will cause our property taxes to go up to finance the new yacht harbor.

Hang on, this financial mess is just getting started.

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Michael McAuley

Apr 01, 2015

George, et al, not one person in the five years I have been on the commission has given me a single, achievable idea, including you.  If ya’all want me to go and completely marginalize myself a la Ted Cruz then ya voted for the wrong guy. 

This waterfront was designed by others to be an urban infill project, I inherited their plan.  I got the log pond off the tale so it remains industrial. I got the marine trades land off the table so it remains marine trades.  I am the only voice arguing for the port to do it’s damn job and correct the deficiencies in the Whatcom waterway.  I am the only commissioner pushing for more and better economic development efforts. I am the only elected member of the county EDI arguing that EDI funds must have job creation accountability.  I am the only commissioner working on a solar farm at the airport and the only one working to help ensure we have the airport be a better neighbor, including making changes to the county comp plan. I am the only commissioner trying to get our feet wet in a job creating biomass project in the east county. 

But you don’t you folks don’t want to hear that.  You want me to somehow single handheld fix a problem created half a decade before I was elected. A problem created by not less than 11 other elected people. 


The characterization of Renata Kowalcyzk here was also very off base.  I have come to know most and befriended some of the more than 230 port commissioners in this state and she would have been one of the best among all 75 ports.  As TP references regarding my own reelection efforts I hit every single target my campaign set, every one.

If anyone here can do better then step up.  There is a seat open this fall and two more in two years. 

Now, should any of you choose to actually learn about the port rather than read sideline commentary then you let me know, I will tell you everything you want to know.

6 pm Cascade Pizza this Saturday.

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Michael McAuley

Apr 01, 2015

Doug, I said it poorly, but there is no govt in this state that negotiates real estate transactions publicly.  That is designed to protect the public interest so they don’t get screwed by speculators.  We held a public hearing to change the schem of harbor improvements t surplus the land that has been intended for sale since 2005, we heldublic meetings after a very public proces to begin a “private” negotiation with Harcourt on the deal points, just like every single other transaction the port and every gov’t here makes.  Did anyone not know the land was for sale? Or that we were were talking with Harcourt about purchasing?  Do your elected officials have to ask your permission to do the work you elect them to do?  Ask the legislature what a joke it is that every tax change they need to make is voted on by citizens that have no clue regarding the change - you either trust us to do the work or you don’t.

The port and city took on a project that will cost hundreds of millions of tax dollars to finish.  There is no way land sales can solve that problem.  It’s not a secret, I have been agreeing with you for five years.  No court will require GP to take the land back or do any more than the agreements that were made.  The city has only so much to build parks. Ecology and the state have only so much to offer for cleanup.  The port can’t borrow enough to fix every deficiency folks feel is in the master plan.  The property is only worth what someone will pay and only one someone showed up to make an offer.

We are not likely to get a $45 million dollar grant from the state for the ASB, I have asked the staff for the past five years to quit pretending we have. 

We can waste ever more of our time talking about history but I know you all are smarter than that.  I never met a leader in the marine corps who gave a rats ass about advice that wasn’t a solution and if ya wanna help them help, I have three years left to try.  So far all I hear is noise about history.

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Michael McAuley

Apr 01, 2015

And bash me all you want but you have never had any other port commissioner willing to engage here, yet here I am.   

John, the port had a public hearing about the sale of land, you are wrong,

$800 thousand an acre is not peanuts.

If Harcourt fails on either of the first two projects including the timelines they are out, deal’s off.

Developers in every city create LLC’s to get individual financing, sometimes even for individual buildings in a multi-building project to protect the parent company. It’s done every day, even across Bellingham.

I didn’t inadvertently let slip my reason for signing, I told you why, straight up.

Someone please tell me how we are being taken to the cleaners?  Cuz The 11 Electeds who made this deal ten years ago were wrong and Harcourt won’t pay a half billion for the property?  Do we not know that.  Does anyone doubt that the taxpayers cannot recover 100% of the inputs here from land sales?  Great,  keep saying that over and over and over and you still have no solution.

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Doug Karlberg

Apr 02, 2015

Mike,

Please do not take this personally. I love having you for a Port Commissioner. When folks refer to the Port with criticism, they are not referring to you personally. Being the lone, sane vote, in some cases is frustrating and lonesome, but trust me, you have a lot of support and friends. Remember the two packed Commission meetings for Charley Sheldon?

That doe not mean that I agree with everything you do, but when I do have differences I try and lay out why I disagree politely and not personally attack folks.

The courage you have shown, dissenting at times with the other
Commissioners and staff, is not only commendable, but a rarity in today’s political environment. You have been the single most approachable Port Commissioner in my lifetime.

Maybe that is why you keep getting re-elected.

You are confusing negotiating in private versus having a public hearing after the negotiations are concluded.

Nobody is asking that the Port negotiates privately, but whether you intended to or not the audience may have read your comments as to say the Port is not legally bound to have a public hearing once negotiations are completed.


When the Port got only really one bidder for the Waterfront, that should have been a red flag. I came to the Port meeting and said so. Now you keep referring to Harcourt as paying $800,000 and acre. This is not true. They agreed to, but there is zero penalty if they do not. Until the Port actually sees a check for polluted land for this amount, we are speculating. Buying the only two parcels which did not have pollution on the cheap, was relatively risk free. Let me know when you actually get a check for the polluted land for $800,000 an acre.

As we can now see with your public admission that the Port’s original plan that the sale of land would pay for the clean up is failing, you are leading again.

This is the first time in ten years that a public official has admitted to the public that the original plan may not work.

The public should have known this years ago, and the Port has hidden this from the public. Hiding critical information on a project of this size is inexcusable. Deception by silence when there is a duty to inform is mighty close to the line on fraud. It may not cross it, but it bad public policy and certainly violates public trust.

It is one thing to stop telling people that the plan will pay for itself, and quite another to make an affirmative statement that the original plan that we told the public will not work. Silence is not a statement.

Leading is lonely sometimes, but you are a Marine.

I have written at length WITH SUGGESTIONS ,for things to change, but if the public is not told that the original plan is failing in some very critical areas, then the public is being stripped of their right to comment, and this inhibits “erasing” or changing the plan for the better.

I am not going to go through a list of items that were suggested changes, but I will highlight a couple of items.

The Port staff not consulting with Mr. Jim Long, who is the only public official who has successfully developed a project four times this size, is pure negligence. What is stopping you now from consulting him? He knows our community well. The Port is paying all kinds of consultants, who do not live here.

The ASB needs to be re-considered, as this plan is not working. We may need to develop the ASB as industrial job producing land, just to save the Waterfront Development and all its housing, with no demand.

Get your quote that the original Port plan of paying for the clean up with land sales, may not work, into the Herald. To not do so, violates the public trust in my opinion. This will change the course of this project now, while there is still time, before the Port takes us over a cliff with stubbornly refusing to change any plan that clearly has errors that are apparent now.

Now, I am pleading with you to give me your Pinocchio rating on Mr. Fix’s and my math issues. I laid this out in public, and while not enjoying criticism, it is only fair that my numbers and math are subject to public scrutiny.


Contrary to Port policy, if I make a mistake, I will admit it, apologize, and change my thinking when I admit my errors.

Honesty is simple, it is misleading and manipulating that is complicated. (not you personally)

 

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Doug Karlberg

Apr 02, 2015

Oh by the way, let me correct you and Mr. Fix. The 11 government officials who inked this deal to clean up the Bay, was a different agreement than the one the Port is going forward with.

Get the history correct. Mr. Fix always neglects to mention that 14 elected official signed a different plan, and the Port blew it up, to save the marina. If it was not for the damn marina, I doubt we would be going through all this angst.

Ironically, I doubt the marina will ever be built.

This is our Port.

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George Dyson

Apr 02, 2015

Mike—I wasn’t condemning your tenure as commissioner. You were great, for instance, in the Charlie Sheldon fiasco, and in calling out the ongoing barge terminal bait-and-switch. I’m only speaking about not putting some brakes on the rush to sign this agreement without the public getting a genuine chance to weigh in on it.

Several of us made a very reasonable, achievable suggestion at the meeting (and before). Give this agreement more than 5 days notice before taking token public comment and signing it. The Port spent over a year, with several extensions, in negotiating it, so time cannot be that critical—30 days or so would not have been the end of it. You can bet the owners of Harcourt (and their creditors) took a good look at it before signing it, and the owners of the Port of Bellingham should have got a look at it too. You are signing generations of Whatcom County and Bellingham taxpayers on to paying huge, ongoing costs for this—and forgoing revenue that could (still, not dragging up history) have been captured by approaching this differently.

As to how to develop the site more sensibly and more profitably (and more to the benefit of existing businesses) again, many achievable suggestions have been offered, but not listened to. To your credit, however, most of the achievable goals were articulated more than 5 years ago, by groups such as RUDAT, Waterfront Futures Group, etc, whose plans were shelved, and by individuals who gave up trying to influence the plans after not being listened to.

The Port started this process by hiring Collins-Woerman, and just did not give up, and did not listen, until they had pushed the Collins-Woerman plan through. This plan was already long out of date and based on an economic model that no longer exists.

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George Dyson

Apr 02, 2015

Also (in terms of achievable goals) note that on almost all the lovely drawings that were shown in the Port’s Powerpoint presentation, there are beautiful green spaces, roadways, and buildings, but NO DOCKS.

Generally, Cities build roads and Ports build docks. In the current plan (and especially in the Interlocal Agreement) the City has agreed (with very strict timelines) to build certain roads, but the Port has not agreed, under any timeline, to build any docks. This is wrong.

Chances are good the Port will say, “Well, the visitor’s docks, if any, will have to be in the new city-funded waterfront park, and the city will have to build them if it wants them.”

It’s crazy that specific responsibility for construction of specific docks is not laid out in the plans, the same way we have laid out the roads. Especially because the cleanup and dredging will be happening first, and SHOULD be taking into account where there will be docks. Permitting for docks takes a long time, and if the Port wants this redevelopment to flourish, this is part of the immediate job.

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Sandy Robson

Apr 02, 2015

Below, is a comment I posted back in February 2014. I’m not sure if it was a post I made on Facebook or if it was in the Herald online comments under an article about the Port and Harcourt. I thought it might be relevant to the discussion. Below that, I have added a Facebook comment thread from yesterday with Mike McAuley.
Here is the Feb. 2014 comment from the Herald comments:

“In looking at Harcourt’s website they don’t seem to have any U.S. office. Isn’t that concerning in terms of any potential litigation problems that might arise during and after the construction, and the complications of dealing with a firm that is not based in the U.S. and does not even have an office in the U.S?

“In the comments under an online Herald article (from a number of days ago) Port Commissioner Mike McAuley said they reached out with RFPs nationwide but only received 3 proposals. I can’t imagine that only 3 firms would be the total number wanting to bid on the project—-it seems odd and unlikely that only 3 proposals resulted from the Port reaching out ‘nationwide.’

“Why is a Dublin-based company with no office presence in the U.S. responding to RFPs from the Port that were, according to McAuley, solicited ‘nationwide’?

“Below are some articles about Dublin-based Harcourt Developments Ltd”:

http://www.casinocompendium.com/archive/harcourt.html

http://www.independent.ie/irish-news/solicitor-settles-multimillion-euro-lawsuit-with-developers-26494180.html

http://connection.ebscohost.com/tag/HARCOURT+Developments+Ltd.+—+Trials,+litigation,+etc.

Fast forward to the Port Commission’s approval of the Harcourt deal this week. Yesterday, I called the Port office and confirmed with them that Mike McAuley had indeed voted yes to approve the Harcourt deal. Then, I went onto Mike McAuley’s Mike For Port Facebook page and posted a post to the page (it goes onto the section “Posts to Page” not the main page feed). Below, is the thread of comments between myself and Mike. Even though Mike took the time and effort to respond to me, which I appreciate, the thread discussion didn’t make me feel better about Mike’s, and the rest of the Port Commissioners’ decision, to approve the contract with Harcourt.
Here is the thread:

Sj Robson
“Mike M: I supported your campaign for Port Commissioner (not monetarily). I know that you do a lot of good things, but I am so disappointed to learn that you voted yesterday for the approval of the Harcourt Developments deal for the Bellingham Waterfront.
Can you please explain to me why you voted yes on such a bad deal for Bellingham?”

Mike for Port of Bellingham
“First I need to understand which part you feel is a bad deal for Bellingham? There is a great deal if misinformation being shared so let’s discuss.”


Sj Robson
“Thanks for your prompt response. What I would like to know is what made you vote ‘yes.’

“My first concern is that the deal is with a Dublin-based developer that I have read numerous articles regarding some projects Harcourt has had problems with and lawsuits that resulted. So, when there are potential legal problems that might arise with the Bellingham waterfront project and Harcourt, the city is dealing with a company based outside the U.S. That is very complicated.

“I don’t think that the reason people think this deal with Harcourt is a bad deal is because there is “a great deal of misinformation being shared.” The many people who have been critical of this deal with Harcourt seem to know the facts about it and are very smart. I don’t believe that such a large number of people would be against the Harcourt deal with the Port if it were simply a case of ‘misinformation.’

“That kind of response from you, saying ‘there is a great deal of misinformation being shared,’ is reminiscent of how SSA Marine and it’s public relations experts deals with public criticism on the GPT project. Sorry, Mike, but that’s what it reminds me of.”


Mike for Port of Bellingham
“Thanks SJ. I ask because a simple statement about this being a bad deal isn’t helpful in explaining ‘why’ it’s a bad deal. 

“It looks like the issue you have is with Harcourt and their ability to perform. The deal we habe with Harcourt is laid out such that if they fail to perform the deal is off, completely. There is no loss to the port. Now, could a super sharp lawyer find wiggle room to suggest otherwise? Yes, and we have contingencies built in to manage that as well. 

“To ensure they perform they only get access to the Granary and one other parcel for now, if that goes as designed then they can continue. If they fail, the deal is off.”

Mike for Port of Bellingham
“Harcourt’s history is well known. The port’s executive director looked at their financial situation and spoke with some of their bankers and Irish officials about the company while he was on a due diligence mission in Ireland finding nothing extraordinary to be converned about regarding their ability to perform here.

“The vetting process to select Harcourt was done by a committee of port, city and university staff and officials. It was not a secret process nor simply managed by the three port commissioners, in fact we on the commission kept the selection process as open and broad as possible so it wouldn’t seem just the three of us were deciding. Once Harcourt was chosen the port entered negotiations on the deal points leading to the deal we struck last night.

“But, again, we built in safety measures to protect the public interest. If Harcourt fails to perform they lose their rights to the property.”


Mike for Port of Bellingham
“The misinformation mostly surrounds the idea that the entire process was secretive. The only part done behind closed doors is the financial part - every single transaction the port, or any gov’t makes in this state, is done behind closed doors. It is, by design, not a public process and that, for all it’s faults, is to protect the public from speculators taking advantage of the public when they know a land deal is being discussed.”


Sj Robson
“Mike: You wrote, ‘The misinformation mostly surrounds the idea that the entire process was secretive.’ To me, that explanation to my question asking you to specify the ‘misinformation’ you made a reference to, does not rise to the level of your original statement that there ‘is a great deal of misinformation being shared.’

“It seems like a general statement which can deflect from the issues or question/s at hand. I appreciate you taking the time to discuss this with me, we are both busy, so I won’t take more of your time, or my time on this. I will just say that I remain very disappointed by your vote to approve the deal with Harcourt as your responses did not give me reason to change my mind. Thank you.”

 

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Tip Johnson

Apr 02, 2015

RCW 53.08.090
Sale of property.

(1) A port commission may, by resolution, authorize the managing official of a port district to sell and convey port district property of ten thousand dollars or less in value. The authority shall be in force for not more than one calendar year from the date of resolution and may be renewed from year to year. Prior to any such sale or conveyance the managing official shall itemize and list the property to be sold and make written certification to the commission that the listed property is no longer needed for district purposes. Any large block of the property having a value in excess of ten thousand dollars shall not be broken down into components of ten thousand dollars or less value and sold in the smaller components unless the smaller components be sold by public competitive bid. A port district may sell and convey any of its real or personal property valued at more than ten thousand dollars when the port commission has, by resolution, declared the property to be no longer needed for district purposes, but no property which is a part of the comprehensive plan of improvement or modification thereof shall be disposed of until the comprehensive plan has been modified to find the property surplus to port needs. The comprehensive plan shall be modified only after public notice and hearing provided by RCW 53.20.010.

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George Dyson

Apr 02, 2015

Port claims (and legally they are right, though in a common sense way being pretty devious about it) that the subject properties had already been legally surplused through being referenced in the legally adopted comprehensive plan of harbor improvements that incorporates the City Master Plan (or maybe the other way around—yet another case of Port staff writing documents for formal adoption by the City; the tail is wagging the dog).

More relevant, ethically if not legally:

RCW 53.20.030 Improvements—Ownership of

“No improvements shall be acquired or constructed, by the port district, unless such improvements shall, when completed, be the property of such port district, the county in which such port district is located, any city within within such port district, the State of Washington or the United States of America….”

The legislators were specifically hoping to preclude eventualities such as hundreds of millions of dollars of taxpayer improvements (like cleanup) to Port property being sold off for private gain. Again, the Port has a sound legal position on this, but, the moral answer is that the transfer of these public assets (even if intangible, like cleanup, upzoning, or impact fee exemptions) for private gain is suspicious if not wrong.

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Michael McAuley

Apr 02, 2015

I appreciate the kind comments.  I don’t expect to keep all interests happy all the time even tho I sincerely wish I could.

Tip, the property was surpluses properly when we updated the harbor scheme of improvements which I asked specifically about in our meeting and was answered by Ms Goodwin.  Not one person showed up to protest that.

Every single part of this process was open and transparent. Did things change? Yes.  Where it started could never be where it ended because so many assumptions were wrong at the beginning.

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Michael McAuley

Apr 02, 2015

SJ…..I don’t mind you sharing our conversation from my FB pages but it is polite to give one a heads up.  I prefer to speak as honestly and frankly as possible but if there are gonna be “gotchas” involved, well, that does give most people pause.

As I said there to you, if you have a question please ask it.

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Tip Johnson

Apr 02, 2015

Hey Mike,

I already have a PD request in the works, so hate to start another before it’s concluded.  Are you saying that you held a hearing declaring the land surplus to the Port’s needs at the time of the amendment of the ‘Scheme’, or are you saying that identifying it as for sale in the ‘scheme’ is the same thing?  If so, why was the surplussing resolution adopted the other day?  Are you saying that if you identify the property as for sale in the ‘scheme’ and hold a hearing for the ‘scheme’ that you don;t need a hearing for the surplussing?  Just trying to figure out what you mean because I think the ‘scheme’ has a lot of other content and the ‘scheme’ hearing is for that content comprehensively and not a substitute for the requirement that a hearing be held for surplussing property. It’s a bit like hiding a pork-barrel provision in a budget adoption.

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George Dyson

Apr 02, 2015

Tip—I looked into this one in detail. By my reading of it, they are technically correct: the comprehensive plan can be interpreted as having declared the property surplus, and therefore it can be sold by simple resolution (as was passed on Tuesday). Morally, of course, is a different question, but this has never been the strong suit of the Port. And, as you (“Steal This Waterfront”) well know, there were very strong objections voiced all along the way to maneuvering the less contaminated property to be sold off to private interests, with the liability for all the remaining contamination being left behind for the taxpayers to pick up the tab.

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Sandy Robson

Apr 02, 2015

Mike McAuley: regarding your comment to me today here on NWCitizen—
Our Facebook thread discussion I shared here was on your public “Mike For Port” Facebook page. It was not from a private message or an email. There was no reason why I would think that it was/is private, and that I should give you a heads-up before sharing it.

I also do not see anywhere in my comment I posted here this morning that there were any of what you refer to as “gotchas.” I’m not really sure what you are referring to in saying that.

My comments in the Facebook thread between us were respectful, even though I disagreed with your “yes” vote on the Harcourt deal. I know I was careful in terms of what I said and how I said that to you, because I considered myself a supporter of yours from when you ran for Port.

I really do not appreciate you saying some of what did in your comment to me here on NWCitizen, which could give readers the impression that you and I were having some kind of private Facebook discussion, that I then shared without giving you a courtesy heads-up, which is certainly not correct.

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Marian Beddill

Apr 04, 2015

The video of the meeting about the Harcourt deal, has been removed from YouTube.

( https://www.youtube.com/watch?v=F5YqkBJ2bug )

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George Dyson

Apr 04, 2015

Or maybe it just moved to here:

https://www.youtube.com/watch?v=QiQrUgUNxkE

3.5 hours—it’s a classic, the Ben Hur of Port Commission meetings!

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Tip Johnson

Apr 04, 2015

http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=9494

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