WAFed’s best option: Accept City’s offer on Chuckanut RidgePermalink +
Sat, Nov 06, 2010, 11:22 am // Larry Horowitz
For those who’ve been following the Chuckanut Ridge / Fairhaven Highlands issue with interest, regardless of which side you’re on, I believe all of us are ready for it to simply go away. Fortunately, Washington Federal is in a position to do just that.
With that in mind, a few days ago I sent a memo to WAFed Sr. VP Tom Kenney who serves as the bank’s Northern WA Regional Executive and oversees Horizon Bank’s former operations. I explained to Mr. Kenney why many believe the actual development value of Fairhaven Highlands is well below what WAFed may perceive it to be, and I suggested that accepting the City of Bellingham’s offer is likely the bank’s best option.
If you’d like some background information, feel free to select “Chuckanut Ridge” under the “Categories” search tool above where you’ll find 32 previous articles published on this site.
Here’s my memo to Tom Kenney:
From: Larry Horowitz, Concerned Citizen, Bellingham, WA
To: Tom Kenney, Senior Vice President, Washington Federal
Jim Doud, Board member, Washington Federal
Roy Whitehead, Chairman, CEO & President, Washington Federal
Jack Jacobson, Executive Vice President, Washington Federal
Cathy Cooper, Senior Vice President, Washington Federal
Richard Evans, Case Manager, FDIC
Jim Miller, Attorney, FDIC
Dan Pike, City of Bellingham Mayor
Barry Buchanan, City of Bellingham Councilmember
Michael Lilliquist, City of Bellingham Councilmember
Jeff Thomas, City of Bellingham Interim Planning Director
David Bricklin, Bricklin & Newman, LLP
Re: Fairhaven Highlands: Throwing good money after bad… Or … Why Fairhaven Highlands is dead in the water
Date: November 1, 2010
Dear Mr. Kenney:
I certainly appreciate that Washington Federal is doing its best to minimize its loss on the Fairhaven Highlands property it now owns as a result of WAFed’s FDIC-assisted acquisition of Horizon Bank. Unfortunately, it’s clear to many of us who have closely followed this project for more than five years that Washington Federal is prepared to throw good money after bad on a project that is dead in the water.
As you know, the Fairhaven Highlands application has secured absolutely no entitlements to date. Not a single permit has been issued from any of the agencies that have jurisdiction. Although it’s difficult to determine the rationale behind WAFed’s current strategy, I suspect the bank is following guidance you have received from the attorney who previously advised Greenbriar NW Associates (GBNW), the joint venture between Horizon Bank and David Edelstein’s Greenbriar Construction, which actually owns the property.
It is likely this attorney has told Washington Federal that, although there have been no entitlements actually secured, the development application is vested under five-year old laws that enable the project to proceed with minimal environmental regulations. I suspect this attorney has informed the bank that there is some value associated with this ability to circumvent all development regulations that have been adopted since the Fairhaven Highlands applications were submitted in April and November 2005.
Notwithstanding the moral and ethical aspects of circumventing laws specifically designed to protect public safety and the environment, any belief you might have that this project will be approved under outdated laws is misguided.
You may not be aware, but the State of Washington Department of Ecology (DOE) has jurisdiction over the majority of the wetlands impacted by the Fairhaven Highlands development. On November 12, 2009 (before WAFed acquired Horizon Bank’s assets), DOE submitted its comment letter on the Fairhaven Highlands Draft Environmental Impact Statement (DEIS). I have attached a copy for your information.
In their letter, the DOE wetland and water quality specialists state:
"The DEIS specifies that this project is vested under the City of Bellingham’s outdated Wetland and Stream Regulatory Chapter , adopted in 1991. This regulatory code does not represent the current science on wetlands and their biological and chemical requirements and limitations. Although the City may allow permit approval using this outdated code, the Department of Ecology (Ecology) will be reviewing the project under Clean Water Act Section 401 and Chapter 90.48 RCW authority, using state and federal guidance, which was developed using the best available science. All of the action alternatives would fall within Ecology’s authority under these two laws.
"Taking best available science into consideration, all of the action alternatives would cause far greater indirect impacts to wetlands and direct impacts to their buffers than indicated in the DEIS.
"Currently all alternatives proposed are inconsistent with state and federal wetland and buffer guidance and requirements. In order to avoid future costly delays during state and federal permitting, we recommend that the project include an alternative that clusters development into one section of the site, thus avoiding Category I wetland and buffer impacts and allowing habitat connectivity with large forested upland buffers to the on- and off-site wetlands."
In other words, regardless of how vesting is viewed by the City of Bellingham, none of the alternatives included in the Fairhaven Highlands DEIS will obtain permits from DOE. DOE will require wetland buffers that meet best available science (BAS). In Bellingham, the city’s proxy for BAS is the 2005 Critical Areas Ordinance (CAO), which was adopted one business day after the Fairhaven Highlands Wetland & Stream application was submitted. The Bellingham CAO calls for 150’ buffers for the majority of wetlands and 200’ for two of the Category I wetlands. By contrast, the initial Fairhaven Highlands application provides 50’ buffers.
As you may know, there is a transportation requirement associated with developing this property. The developer must either construct a connector road between Chuckanut Drive and Old Fairhaven Parkway or widen the 12th Street Bridge, both very expensive propositions. Based on DOE’s comment letter, it will not be possible to build the connector road without violating the buffer requirements, so this option is no longer available. In the past, your attorney has claimed that widening the bridge is not financially feasible. As I claimed earlier, this project is dead in the water. If you cannot build the road and cannot afford to widen the bridge, you cannot meet the transportation prerequisite and cannot obtain a permit from the city.
This leaves the option of selling the property to the City of Bellingham, a willing buyer. In his October 28, 2010 letter to Bellingham Interim Planning Director Jeff Thomas, your attorney indicates that WAFed is working to obtain “outside” agency clearances that would allow sale negotiation with the city. I suspect at least one of these outside agencies is the FDIC who is on the hook for 80% of any losses related to loans acquired from Horizon Bank. At last count, the GBNW joint venture owed more than $24 million to Horizon Bank. Theoretically, since Horizon Bank owned 50% of GBNW, half of that amount was a loan from the bank to itself. The other half, or $12 million, was owed by David Edelstein’s Greenbriar Construction. Based on the FDIC’s material loss report for Horizon, it appears WAFed has written this loan down by $16.3 million, leaving a balance of approximately $8 million on its books.
Presumably, the $8 million reflects the value of the Fairhaven Highlands property inflated for any value associated with its vested right to circumvent five-years’ worth of development regulations. Based on DOE’s comment letter, I’d say the value of that vested right is essentially zero.
It’s time for WAFed and the FDIC to recognize the fact that the Fairhaven Highlands development value is much lower than the $8 million WAFed has on its books. The likelihood of obtaining permits from all agencies with jurisdiction is virtually nil.
Why not move forward now on the City of Bellingham’s generous offer to take this property off your hands? Such an action will not only improve your bottom line, but will vastly improve how WAFed is perceived in the community.
Thanks in advance for your consideration.
Related Links:-> Oct 28 letter from GBNW attorney to Interim Planning Director Jeff Thomas
Thu, Jul 02, 2015, 2:55 pm // David CampTrees are Dying for Lack of Water - Only Citizen Action Can Save Them
Thu, Jul 02, 2015, 7:47 am // Dick ConoboyIf your 4th of July holiday is much more quiet this year, you can thank Clay Bulter who passed away at the end of May.
Mon, Jun 29, 2015, 5:00 am // Dick ConoboyThe Samish Neighborhood Plan has been the subject of three undesired rezones in the last year. The city ignores its own guidelines to the detriment of all.
Thu, Jun 25, 2015, 6:00 pm // John ServaisUpdated at 6 pm. Our county justice system has spent 6 years trying to teach Luba Pekisheva that she should not defend herself. Justice denied and miscarried.
5 comments; last on Jun 30, 2015
Mon, Jun 22, 2015, 5:00 pm // David CampA look at the proposal in historic financial context with projections and several questions for the proponents.
7 comments; last on Jun 28, 2015
Mon, Jun 01, 2015, 3:49 am // Dick ConoboyThree extraordinarily large (7-bedroom) single family home rentals are proposed by developers Dave and Jon Hansen on Iron St. in the York Neighborhood.
7 comments; last on Jun 10, 2015
Mon, May 25, 2015, 8:17 pm // John ServaisYoung Chiara spent 3 nights hanging from the anchor chain of Shell Oil's Arctic Challenger as a protest to arctic oil drilling.
Thu, May 21, 2015, 11:50 pm // Tip JohnsonWherein we ponder the fate of humanity
Mon, May 18, 2015, 11:17 pm // John ServaisJoy Gilfilen is challenging incumbent Jack Louws for County Executive.
4 comments; last on May 20, 2015
Fri, May 15, 2015, 6:10 pm // John ServaisRunning update of who is filing for office in Whatcom County. Posts during day Friday and final update Friday evening.
4 comments; last on May 17, 2015
Wed, May 13, 2015, 5:30 pm // John ServaisUpdated | Ski to Sea race does not need to race through sensitive Chuckanut Community Forest Park for special mountain bike leg. City did not renege.
10 comments; last on May 15, 2015
Sun, Apr 26, 2015, 2:05 pm // Guest writerTani Sutley writes a second article on the increasing number of vacation rentals - and the County Council bill to let them expand dramatically.
4 comments; last on May 02, 2015
Thu, Apr 09, 2015, 5:03 am // Dick ConoboyThe Puget Neighborhood is about to become a bit more crowded but less than originally planned. 600+ students to be housed south of Fred Meyer.
6 comments; last on Apr 12, 2015
Sat, Apr 04, 2015, 1:15 pm // John ServaisThe port's latest bone-headed deal calls for the good citizens of Whatcom County to consider the options...unless we're enjoying our Groundhog Day.
3 comments; last on Apr 07, 2015
Thu, Apr 02, 2015, 8:30 pm // Tip JohnsonThe difference between a threat and a promise
5 comments; last on Apr 03, 2015
Wed, Apr 01, 2015, 12:20 am // John ServaisPort of Bellingham today sold out our public waterfront to a foreign shell company formed 6 days ago. Sold it cheap and with a screwy arrangement.
32 comments; last on Apr 05, 2015
Sat, Mar 21, 2015, 11:16 am // Guest writerKamalla Kaur worked with David Mason on his biographical materials and offers this tribute to his illustrious life.
2 comments; last on Mar 23, 2015
Fri, Mar 13, 2015, 5:00 am // Dick ConoboyThe Whatcom County Council has sent discussion on changing the meth ordinance back to the Public Works, Health and Safety Committee
Thu, Mar 12, 2015, 1:06 pm // John ServaisAdd your thoughts and remembrances. Robyn du Pre` was a stalwart and true environmental advocate for Bellingham and Whatcom County. She died this week.
9 comments; last on Mar 23, 2015
Thu, Feb 26, 2015, 10:39 am // Riley SweeneyRiley shares some insight into the national political parties
5 comments; last on Mar 09, 2015
Wed, Feb 25, 2015, 6:31 am // Dick ConoboyIn a hearing, possibly on 3 March, the Whatcom County Council will consider an ordinance changing the rules for contaminated meth use sites.
1 comments; last on Feb 27, 2015
Mon, Feb 09, 2015, 6:00 am // Dick ConoboyNot all rent-to-own propositions are an unwise method to buy a home but some are schemes to rip off the unsuspecting tenant.
Mon, Feb 02, 2015, 9:34 am // Guest writerNo ballot mailed to you. You must request a ballot for voting in the Whatcom Conservation District election. Deadline to apply is Feb 9. By Barbara Perry
Thu, Jan 29, 2015, 10:56 pm // Tip JohnsonWherein Bellingham's billion dollar boondoggle is revisited
4 comments; last on Mar 03, 2015
Tue, Jan 27, 2015, 9:55 am // Terry WechslerThe Lummi requested on Jan. 5, 2015, that the federal government, through the Army Corps of Engineers, honor Art. V of the Treaty of Point Elliott and deny…
1 comments; last on Feb 04, 2015
Sun, Jan 25, 2015, 12:32 pm // Guest writerAdventures of George Pickett in the Pacific Northwest Wilderness
5 comments; last on Jan 28, 2015
Sat, Jan 24, 2015, 3:15 pm // Terry WechslerThe fourth area refinery crude by rail infrastructure project to receive permits without benefit of environmental review is being appealed, and provides an opportunity to make precedent.
Fri, Jan 23, 2015, 12:13 am // John ServaisThe second annual award for Citizen Journalism will be to The Political Junkie himself who runs the Sweeney Politics blog, Riley Sweeney.
2 comments; last on Jan 24, 2015
Tue, Jan 20, 2015, 3:07 am // Guest writerGuest article by Sandra Alfers. Water and sewer connections drive unwanted annexation. Trickle Creek homeowners are muzzled by a "no protest zone."
1 comments; last on Jan 20, 2015
Sun, Jan 18, 2015, 10:14 pm // Guest writerEllen Murphy gives us a poem for this Martin Luther King day of remembrance.
2 comments; last on Jan 21, 2015
Sun, Jan 18, 2015, 9:15 pm // Tip JohnsonWherein the ridiculous is ridiculed
5 comments; last on Jan 21, 2015
Thu, Jan 08, 2015, 2:54 pm // Guest writerTani Sutley guest writes about the vacation rentals situation and presents goals for the county council to consider for improving our rural neighborhoods.
1 comments; last on Jan 10, 2015
Wed, Dec 31, 2014, 1:16 am // Guest writerDuuhhh! Try doing without it. Marian Beddill provides an overview of our rural Whatcom County water situation and the efforts to find fair solutions.
3 comments; last on Jan 08, 2015
Wed, Dec 24, 2014, 1:23 pm // Riley SweeneyThe Herald gave us their top 10 stories, Riley gives you his top 5
Thu, Dec 18, 2014, 5:04 pm // John ServaisOne part of the environmental study for the proposed Cherry Point mega coal terminal has been completed and released. It deals with ship collisions - they call it…
2 comments; last on Dec 22, 2014
Thu, Dec 18, 2014, 12:26 pm // John ServaisBellingham Public Works shows how tone deaf they can be to business concerns. They insisted on street work that takes away up to 80 parking spaces in Fairhaven…
Tue, Dec 16, 2014, 3:51 pm // Dick Conoboy7-0! City Council Unanimous. Rentals Will Be Inspected in Bellingham. Thanks go to WWU students for speaking out to city council.
5 comments; last on May 02, 2015
Thu, Dec 11, 2014, 5:05 am // Dick ConoboyThe Bellingham City Council has added an inspection component to the registration-only rental ordinance proposal of Councilmember Murphy
4 comments; last on Dec 16, 2014
Wed, Dec 10, 2014, 6:37 am // Dick ConoboyThe ban on consumer fireworks that took effect last summer is valid all year, even New Year's Eve
1 comments; last on Dec 11, 2014
Tue, Dec 09, 2014, 1:31 pm // John ServaisThe Horizon Lines ship - the many year resident of the Port of Bellingham - broke loose this morning due to failure of some system. A few photos.
3 comments; last on Dec 10, 2014
Tue, Dec 09, 2014, 2:25 am // Guest writerTani Sutley writes of how unregulated vacation rentals are invading the Lake Whatcom watershed. She urges action before the Planning Commission meeting on 11 December.
4 comments; last on Jan 03, 2015
Wed, Dec 03, 2014, 2:20 pm // Richard LewisPoet Richard Lewis reflects on Elizabeth Warren
3 comments; last on Dec 07, 2014
Sun, Nov 23, 2014, 4:27 pm // Tip JohnsonWherein Whatcom's Klan heritage may be oozing from some cracks
8 comments; last on Dec 06, 2014
Sat, Nov 22, 2014, 3:48 pm // Riley SweeneyRiley dives into the data with precinct maps and historical perspectives
Thu, Nov 20, 2014, 9:15 am // Dick ConoboyCampus Crest Communities, Inc. has officially offered for sale the Lincoln St. property that was to be a student apartment development.
2 comments; last on Nov 23, 2014
Wed, Nov 12, 2014, 1:51 pm // John ServaisUpdated Nov 12. Howard Harris, the founder of the Bellingham silent peace vigil at the Federal Building in Bellingham, has died. He and Rosemary were leaders in our…
Tue, Nov 11, 2014, 2:34 pm // John ServaisOn this Veterans Day, a note about how vets need our government to step up - as has never been done. And a personal note on the power…
3 comments; last on Nov 13, 2014
Thu, Nov 06, 2014, 6:53 am // Dick ConoboyThe Campus Crest apartment complex may be the "victim" of a corporate restructuring plan.
3 comments; last on Nov 10, 2014
Tue, Nov 04, 2014, 12:28 pm // John ServaisWhile smearing Seth Fleetwood over a common tax arrangement, we discover Doug Ericksen also has a benign tax lien - one he denied.
6 comments; last on Nov 11, 2014
Mon, Nov 03, 2014, 8:14 pm // Richard LewisPoet Richard Lewis weighs in on the Tea Party values
Sat, Nov 01, 2014, 12:29 pm // Tip JohnsonOr why to vote for Nyima, the dog, for County Prosecutor
4 comments; last on Nov 03, 2014
Thu, Oct 30, 2014, 2:18 am // John ServaisA link to Riley's Political Junkie for excellent recommendations - and a few thoughts of my own.
1 comments; last on Oct 30, 2014
Thu, Oct 23, 2014, 11:01 am // Tip JohnsonIt's just how things roll in Whatcom County
5 comments; last on Oct 26, 2014
Wed, Oct 22, 2014, 2:44 pm // John LesowUpdate Oct 22: John Lesow has posted a comment with considerable more information on this issue.
1 comments; last on Oct 22, 2014
Tue, Oct 14, 2014, 6:36 am // Riley SweeneyRiley does a local political comedy show
1 comments; last on Oct 15, 2014
Wed, Oct 08, 2014, 6:24 pm // John ServaisThree final candidates for Bellingham Planning Director spoke today at a cozy 'meet and greet' of government employees and developers.
6 comments; last on Oct 11, 2014
Sat, Oct 04, 2014, 12:23 pm // Tip JohnsonWherein we see that sometimes government can do what business can't.
9 comments; last on Oct 07, 2014
Fri, Oct 03, 2014, 10:26 am // Dick ConoboyAn experienced real estate inspector provides a window to the dangeroous conditions found in rentals in Bellingham
3 comments; last on Oct 05, 2014
Thu, Oct 02, 2014, 2:33 pm // Riley SweeneyRiley files a full report of the Tea Party debate for State Leg candidates
1 comments; last on Oct 04, 2014
Tue, Sep 30, 2014, 8:00 am // Guest writerWherein a Fulbright scholar, professional engineer and successful business owner files for public office
4 comments; last on Oct 02, 2014
Election InfoCounty Candidate Filings
State Elections Website
Whatcom County Elections
Coal, Oil & TrainsCoal Stop
Community Wise Bellingham
Powder River Basin R. C.
Local Blogs & NewsBellingham Herald
Bham Herald Politics Blog
Bham Politics & Economics
Bhm Biz Journal
Friends of Whatcom
Get Whatcom Planning
League of Women Voters
Western Front - WWU
Local CausesChuckanut Community Forest
City Club of Bellingham
Futurewise - Whatcom
Lummi Island Quarry
N. Cascades Audubon
NW Holocaust Center
Reduce Jet Noise
Salish Sea Org.
Save the Granary Building
WA Conservation Voters
Whatcom Peace & Justice
Port of Bellingham
State Elections Website
US - The White House
WA State Access
WA State Elections
WA State Legislature
Weather & ClimateCliff Mass Weather Blog
Nat Hurricane Center
Two day forecast
Watts Up With That? - climate
Edge of Sports
Famous Internet Skiers
Good Web SitesAl-Jazeera online
Change The Mascot
Foreign Policy in Focus
Innocence Project, The
Intrnational Herald Tribune
Julia Ioffe/New Republic
Middle East Times
New American Century
Paul Krugman - economics
Personal bio info
Portland Indy Media
Project Vote Smart
Stand for the Troops
Talking Points Memo
The Crisis Papers
War and Piece
NwCitizen 1995 - 2007Early Northwest Citizen
Quiet, Offline or DeadBellingham Police Activity
Citizens of Bellingham
Cordata & Meridian
Facebook Port Reform
N. Sound Conservancy
No Leaky Buckets
Protect Bellingham Parks
The American Telegraph