I really pity Horizon Bank’s CEO Rich Jacobson. His predecessor, Laury Evans, sure left him a bad hand to play. Not only is Mr. Jacobson faced with the same loan portfolio problems plaguing most banks nationwide, but he’s stuck with a moral dilemma that his buddy Mr. Evans created more than four years ago.
Although banks are generally prohibited from acting as real estate developers, it appears that one of Horizon’s subsidiaries, Westward Financial Services, was grandfathered under prior law. In 2004, Westward Financial entered into a real estate development joint venture with David Edelstein’s Greenbriar Northwest, whose primary holding is the Chuckanut Ridge property on which they hope to develop the 739-unit Fairhaven Highlands project.
Enter the moral dilemma.
The Chuckanut Ridge property is essentially an 82-acre swampy hill with some very steep slopes and environmentally-sensitive mature, forested wetlands. Because of its desirable southside location, most of the land surrounding this property, with the exception of some land to the south, has been developed for many years. For sure, if this property weren’t so chock full of critical areas, it would have been developed long ago.
About the time Horizon Bank & Edelstein acquired Chuckanut Ridge, the city of Bellingham began working on its Critical Areas Ordinance (CAO), a law whose primary goal includes the protection of the community from injury, loss of life, and property damage due to landslides, steep slope failures, erosion, seismic events and flooding. The law itself states that critical areas may “pose a threat to human safety or to public and private property.”
In November 2004, the Bellingham City Council issued Resolution 2004-36, which resolved that the city would adopt its CAO by July 1, 2005. As we all know by now, the city missed its deadline and did not adopt its CAO until November 21, 2005.
Naturally, real estate developers don’t want to be restricted by any regulations, even if they are designed to protect public health, safety and welfare. So it’s no surprise that Horizon Bank & Edelstein submitted their applications to develop Fairhaven Highlands before the CAO was adopted. In fact, its application to destroy many of these wetlands was submitted just 3 days before.
Fortunately for them, good ole Jorge Vega (former planning director) was only too happy to determine that this application was “complete” - even though there are numerous documented errors and omissions. Having submitted a “complete” (wink ;-)) application, Horizon & Edelstein considered their application vested in the laws that existed before the CAO was adopted. Problem solved.
Unfortunately for our heroes, the Washington state Supreme Court doesn’t look kindly on this tactic. In City of Seattle v. Hinckley, the Supreme Court wrote, “There is no such thing as an inherent or vested right to imperil the health or impair the safety of the community.
But, to be protected against such impairment or imperilment, is the universally recognized right of the community in all civilized governments; a protection which the government not only has a right to vouchsafe to the citizens, but which it is its duty to extend in the exercise of its police power.” (Emphasis added)
Of course, it shouldn’t take a Supreme Court case to recognize the obvious. Nevertheless, Horizon & Edelstein continue to pursue a development that totally disregards all of the safeguards unique to the CAO that are designed to protect the community from injury, loss of life and property damage. It’s no surprise that Mr. Edelstein would be willing to risk the public safety for his own personal profit. But for Horizon Bank - a bank that relies on strong relationships with members of its own community – to mimic Mr. Edelstein’s greed is quite astonishing indeed.
Mr. Jacobson’s predecessor, Mr. Evans, never seemed to care that he might be biting the hand that feeds the bank. Now that Mr. Jacobson has been promoted to CEO, many of us wonder if he’ll continue to choose greed over the safety and welfare of the bank’s community. For the sake of Horizon Bank and our community, let’s hope not.