Opinion for hire: Part 2 - Admission of errors

On February 20th, I wrote a column about the Chuckanut Ridge / Fairhaven Highlands mature forested wetlands and the failure of Horizon Bank’s wetland consultant to properly rate th

On February 20th, I wrote a column about the Chuckanut Ridge / Fairhaven Highlands mature forested wetlands and the failure of Horizon Bank’s wetland consultant to properly rate th

On February 20th, I wrote a column about the Chuckanut Ridge / Fairhaven Highlands mature forested wetlands and the failure of Horizon Bank’s wetland consultant to properly rate these wetlands as Category 1, the most valuable kind and the most critical to preserve. A link to Opinion for hire: Part 1 is included in the Related Links following this article.

The consultant working for Horizon Bank & David Edelstein completed her first delineation of the property’s 13 wetlands in October 2005. At that time, she claimed that none met the requirements for Category 1.

Many residents, including those with substantial expertise in this field, quickly notified Bellingham officials that five of these wetlands meet the Category 1 criteria because they are mature forested wetlands larger than an acre, though none were properly identified by Horizon’s consultant.

It should have been obvious to city officials that the Fairhaven Highlands wetland delineation was erroneous. In 1990, the same wetlands were delineated as part of an application for the prior Chuckanut Ridge development. At that time, the four largest wetlands were properly rated Category 1 mature forested wetlands. Since no logging had taken place during the 15 years that elapsed, the existing mature forest had become even more mature by the time Horizon Bank submitted its Fairhaven Highlands application in 2005.

Why didn’t the city recognize this error right away?

Why didn’t the city investigate claims that these errors exist?

In April 2006, the US Army Corps of Engineers confirmed the status of these mature forested wetlands in a letter to the joint venture operated by Horizon Bank and Edelstein, a copy of which was furnished by the Corps to Horizon Bank’s wetland consultant and attorney.

Although we provided a copy of this letter to the city, city officials continued to ignore the obvious. Why?

Since October 2005, Horizon Bank’s consultant has re-rated these 13 wetlands on three separate occasions - in October and December 2008, and again a few days ago, on March 31. In the most recent wetland rating, the consultant corrected her previous error and rated the three largest wetlands Category 1, finally recognizing them as mature forested wetlands. At this time, two mature forested wetlands remain improperly categorized.

One thing is certain: The original wetland delineation was incomplete and erroneous. Even though the Dept of Ecology’s Wetland Rating System and Wetland Rating Form require mature forested wetlands to be identified, Horizon Bank failed to do so. While it has taken 3 ½ years to correct this error for Wetlands CC, KK and JJ, the error remains for Wetlands BB and FF.

Recently, the City’s Certified Arborist prepared a wetland tree survey, which confirmed the existence of trees with sufficiently large diameters to meet the definition of mature forest for Wetlands BB and FF; however, Horizon Bank refuses to recognize these findings.

As mentioned in prior articles, Horizon Bank submitted its wetland application exactly one business day before the City of Bellingham adopted its Critical Areas Ordinance (CAO) and claims that its application is vested and need not comply with the unique public safety protections of the CAO. For now, let’s ignore the irony of a community bank holding its community hostage and willfully violating laws specifically designed to protect the community from “injury, loss of life and property damage due to landslides and steep slope failures, erosion, seismic events, or flooding.” Let’s also ignore the fact that vesting does not apply to regulations governing health and safety. Hey, we’re all friends here, right?

Instead let’s focus on Horizon Bank’s negligence in recognizing the Special Characteristics of five mature forested wetlands and the bank’s failure to rate these wetlands as Category 1. What impact does that have on its vested status? Fortunately, this ground has already been covered in an article I published more than a year ago. (See To vest or not to vest: Chuckanut Ridge & the CAO under Related Links below.)

Essentially, according to the state Supreme Court, the WA state Vested Rights Doctrine “is applicable if the permit application is sufficiently complete, complies with existing zoning ordinances and building codes, and filed during the period the zoning ordinances under which the developer seeks to develop are in effect.” Noble Manor v. Pierce County, 133 Wn.2d 269 (1997)

In other words, an application is only vested if it is both complete and compliant with existing law.

Question 1: Is Horizon Bank’s wetland application complete given it omitted critical information about the 5 mature forested wetlands? Is it complete given it erroneously categorized at least 5 out of 13 wetlands? Is it complete if it ignored the findings of the previous wetland delineation performed in 1990?

Question 2: Does Horizon Bank’s application, which only provides 50’ buffers for all wetlands, comply with existing law that requires 100’ buffers for all Category 1 wetlands?

Question 3: Given that Horizon Bank’s application is neither complete nor legally compliant, is it vested as to the city’s CAO?

Question 4: Is intentionally seeking to avoid the unique safeguards of the CAO, laws specifically designed to protect us from environmental catastrophes, the best way for a community bank to treat its own community?

About Larry Horowitz

Commenting member • Member since Jan 16, 2008

Comments by Readers

Frank E. Ward

Apr 04, 2009

Well, it’s no wonder that Horizon is only rated 2 stars
by bauerfinancial.com.  Peoples gets 4, Whidby 5 and
Washington Federal 3 1/2.  Horizon is under an FDIC
cease and desist order.  Management has been totally
unresponsive to my inquiries.  I’m afraid the Chuckanut
project is just the tip of the iceberg.  Only time will tell-
in the meantime. I’m moving my accounts.  My stock will
probably prove to be worthless.


Larry Horowitz

Apr 04, 2009

Frank, Thanks for taking time to comment.  Many people in the community want desperately to support our local businesses, including Horizon Bank.  That?s why the entire Chuckanut Ridge fiasco is disappointing.

I have closely followed this issue since Horizon submitted its application in April 2005, and many people I know have a two-decade history with this property.  Based on my observations, Horizon?s most critical error was following poor advice when they knew, or should have known, it would be detrimental to their long-term client relationships.

Banks are generally prohibited from acting as real estate developers, and for good reason.  Because of the repeat nature of their business model, banks sustain profits by developing strong bonds with their customers.  Developers on the other hand are in a transaction-oriented business where the strength of relationships is not critical to their success.  As we have seen, mixing the too is a recipe for disaster. Depending upon how this turns out, it might make for an interesting case study at the Harvard Business School.

Horizon?s decision to intentionally avoid compliance with the city?s Critical Areas Ordinance is reprehensible.  We know it; and they know it. The CAO is the city?s only comprehensive law specifically designed to protect the community from real, not hypothetical, catastrophes ? flooding, landslides and steep slope failures.  The fact Whatcom County was declared a disaster area and FEMA established an office here only a few months ago should heighten our sense of these realities, not dull them.  A community bank needs its community.  I hope it?s not too late for Horizon Bank to learn this lesson.  At some point, you need to fire advisors whose counsel has proven detrimental.  Unfortunately, time may be running out.


Tip Johnson

Apr 05, 2009

Down with the Bank, up with the Woods!

Sure, the community wants to support local business, but not business that is bad for the community.

G-P was a good example of how, at some point, nature will take its course.  It has become entirely reasonable do unto Horizon as they would do unto the community - and before they start!  If it’s going to be a destructive clear-cut, then let it commence, one depositor at a time, not one tree.


John Erickson

Apr 06, 2009

Only after the last tree has been cut down
Only after the last river has been poisened
Only after the last fish has been caught
Only then will you find that money cannot
be eaten
    Cree Indian prophecy

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