A waterfront residential project and Bellingham Makerspace were some of the more interesting topics discussed at the Port of Bellingham Commission regular meeting on October 8, 2019.
The public meeting began at 4:30 pm. Board President Ken Bell, Vice President Bobby Briscoe and Secretary Michael Shepard were all present.
- Link to October 8, 2019 Port of Bellingham meeting agenda
- Video of the full October 8, 2019 Port Commission Meeting
First Public Comment Period –
Everyone during the first comment period talked about a Port decision that could affect the Bellingham Makerspace, a non-profit that provides access to creative tools, trades, and education for small manufacturers and craftspeople with a membership. Makerspace is a sub-tenant in the Technology Development Center at 1000 F St., and on the agenda is a renewal and modification of the Port’s lease with Bellingham Technical College that will give it exclusive use of the whole facility. Makerspace is sub-leasing from BTC and not the Port.
Ivan from Bellingham, a woodworking instructor at Makerspace, said that when BTC takes over the whole facility it will raise the rent four times and give the non-profit half the space. “The space is very important to me personally because they offered me a job when I didn’t have one moving to Bellingham,” he said, “It’s a very useful space and it’d be a shame if it had to go.”
Kim Perry, president of BTC, said she is pleased that BTC is able to continue its relationship with the Port and able to take over the space that was previously occupied by Western Washington University. She said BTC fully appreciates and understands that the cost of tenancy will be increasing, and that the Port will no longer have a fiscal responsibility for the utilities and services.
Raquel Rutherford is a volunteer with Makerspace. “Since joining the leadership team I’ve seen how valuable it has been in starting over a dozen businesses in the 5 years that we’ve been here,” she said. “We’d really like to continue our relationship with both BTC and the Port, as a valuable part of the creative community here … in Bellingham”
Scott Sanderson said supporting Makerspace helps the Port fulfill it’s mission statement. “Valuable community resources like Makerspace are crucial to giving our young people the skills they need to compete in the international marketplace, and in helping to inspire them to create the careers of the future.”
Seven items were on the consent agenda. Items A through E were approved on a 3–0 vote. Items F and G were approved 2–0 with commissioner Bell abstained.
B. Approve the Executive Director to enter into insurance contracts for the renewal of the Port’s liability and auto insurance coverage for the policy period October 1, 2019 through September 30, 2020.
C. Approve the Harbor Land Lease with Squalicum Yacht Club for approximately 3,300 square feet of property located at Squalicum Harbor.
D. Authorize the Executive Director to enter into a Toxics Cleanup Integrated Planning Grant agreement with the Department of Ecology to provide state funding toward programming and planning activities for the Bellingham Healthy Housing project at the Lignin parcel in the Waterfront District.
Here’s the background on this one: In early 2019, the Port received a $200,000 Healthy Housing Integrated Planning Grant from the Department of Ecology to fund early project planning efforts for redevelopment of the Lignin Parcel located at the comer of Cornwall and Laurel. The 3-acre parcel is part of the GP West cleanup site, which requires remediation under the Model Toxics Control Act (MTCA) prior to redevelopment, according to the Port’s memorandum for this action item.
The Port has partnered with Millworks LLC to evaluate the feasibility of a food campus and affordable workforce housing at the Lignin Parcel. The group envisions a campus setting that includes food retail, processing and manufacturing, as well as commercial kitchen space supporting catering and artisanal food companies. It would be part of a multi-story, mixed-use building with: offices, classrooms, community event space, and affordable workforce housing.
The Port will use the grant to advance the Millworks concept by completing focused environmental investigations, site surveys, coordination with development partners and community stakeholders, and parcel layout/programming.
Commissioner Shepard asked for more details about how the grant money will be spent. Brian Gouran, Director of Environmental Programs, said they plan to hire a team of consultants that could do a variety of things — including land use surveying, geotechnical and environmental consulting, and urban planning — that would ultimately support the Millworks group and their vision for a food campus.
E. Notice of awarded Public Works Contract.
F. Approve the Executive Director to execute the Termination of Lease Agreement between Port of Bellingham and Best Recycling, Inc. for Suite 240 (964 SF office) in the Bayview Center Building, 12 Bellwether Way, finding that the termination is fair to the Port and in the public interest.
G. Approve the Executive Director to execute the New Commercial Lease between Port of Bellingham and Kelly Crenshaw PsyD, a sole proprietor, doing business as Cascade Neuropsychology for Suite 240 (964 SF office) in the Bayview Center Building, 12 Bellwether Way.
Presentation – Waterfront Art Proposal update
Project Director Lisa Citron, Project Director of an organization called From A Child’s Point of View, gave an update on a project to put children’s artwork on the trail around the former Georgia Pacific Treatment Lagoon. Cutout murals reflecting children’s feelings about habitat loss will be on display along the fence by the lagoon. The cutouts were on display at Maritime Heritage Park and will be moved to the trail mid-October.
Citron also proposed a new temporary mural on the old GP alcohol plant. She’s asking the Port to approve a big mural on the north-facing wall, printed on paper that would last about 2 years. Her plan is to start the mural in June 2020, but she needs the nod of the port commission to start fundraising.
Shepard said he appreciates bringing these art proposals forward because it’s good for “activating waterfront spaces” and getting people down there. Briscoe said they couldn’t take action on the new art proposal at this meeting but it may be on the next agenda.
Action Item 1 – Broadband
Item 1: Authorize the Executive Director to approve an Interlocal Operating Agreement between the Port of Bellingham, Port of Skagit, Port of Whitman, Port of Ridgefield, Port of Kalama and Port of Pasco.
These six ports are all in the process of expanding broadband access and installing fiber optic cable. After installation the cable will need marketing and operational expertise. All six ports agreed that jointly managing those tasks will be more efficient than having each port do it individually. The agreement will cost the Port of Bellingham $200,000 in the first year. It’s anticipated that revenues will grow sufficiently to cover future operating expenses.
Commissioner Briscoe said it’s a great idea: “Anytime that we can get together with our fellow ports and save not only their folks money but the folks in our county money, and we can use some equipment instead of double purchasing it, I think it’s good business and it’s what we’re supposed to do.”
Action Item 2 – Western Crossing
Item 2: Authorize the Western Crossing Innovation Park Development Plan per the terms of the second amendment to the Western Crossing Memorandum of Understanding between the Port of Bellingham and Western Washington University (WWU).
Don Goldberg, Director of Economic Development gave a presentation focused on how a Public-Private-Partnership (P3) could make the Western Crossing project move forward faster. Since 2008, the Port and WWU have been working together to create a university presence within the Waterfront District. WWU was required to prepare a plan for development of approximately 6-acres on the waterfront, and in 2018 they submitted a draft plan to the Port. Commissioners were frustrated with the slow pace of WWU’s planning and concerned that the draft plan was too broad. The plan that commissioners were voting on tonight is a revised Development Plan with a new goal to pursue a P3 model.
Goldberg said one of the benefits of a P3 is that the private sector has a better track record of delivering results on-time and often at a lower price. Private companies have expertise and up-to-date building systems, and the capacity to work faster and cheaper than the government. The Port and WWU would own the land and support the project politically, seed the project and bring in potential tenants. Private developers would fund and develop and market the project. Goldberg said an important part of a P3 is that all partners have some form of equity: “It’s really important that everybody have skin in the game.”
The Western Crossing project will be focused on industries such as Engineering, Plastics and Composites, Manufacturing Engineering, Clean Energy Studies, Cyber-security, Marine Engineering and other emerging technologies that are complimentary to existing WWU programs. After Commission approval, the next steps will include preparation and issuance of a Request for Proposals, negotiation of the P3 agreement, initiation of project design and layout, permitting and initial project construction.
Shepard said a P3 model worked very well for the Catalyst Building in Spokane’s University District. Bell recognized the “commitment the university brought to the table to reach this agreement,” and said they accomplished everything they wanted to accomplish. He said the new plan is more flexible and is no longer limited to the six acres that they were previously limited to. Briscoe said this plan was much better than what was presented before.
Action Item 4 – Technology Development Center and Bellingham Makerspace
Item 4: Authorize the Port Commission to approve a Renewal and Modification of IPZ Zone Research Facility Lease between the Port of Bellingham and Bellingham Technical College (BTC). Commissioners moved Item 4 ahead of Item 3 because several people attending the meeting were there to hear about Item 4.
BTC and WWU have been tenants of the Technology Development Center at 1000 F Street since its creation in 2009. The facility was built using a state grant and was designated as an Innovation Partnership Zone (IPZ) for research in marine technology. Their leases expire on October 31, 2019. WWU will not be renewing its lease so BTC has asked to lease the whole facility. This lease renewal and modification allows BTC exclusive use of the facility but the Port retains the right to use the conference room. BTC will pay a nominal rent and pay for utilities and services for the facility. The lease renewal says BTC will do its best efforts to promote marine and marine trades, and with prior approval may sub-lease portions of the facility.
The Port will receive rent of $16,422.84 per year with a 4% annual increase, and will no longer have a fiscal responsibility for the utilities and services. Commissioners were unsure about the current status of the IPZ designation. Ray Kubista, Dean of Professional Technical Education at BTC, said they plan to expand the programs they currently offer and bring in more equipment with the additional space.
Shepard addressed the claim that Bellingham Makerspace, a sub-tenant of BTC at the Tech Development Center, will be getting half the space and four times the rent. He said the Port needs to connect Makerspace to more resources because they’re helping private companies to ability to explore and innovate. Bell said they shouldn’t be getting in between a tenant and a sub-lease, and that Makerspace can come to the Port to request those resources directly.
Action Item 3 – Waterfront redevelopment
Item 3: Authorize the Executive Director to approve Material Modifications No.1 to the Project Memorandum for Harcourt’s Waterfront Residential project, in accordance with Section 5.2 of the Master Development Agreement.
Harcourt is asking the Port for a 4-to-6 month extension to begin construction on its Waterfront Residential project. Gouran said Harcourt has been diligently pursuing the project but they’ve had some permitting problems with the city. The building heights they assumed were correct needed more work. The construction start date will be affected but the completion date (January 2022) has not changed.
Harcourt Sales Director, Pat Power and Finance Director, Nick Doherty, came to the meeting from Ireland. The Commissioners reproved them for the slow pace of progress. “People have seen this project going on and on and they feel that its not moving nearly fast enough and we’re not seeing the investment that we would like soon enough,” Shepard told Power. “We really want to see evidence that we’re a top priority for development, and pushing this out even further is going to just exacerbate existing concerns in the community that Harcourt hasn’t come to the table fully and isn’t invested in the way folks would hope they are.
“We feel like the stepchild here in Bellingham because we see what you’re doing elsewhere and we don’t think we’re getting the same attention here,” Bell said. “A huge part of this is you don’t have anybody here locally that can speak for the company, and I think you need somebody because your reputation here now is not good — and you need to hear that loud and clear. I’m a supporter. I’m a fan. But your reputation in this town, in this community, is not good.”
Power said Harcourt does have a dedicated team locally, and that they’re fully committed to the project. He said once they get the building permits they can commence with the construction. Shepard said, “the community likes being informed, and keeping the community engaged through regular communication will benefit their standing locally.”
Action Item 5 – Bayview Center Building Ballroom
Item 5: Authorize the Commercial Lease and Project Development Agreement between the Port of Bellingham and Bellwether Harbor Investments LLP for the Ballroom at Bayview Center Building at 12 Bellwether Way.
This agreement will allow Bellwether Harbor Investments to expand the Ballroom at the Bayview Center Building, which is owned by the Port and sits next to the Hotel Bellwether. When the Port purchased the building from Bellwether Harbor Investments in January 2013, the purchase price was discounted from $4.58 million to $4.1 million provided that the Hotel Bellwether retains priority use of the ballroom up to four times a month for 10 years. The new agreement provides for the development of an expanded Ballroom Banquet Space by the Port and terminates the old Banquet Space Use Agreement.
Judy Harvey, Senior Property Manager for the Port, said the new lease would take effect November 1, 2019. It will be a long-term lease of 23 years. The project cost is estimated at $325,000, and the Port will contribute 30 percent of the project cost. Base rent will be $5,000 per month plus a concession fee starting February 1, 2023. Harvey said the base rent will more than cover the Port’s contribution over the term of the lease.
Shepard said, “he likes the idea and that meeting spaces like the Ballroom are in high demand.” Commissioner Bell commented that he supports the expansion “100 percent” and said “he’s been to events at the Ballroom where there wasn’t enough space.”
Action Item 6 – Blaine Harbor
Item 6: Authorize the Port Commission to approve a Modification of Lease between the Port of Bellingham and Norman M. Walsh, doing business as Walsh Marine for premises at the Blaine Marine Industrial Area.
This lease modification will change the lease period and adjust the rent for Walsh Marine and will hopefully attract more bids for a new building at the Blaine Industrial Area. A lease change in 2018 provided for the removal of a port-owned tent structure and the development of a new facility on the premises to be constructed by the Port. The Lease was further modified to address existing environmental conditions and include Walsh Marine’s acknowledgment that the Lease Premises are within the Ecology designated Westman Marine Model Toxic Control Act site.
The Port completed the design of the new building facility earlier this year and solicited a bid for construction. The bid process resulted in one responsive bid that was rejected due to it being significantly over budget. In recognition that a new building is required for the future success of a boatyard in Blaine, Port staff has increased the project budget and negotiated a change to the Walsh Marine lease agreement. Port staff are prepared to rebid the project subject to Commission approval of this Modification of Lease.
This lease modification changes the term of the lease with Walsh Marine to a six-year term with no extensions, adjusts the rent for the new lease period, and adds language acknowledging that, “the primary purpose of the new building is to benefit the Port’s long term development of the Blaine Marine Industrial Area for the continued and ongoing use of the premises as a boatyard.”
Shepard said he agrees, “there’s a strategic importance of keeping an active boatyard in Blaine Harbor,” and that a lot of changes will be coming to the harbor. Briscoe commented that he is very supportive of getting Blaine Harbor back on its feet and how it will help the economy of Blaine. He said to the next bidder: “please have some room in your heart so we can get this done.”
Second Public Comment Period –
Julia Aken, a local small business owner, said Makerspace will have to close at the end of the month as a result of the decision that the Port made tonight. She said getting Makerspace into that building took six months of effort, and it’s the closest thing to a business incubator that we have in Bellingham.
Commissioners all said they were supportive of what the Makerspace does. “Don’t take what we did tonight as that we’re throwing you guys to the wolves,” Briscoe reassured, “that’s not what’s going to happen.”
Executive Director Rob Fix suggested the Port could sit down with Makerspace and mediate with BTC. Bell said maybe the Port can help the non-profit find a space. “You’re going to have some resources from the Port at some level, but we just need to understand it,” he said.
“Other ports have taken on incubator spaces with a little bit more zeal and I think its something we could do,” Shepard added.
“I think we need to stay on top of this because I don’t want this program to fall beside the way,” Briscoe said. “This is a way for folks who don’t have monetary means to get into something, and it appears … that it’s a pretty good program.”
Fix said they’ll get an update by the next meeting.
Other Business –
Briscoe asked for an update on the Fairhaven Work Studios project/proposal. The Port’s Property Manager said they are currently in the planning process and seeking permits from the City of Bellingham. He said the designs have changed, the placement of the buildings have changed and the height restrictions have changed.
Briscoe asked about the difference between affordable housing and workforce housing, and how two Port housing proposals are being blended together. Legal Counsel Frank Chmelik said affordable housing is defined as 0-60 percent of median income and workforce housing is 60-120 percent of median income, but HUD doesn’t draw the distinction. He said the distinction is important for the Port in terms of the ability to support those goals as economic development. “The closer we are to workforce housing, the more solid ground the Port’s on,” Chmelik said, “the closer we are to affordable or subsidized housing, the weaker the underpinnings of the theory that gives the Port the authority to act would be.”
Briscoe commented that the Port has been asked about helping with affordable housing and the commissioners discussed what the Port has the authority to do. Chmelik said, “there has to be an economic development component but many Ports push the definition. The Port could frame the problem in terms of economic development and ask the Attorney General, but they may not like the answer. The Port could enter into an interlocal agreement with another government that could do something about affordable housing, but the Port has to charge fair market value or the true and full value.”
Briscoe also discussed the Port’s A-2 Bond ratings and asked the Port Auditor to explain how much they’ve saved because of the bond rating. The auditor said the Port has saved about $2.5 million over the next 10 years. In summer 2019, the Port refunded its 2010 bonds and Moody’s reaffirmed their A-2 rating. Had the credit rating been degraded, the Port would have been less attractive to investors and would have to pay more interest for people to buy their bonds.