Fort Worden faces existential threat

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The Fort Worden Public Development Authority is facing an existential financial threat as hospitality industry revenue across the U.S. plunges. The fort is projecting losses of $4 million through August, chief financial officer Diane Moody said.

Today the fort is operating on a skeleton crew of eight full-time equivalent employees, as opposed to a usual work force of 175 during the peak summer season.

Without a cash infusion, the Fort Worden Public Development Authority (PDA) will be out of money and unable to continue operations by July, Moody said.

For now, survival depends on the completion of the Makers Square capital project, which is planned to resume construction this week and finish in about three months.

The Makers Square project is a restoration of three buildings on Fort Worden’s campus for new arts and culture space. When the project is complete, the PDA will be able to accept reimbursement grants, which will put at minimum $500,000 into the agency’s reserves.

“The challenge is getting from here to there,” executive director Dave Robison said. “But the question is how.”

Other capital projects, such as the “glamping” campsite, are still going ahead as planned with construction resuming this month.

The current PDA business model is focused on three components: overnight lodging for leisure and business travel, renting facilities for events like conferences or meetings, and food services.

Robison said all three revenue streams came to a screeching halt in March alongside the rest of Port Townsend’s tourist industry with non-essential travel and dine-in restaurant seating prohibited by the governor’s “Stay Home, Stay Healthy” order.

“The heart of our operations was just gutted out,” Robison said.

Looking to the not-so-distant future, the entire business model of the fort might need to change to stay self-sustaining, Robison said.

Even before the pandemic, the business model was “tenuous at best,” he said.

Although the PDA operates as a quasi-public entity, it faces unique challenges during the COVID-19 crisis because it is ineligible for federal and state coronavirus-related relief funds Robison said. While Jefferson County and the City of Port Townsend are eligible for almost $1.9 million in relief combined, the PDA has not received any.

A path forward first requires facing the immediate financial crisis and securing funds to keep the lights on. To help in this effort and plan the financial recovery, the PDA has signed a consultant contract with David Timmons, former Port Townsend city manager.

Timmons helped launch the PDA in 2011 and has experience with the Federal Emergency Management Agency, Robison said in a May 13 meeting.

When the PDA was first formed in 2011, it was in response to another crisis the fort was facing: the Great Recession. The PDA was essentially formed to save the fort, Robison said, and today it faces similar challenges but also complete new ones which are marred by chronic uncertainty.

Robison said the fort  plans to reopen lodging and services when Jefferson County enters Phase 3 of the “Safe Start” plan. But reopening still might not be a saving grace if the number of visitors is not enough to offset the cost of labor. The fort anticipates increased costs associated with acquiring the appropriate personal protective equipment for all its employees and extra labor costs for more thorough cleanings.

PDA employees on unemployment standby are still receiving some benefits. About $90,000 was raised by PDA board members and the Fort Worden Foundation to continue funding their healthcare. That will pay healthcare costs through the end of the month. What will replace it is unknown.