Fort Worden

The Fort Worden PDA board decided during its June board meeting to begin a limited reopening around Aug. 1.

The fort, like many hospitality businesses in Port Townsend, has suffered significant negative COVID-19 impacts, so this was not a decision that the board took lightly. The best-case post-COVID financial scenario that the PDA is pursuing shows a decline in 2020 revenues of $5.4 million from our approved 2020 revenue budget, a 74 percent decrease. Obviously, this would present significant challenges to any business and requires some very difficult decisions with challenging tradeoffs. The PDA is doing its best to make these decisions leveraging data and facts, with the interests of our many stakeholders in mind.

The PDA would like to respond to a few points raised in the June 17 Leader article titled “Fort Worden partners look to future of campus.” The PDA has made it a practice to not engage in back-and-forth dialogue through the lens of the press. But, the article contained some comments and opinions that were not fact-based and have created concerns noted through emails we have received from existing hospitality customers with pending reservations, thus warranting this response.  

When we began managing Fort Worden in May 2014, we initially built our business on leisure (vacation) bookings as a way to both grow our business and add an additional customer segment to the existing Partner businesses, which have historically benefitted from subsidized rates. We knew we had to grow leisure reservations to be sustainable because when hospitality services were operated by Washington State Parks it had historically resulted in significant operating losses.  

The PDA does not currently have plans to move away from leisure or group bookings (as stated by Rob Birman in the June 17 edition), which has been the engine for the fort’s sustainability during our first six years. Leisure bookings are what enable the fort to reopen! In fact, leisure and group customers pay comparable rates to other local and regional lodging facilities, which allows us to offer more advantageous rates to our partners to support their programs and our lifelong learning mission.

While it is accurate that Centrum is currently on a month-to-month lease, all partners had longer-term leases until they expired last year when we began to participate in active lease negotiations to develop the criteria for long-term leases. With the advent of COVID-19 and the immediate crisis at hand, we informed the partner’s negotiating team the PDA needs to focus on the fort’s sustainability and navigate the PDA through these challenging waters, and will resume negotiations again in early 2021. It would be imprudent of the PDA to negotiate lease terms when we are uncertain of the future business model for the fort.

The fort’s historic buildings have an unfunded deferred capital maintenance somewhere between $80 million to $100 million. Capital maintenance requires significant investments to protect the building and extend its useful life. At the same time, normal maintenance and repair are expenses required to keep the fort’s hospitality spaces and grounds open for business. Washington State Parks agreed to continually provide normal (annual) maintenance and repair at the fort through May 2018, including grounds and building repairs. Both maintenance needs — capital and annual maintenance — are very real expenses, and necessary for the day-to-day operation of Fort Worden.  

While partners are required to manage normal maintenance and repair for their exclusive-use buildings they lease, this expense is separate from the $645,00 in annual normal maintenance and repair costs the PDA spent during 2019 (reported as $500,000), which needs to be paid from the PDA’s operating revenues. Upon completion of Makers Square this fall, the PDA will have invested more than $15 million in major capital improvements since assuming management of the fort’s campus.  

While the PDA’s first six years have been challenging, the fort has grown to be an important economic development engine for the city and local businesses alike. While our staff and board work to navigate this crisis and reimagine our business model for future, long-term sustainability, we will continue to communicate a fact-based approach and be as inclusive as possible with our community, partners and stakeholders.  

(Todd Hutton and Norm Tonina are co-chairs of the Fort Wordon Public Development Authority; Dave Robison is the PDA’s executive director.)