Questions about a proposed agreement with a newly formed nonprofit that would take over lodging, restaurants and other hospitality activities at Fort Worden prompted officials with the Fort Worden Public Development Authority to push back by a week their expected approval of the contract.

Board members for the Fort Worden PDA met last week to approve a concession agreement with Fort Worden Hospitality for the non-charitable nonprofit to take over duties once done by the PDA.

The PDA, which manages the 95-acre campus at the heart of Fort Worden under a lease from Washington State Parks, was hit by a tsunami of debt last year that threatened the agency’s existence.

Last October, the PDA announced it was more than $5.3 million in debt — officials noted last week that amount has since dropped to $3.3 million — and started work on a restructuring plan while trying to renegotiate the public agency’s debt.

While the concept for the reorganization was announced last year, work continues on the details.

At their meeting last week, PDA board members reviewed the proposed concession agreement with its new nonprofit, called Fort Worden Hospitality.

PDA Executive Director David Timmons told board members that more review was required before the contract could be approved.

Some of the language in the agreement also needs to be changed to fit with the agency’s lease for Fort Worden with the state. That includes a change in the length of the agreement.

Originally set to span 30 years, Timmons said the contract’s term should be shortened to 20 years based on legal advice.

A contract of 25 years or longer would need to be approved by the Washington State Parks and Recreation Commission.

Timmons also said Washington State Parks officials had questions and wanted another week to get additional information.

“They have some questions that they want to get clarifications on,” Timmons said.

“I don’t believe there is going to be any material changes,” he added.

The board agreed to withhold a vote on the agreement until a special meeting could be held, now planned for Wednesday, June 2.

SPECIAL MEETING CALLED

The draft agreement still had missing pieces as of Tuesday,
June 1.

An exhibit covering marketing, pricing, equipment and other items was still “in process” earlier this week, according to the public review packet on the PDA’s website.

A second exhibit in the 25-page agreement that includes the facilities to be used by Fort Worden Hospitality was also largely blank in the public review copy of the agreement.

PUBLIC ASKS FOR TIME

Before last week’s meeting, several members of the public said the PDA was making a rushed decision on the hospitality agreement.

Mark Blatter, a Port Townsend resident, asked: “Why the hurry?”

“I was the director of real estate development for Historic Seattle PDA, and most of my work life has been with nonprofit community and affordable housing developers,” Blatter told the board.

“I’ve asked many questions over the course of your reorganization planning, and some of them were even answered. Yet after all the time I’ve spent trying to understand the plan, its context, and how it will impact the long-term health of the Fort and Port Townsend, I’m left with many more questions and your assurances that this specific plan is urgently needed and must move forward immediately,” he added.

“Let’s give the community the chance to understand why no other models work, why investors and lenders need a new organization to support hospitality operations, why government and foundation grants can’t be made to the PDA through the Fort Worden Foundation. And why the plan reduces income to the PDA as well as opportunities for community members to have their voices heard,” Blatter continued.

Blatter criticized the board for its fast pace on the reorganization and a lack of public input.

‘SCANT COMMUNITY PROCESS’

“I’m skeptical that the plans you are proposing will achieve the mission, provide public benefits, be supported by the State Parks Commission, and garner public support. The scant community process and rush to get this through seems to say you agree,” Blatter said in a letter to board members. 

“Please delay your decision to assign the fort’s hospitality operations – and the millions in earned income — to a private corporation focused on the business at the expense of programs and preservation,” he said.

Paul Eisenhardt of Port Townsend also raised concerns about the amount of public review of the PDA’s plans.

“Please look beyond the recent lack of proper management and further review the proposed restructuring. Teaming with another organization may indeed be an excellent idea. BUT, the terms and conditions, as proposed, deny the Port Townsend/Jefferson County communities adequate inputs, ability to hold the new organization accountable, and a significant lack of financial sharing with the PDA for future learning programs,” Eisenhardt said in a comment letter to the board.

“Please do not proceed at this time. Significant workshops with the local public / citizens should be held for inputs and working sessions on key topics,” he added.

“Please slow down and allow more open dialogue before you seal this plan,” added Val Stewart of Port Townsend.

“I don’t see time or attention being given for discussion on practical suggestions and concerns from the public,” Stewart continued. “It’s understandable that the PDA needs to get its financial act together quickly but with the restrictions of COVID, more time is needed to involve the public in these far reaching decisions.”

“After the financial mismanagement disclosed in 2020, the public appears to have lost trust in PDA’s ability to manage its finances and employees. To regain confidence in the PDA and the proposed Hospitality Group, it seems that more transparent financial disclosure to the public is the correct way forward,” Stewart said in a comment letter to the board.

Craig Stewart added his voice to the same letter: “I really don’t understand why they are proposing that FWH [Fort Worden Hospitality] be a nonprofit.

“I’ll be surprised if the IRS classifies FWH as a nonprofit. I can’t imagine many donors having any interest at all in contributing to a hospitality nonprofit. It makes no sense to me! They have a Fort Worden Foundation.

“With multiple foundations on the campus, it’s likely that everyone could be competing for gifts from the same donors. Who is paying for the deferred maintenance? Again, not an attractive opportunity for most donors,” he added. “This should be the responsibility of the PDA and the Fort Worden Foundation.”

OTHER EXAMPLES WANTED

“I wonder if there are similar examples of what PDA is proposing that they can point to that have proven to be successful? If so, I want to hear about them!” Stewart said.

Norm Tonina, co-chair of the PDA board, disputed claims of a rush to judgment. Officials with the PDA have consistently said the reorganization proposal has been talked about during the authority’s regular public meetings, which have been held online since the start of the COVID-19 pandemic.

“The sense that we’ve been in a hurry, my guess is, there probably aren’t many people on the board that really agree with that,” Tonina said.

“We’ve been at this since October,” he added, recalling initial talk on potential reorganization scenarios. “We have been discussing this in frequent meetings since November.”

“I think it’s important for people to just remember that,” Tonina added. “We have taken public comment at all of our meetings and so we’ve taken that public comment seriously.”

BUSINESS ON THE BOOKS

Officials have been considering a July 1 date for Fort Worden Hospitality to detach itself from the PDA. A separate board would oversee the operations of the nonprofit.

Tonina said it was important to make the change because Fort Worden has lodging and other commitments to uphold.

“The reality is the hospitality corp has business on the books that they need to meet at this point,” he said, and also has to be able to hire staff.

Washington State Parks officials would not provide any details on the parts of the concession agreement that needed clarification.

“We are still in the midst [of] reviewing the PDA-Fort Worden Hospitality concession agreement,” Peter Herzog, Washington State Parks’ Assistant Director for Parks Development, wrote in an email to The Leader.

“It wouldn’t be appropriate for me to get into specifics before we’ve completed our review, but of course we will be happy to share our comments once we’re done,” he added.