Homeward Bound out, Bayside Housing in on PT project

Posted 10/1/20

Disappointed, but determined.

Port Townsend will forge ahead with the troubled Cherry Street affordable housing project, but with a new nonprofit partner.

Councilmembers decided 6-1 Monday to …

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Homeward Bound out, Bayside Housing in on PT project

Posted

Disappointed, but determined.

Port Townsend will forge ahead with the troubled Cherry Street affordable housing project, but with a new nonprofit partner.

Councilmembers decided 6-1 Monday to start negotiations to transfer the eight-unit affordable housing project from Homeward Bound to Bayside Housing & Services and sell the former Carmel Building to Bayside.

With Homeward Bound financially unable to finish the project, city officials said the council had two financially viable choices: push forward with the project with a different entity in charge, or sell the land and building outright.

Councilmembers said the chance at getting additional units of affordable housing, however, was worth plugging more money into the project. 

Councilmember David Faber said he was disappointed that the first attempt, with Homeward Bound, came up short.

Faber added that the project, when finished, would add eight units of affordable housing to Port Townsend’s permanent supply of low cost housing.

“We do need perpetually affordable housing,” he said.

“Affordable housing takes subsidy; it takes skin in the game,” Faber added, and said the project was still worth doing, frustrations aside.

“This is the way we get this done,” he said.

Councilmember Monica MickHager, who eventually voted against keeping the project alive, suggested a different approach.

“I would like to see us sell the land,” MickHager said.

Homeward Bound “tried gallantly,” she said, to finish the project.

But MickHager also said some in Port Townsend did not support the effort.

“This project is not settled well with our community,” she said, and said more input should be taken from the public. Some have been upset about “dark of the night” votes on the project in years past.

“I feel we need to hear from them. An advisory vote, something. Do they want it this way?” MickHager said.

“We should hear from our community,” she said.

Others on the council pushed back at the notion that the public had been left out.

“I don’t think this was done in the dark,” said Mayor Michelle Sandoval. 

Sandoval said she understood there has been some public grumbling about the project, but said the effort was always going to require city support.

“You do not get affordable housing without subsidy. Period,” she said. “We were always going to subsidize this project.”

NEW OPTIONS

Work on the project to convert the former Carmel Building into affordable housing began in 2017, when the structure was barged to Port Townsend from Victoria, B.C. on a $250,000 loan from the city to Homeward Bound.

The building was placed on a city-surplused plot on Cherry Street, for the purpose of affordable housing.

The city approved a 20-year bond for $834,000 in 2018 for planning, design and engineering for the project, and also inked a 40-year loan agreement with Homeward Bound for $925,000.

Costs for completing the project have grown ever since. Late last year, officials with Homeward Bound said the project would need another $1.3 million to finish.

And earlier this year, Homeward Bound began talks with the city to delay its first loan payment by
90 days, from July 1 to Oct. 1.

Discussions soon shifted to Bayside buying the property for a nominal amount, and taking over the project.

At Monday’s special council meeting, the council was given five options; approve the proposal with Bayside; do nothing with it; refer it to committee; send it back to city staff; or make a decision later.

Officials noted that letting Bayside take over would mean the preservation of the original goal of the project: creating eight units of affordable housing.

“There’s a critical shortage of affordable housing,” said City Manager John Mauro.

Bayside would not take on any of the outstanding debt of the project, and the city would use the remaining bond funds of $307,606 to pay for planning, engineering, design, permitting and other preconstruction costs.

Under the second option, the property would be sold for the highest possible price, and money from the sale could be used to pay off the city’s debt.

Officials noted that under that scenario, the building would likely not stay as affordable housing.

Under the third option, which officials said was less feasible, the city would take over the project and convert the building into affordable housing.

Officials noted the city would need to take on additional debt, as $1 million would be needed to complete construction. Rent revenue would also be unlikely to cover the debt on the project.

The last option was to do nothing, and instead let the property sit until the building was eventually demolished.

LIMITED COMMENT

There was little public comment before Monday’s vote to switch to Bayside.

Former councilmember Bob Gray suggested listing the Cherry Street property for sale.

“The sentence in the material that the public and city council should question is ‘Bayside would not assume any debt.’ In other words, Port Townsend residents will assume the debt,” Gray wrote. “The debt in question is $65,000 annually for the next 20 years.”

He added that if city staff and the city council “have given up on the many volunteers who dedicated their time, expertise, and resources on this project and the people who supported Homeward Bound through their paid memberships, then you should try to sell the property.”

The city should put the property on the market to see if developers were interested in turning the Carmel Building into “much needed rental property.”

“Residents should not pay for this with higher taxes or lower services,” Gray noted.

WORTH THE RISK

But during the council’s discussion, Sandoval said she didn’t think a change in the project’s nonprofit leadership was an affront to the volunteers who had worked to convert the building into affordable housing.

Instead, the city would be honoring their commitment to continue on.

It was a sentiment shared by others.

Councilmember Ariel Speser said everyone would have liked to see Homeward Bound be successful.

Port Townsend isn’t unique, she added. Other cities have experienced greater-than-expected costs for affordable housing efforts.

The Cherry Street project itself was still salvageable, she added.

“The team is resilient. The team is committed to it,” Speser said.

Councilwoman Pamela Adams agreed the project had been complicated and messy, and some people weren’t happy about its history of ups and downs.

In the end, what was important was more units of affordable housing — not a chance to pay down the debt instead.

“To me, that’s why I’m voting for it,” Adams said.

Councilmembers said that although some may be critical of the Cherry Street project, the community as a whole views affordable housing as essential to the community.

“I’m not willing to give up that dream,” Sandoval said.

“I think it’s a great solution to a problem, a real problem,” she said.

Comments

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HarveyW-Collateral Damage

"There was little public comment before Monday’s vote to switch to Bayside".

This was not done "in the dark" says Appointed Mayor and 20 year Council Member Sandoval. First light is this story. Business as usual.

Not explained is the value of the parcel if sold, and could that amount be applied to another project not in the hole? Does the city have other parcels?

What is also not explained is what is in this for Bayside. Is there to be other development on the parcel later? Why is the cities full $307,606 to pay for planning, engineering, design, permitting and other preconstruction costs in the new Bayside takeover needed? Wasn't that done for the previous project? Seems the City could grant some leeway with original permitting etc. The city must get along with the city better than some of us.

Not explained is what caused...... "Costs for completing the project have grown ever since. Late last year, officials with Homeward Bound said the project would need another $1.3 million to finish."

Is this related to talk of lead and asbestos removal costs? Squatter zombie removal? Who mis budgeted so badly? Who didn't do their homework in a couple of areas? Who wants this to go away with little public oversight and fuss?

You the voter are left with questions and a bill. “The debt in question is $65,000 annually for the next 20 years.”

Are people who screwed it up determined not to have a losing project as a legacy next election? The only person to vote to sell has no worry of a tarnished project. A business person. What is the bottom line in this story? Bob Gray has some common sense and says sell. Seems the City Council is still in lock step. Don't trip in the dark. Explanations welcome. Educate me.

Friday, October 2
Mike Galmukoff

Is there more to the story? There appears to be... https://www.porttownsendfreepress.com/2020/10/02/latest-cherry-street-giveaway-hits-taxpayers-harder/

Friday, October 2
HarveyW-Collateral Damage

Thanks for the link. So this is what in depth reporting looks like. At least one major Leader advertiser, the 3 time Appointed Mayor on Council for life won't be happy. Enjoy the benefits but take the responsibility for this and so much more Appointed Mayor Sandoval. Incumbent Council too.

What about City Manager Mauro's "Engage PT" campaign? Just a PR stunt?

"The City Manager would not tell (new council person Mickhager who did not have anything to do with this fiasco) how much the land could be sold for. In so doing, he was also withholding this information from taxpayers. Only in executive session would he disclose that information". Seems the real estate franchise owner Appointed Mayor would know.

Engage PT? The jig is up Mr Mauro. Same old methods all the way around. Remember the 1.2 million way over priced no public input concrete heavy "park" at the visitor center and more when its time to elect new Council and send old baggage packing. Its a long way back to a professionally run city.

Friday, October 2
HarveyW-Collateral Damage

This news just in.... a source with construction ties just told me that the process by the city for permitting the original project cut corners and ignored laws and codes. The building is said to be sitting on a city water line among other things. The property may well have a negative value when all is considered. "Engage Port Townsend" as your PR piece said you would, Mr. Mauro and your boss Appointed Mayor Sandoval. Please explain. Leader or Free Press should follow up. Is the land now valueless or have a negative value unless a city sponsored partner steps in? Is that the reason for the top secret closed session only aspect as to value of the land? Is that the reason for a no public input 'fix"? Please continue to educate myself and others. This can't be as it looks. Engage.

Friday, October 2