The Port Townsend City Council dissolved the Fort Worden Public Development Authority (PDA) during its regular council meeting June 2, thus marking the end of the city’s 16-year effort to co-manage Fort Worden Historical State Park as a public-private partnership.

City council members and staff described the dissolution as a formality, a tidying up, the last bit of unfinished business to bring the PDA era to a close. During the proceedings, little mention was made of repaying the $6.2 million owed by the PDA to Kitsap Bank.

In an unsigned letter submitted for public comment, Kitsap executives wrote about their long history of involvement and service to the Port Townsend community, “including loaning $6.2 million to the PDA. We wanted to help the Authority with its plans to improve Fort Worden Park.”

The letter suggested longtime implications of Kitsap Bank’s relationship with the city. “The subsequent failure of the PDA has caused significant harm to the Bank. In addition to the more than $6.2 million loss the bank has incurred, the handling of the matter has eroded the bank’s trust in local government, which will impact future partnership opportunities.”

The Fort Worden Public Development Authority was an independent public corporation chartered by the City of Port Townsend in 2009. In 2011, the PDA was reorganized to “manage, promote, develop, secure funding and enhance the park.” The PDA’s overarching mission was to manage and develop the 90-acre upper campus of Fort Worden State Park in partnership with Washington State Parks. Under a 50-year master lease signed in 2013, the PDA oversaw property management, hospitality services, and the coordination of educational and cultural programming at the site.

In 2022, the PDA restructured its operations, creating two separate entities: Fort Worden Hospitality, a non-profit tasked with managing lodging and events, and the Fort Worden Foundation, which was responsible for fundraising and managing historic tax credits. 

Despite the restructuring, the PDA still faced significant financial challenges, including the debt to Kitsap Bank. This debt burden, coupled with managerial missteps, the COVID-19 pandemic’s impact on hospitality services and a strategic assessement showed park operations, under the PDA model, was untenable. Those factors led the PDA board to vote for dissolution in August 2024.

On Oct. 4, 2024, Kitsap Bank, however, petitioned Jefferson County Superior Court to place the PDA into receivership, halting the dissolution process. Superior Court Judge Brandon Mack imposed the recievership and named Elliott Assett Solutions the receiver.

On Feb. 14, 2025, the Washington State Parks and Recreation Commission terminated the FWPDA’s master lease, effectively ending its operational control over Fort Worden. On March 21, Mack ended the recievership through a court order and the  Washington State Parks and Recreation Commission resumed management of the 90-acre upper campus of Fort Worden State Park.

“The receivership was a better alternative to dissolution, and the bank is disappointed that parks and the city did not support the receiver’s efforts from the outset,”Kitsap Bank executives wrote. “The City’s proposed dissolution of the PDA must provide for the satisfaction of the obligations owed to the bank. Absent satisfaction of the amounts owed to the bank, the proposed dissolution will violate Port Townsend Municipal Code § 2.84.120(C). The city should not allow the bank, which has been a loyal partner to the city, to suffer a loss of this magnitude. For all of these reasons, the bank objects to the proposed dissolution of the PDA by the city.