The Inn at Port Hadlock likely will see another Christmas come and go without being open.

Last Christmas, affordable housing advocates were hopeful that the inn – which was shuttered in June of 2011 – would be reborn this year as Bayside Hotel, a place where those in need of clean, affordable housing could find temporary sanctuary.

For now, those hopes are on hold. A lease between Bayside Housing & Services, a 501(c)(3) nonprofit led by John Cantlon, and the inn's owner, Gary Keister, is in default, Cantlon said.

“We're heartbroken,” Cantlon said on Sept. 28. “There's a lot of momentum that you get from starting and if you stop and take a breathe, you lose your momentum. But at this point, you can't spend money you don't have.”

Cantlon said that when a licensing inspection was set up in June, it had to be canceled because so much was unfinished.

“There was a lease and we were making payments but we stopped. We had hoped to occupy it by April,” said Cantlon.

Keister said that it has been a challenge to make necessary repairs and that some original estimates for repairs didn't hold up, and cost more than he anticipated.

“I would say that we are close to 90 percent finished now and we've related that to John last Friday,” Keister said on Sept. 28.

“It certainly has been difficult for them to hold on and do the fundraising that they need to do without having a facility available to them and we obviously couldn't turn it over to them until these things are completed,” Keister said.

He added he thought it would be another month to a month and a half before repairs were finished.

WORK MOTHBALLED

The Bayside executive director was laid off effective today, Sept. 30. She was the only paid employee, Cantlon said.

When it became clear that things weren't going as quickly as had been hoped, Cantlon said that all the work that had been done, including writing operations manuals and personnel manuals were put on thumb drives, and office supplies were bundled up for storage.

Bayside left the building, concluding the 10-year lease had been broken. Keister remains, and the property is posted with no-trespassing signs.

Cantlon and Keister acknowledged that the nonprofit group and Keister continue to talk and both are committed to converting the former inn – that was closed and fallen into bankruptcy before being purchased by Keister – into a unique housing project.

The goal would be to rent out 10 of 33 rooms at market rate, which would then help subsidize the other rooms to be used as transition affordable housing. The property is zoned for a hotel and it can't be used for anything but a hotel, Cantlon said.

“A mix of payers was part of the plan overall. We don't want to ghettoize the people we are serving and put them in a corner all by themselves,” Cantlon said, noting that he knows there are women with children, for example, who need a place to stay while they work at getting back on their feet.

“It is still a viable thing,” Cantlon said of Bayside's business model.

Cantlon estimated that Bayside has received donations and loans of about $60,000 so far, but fundraising has been put on hold.

“I think it is a good idea for this community because it solves a problem. Transitional housing is out of favor with the state. But this is innovative,” Cantlon said.

CONTINUED AWARENESS

“I would hope that the public would stay aware of this project and continue to believe it's a good idea and that they absolutely believe that I won't ask for any more help unless I can see there's a possibility for this to actually get started and run for awhile,” Cantlon said.

Cantlon said the issue is having a safe building that can be rented out and that can start to make money. Without that, employees can't be hired and Cantlon said he didn't want to do more damage than good by hiring people that he couldn't keep employed, and renting rooms to people that couldn't depend on Bayside for help.

“We need to be mindful of the population we are serving but also the employees. If I open in a month and then close in a month, then I haven't helped anyone,” Cantlon said.

Cantlon said Bayside's board has a good working relationship with Keister.

“There is certainly hope for resurrection or we wouldn't have mothballed it the way we did,” said Cantlon.

Keister said he has been associated with other projects, including in Seattle where homes owned by Housing and Urban Development were sold at the height of the housing market and used to build 50 units called Monica's Place.

“Oftentimes these kinds of things evolve. We started this three years ago and we thought it would look one way and barriers came up. You have to be persistent,” Keister said.

Keister was aware, as was Cantlon, that a long-ago business dispute involving Keister had prompted concern in church circles.

But both say they are committed to the original intention of using the inn to help people with housing challenges.

“I would never have gotten into this but to do affordable housing. We've had challenges, and now with the delay, but it remains our intention to use it for the purpose for which it was intended and that was to provide affordable housing,” said Keister.

“We knew we had to do some renovations, but it became more of a project than we thought it would,” Keister said.

PROPERTY HISTORY

The property at 310 Hadlock Bay Road was first developed in 1911 to convert sawdust into alcohol, hence the name by which some business operations were originally known: The Old Alcohol Plant.

The property was vacant from 1913 until the 1980s, when it was remodeled into a resort. A series of business owners have tried, but failed, to keep the property open as a resort.

It's the section between the old plant and the remodeled section of the inn that was vexing, Cantlon said of repairs that are needed. Some of the construction that was done remodeling the alcohol plant as an inn damaged the underlying infrastructure.

The Inn at Port Hadlock, the last incarnation of the property, was the second-largest hotel in rural East Jefferson County when it closed on June 30, 2011. Signs for the inn remain.

Suki James was the last owner of the Inn at Port Hadlock. M. Suki Co. LLC paid $3.15 million for the property in March 2008. That company failed to pay state taxes of $128,848 and its hotel certification was revoked in 2011.

Umpqua Bank, a successor by merger to Sterling Savings Bank, which was a successor by merger to Borrego Springs Bank, foreclosed on the property and sold it for $852,000 on Dec. 12, 2014 to Inn Properties LLC of Port Townsend.

Wescom Capital Inc. is listed as the agent for Inn Properties. Keister is the chairman of Wescom Capital.

Bayside had announced its intentions for the affordable housing project at the inn last December, right before Christmas. At the time, they hoped another winter would not pass without the inn being open.