An empty Union Bank building at 2200 Sims Way could become headquarters for Jefferson County Public Utility District (PUD) depending on the outcome of a 90-day review.

Jefferson County PUD commissioners voted unanimously June 6 to enter into a purchase and sale agreement with MUFG Union Bank of San Francisco to buy the building for $1.2 million – if it passes an environmental inspection and a feasibility study.

“I think there is an agreed-upon price. However, there’s a lot of inspections that need to be done, and whether that’s the final price remains to be seen,” said Ken Collins, PUD board president. “There are a variety of issues having to do with handicapped access and possible environmental issues. This is just the beginning of what could be a complicated process.”

EMPTY SINCE 2015

Branches of Union Bank in Port Townsend, Port Angeles, Sequim and Poulsbo closed on Feb. 20, 2015, and the building in Port Townsend has sat empty since that time.

Mallory Bahmani, a transaction management contractor for MUFG Union Bank, who is named in the document that the board signed, declined to comment Monday via email on what she did call a “pending sale.”

The property has been assessed at $1.2 million by the Jefferson County Assessor’s Office, with the building value listed at $838,000, and the land value listed at $374,000.

NEED FOR SPACE

“The purpose of buying the Union Bank building would be to consolidate,” Collins said.

Currently, the PUD has three locations: two in Port Hadlock, where the administration is divided between its small headquarters at its original office at 230 Chimacum Road and another space it is leasing at 211B Chimacum Road across the street in the former Hadlock Realty office; and a third location at the former Puget Sound Energy headquarters at 310 Four Corners Road, where there is staff as well as line-crew members.

Since the public utility purchased the East Jefferson County holdings of Puget Sound Energy in 2013, it has grown from a water utility of eight employees to a water, public power and future broadband utility, with 45 employees.

“There’s the likelihood that in the next year, we may be up to 50 people,” Collins said.

PUD officials have been looking for a facility to house all those administrative employees and have been eyeing the old bank building for months. The line crew would remain at Four Corners, where trucks and other equipment are stored.

“This would allow the PUD maximum flexibility, and although there is a price tag of $1.2 million, the cost of constructing a new building that would suit our purposes, based on the [Jefferson] Transit building and others, you are talking about $7 million to $10 million,” Collins said. “If this works for us, it’s very significant savings.”

What Collins says he likes about the bank building is that it has parking and a drive-through window as well as a meeting room. The current meeting room in the Port Hadlock headquarters is often overflowing, he noted.

“Its setup would be ideal for us and certainly ideal for customer service,” Collins said of the Union Bank property.

Collins said that it is not a done deal and that the $60,000 deposit to do a 90-day evaluation and option to extend that for $20,000 allows the PUD to evaluate it the property. Both deposits are refundable if the district opts not to pursue the purchase, attorney Richard Hughes told the board.

“We can walk away based on what the inspection shows,” Collins said of what his understanding is of the deal.

Hughes urged the board during the meeting to pursue an environmental evaluation, and the board agreed.

EXECUTIVE SESSION CONCERNS

Tom Thiersch, who recently won an $18,000 judgment against the PUD over violations of the state Open Public Meetings Act dating back to meetings in 2015, raised concerns in an email about the board going into an executive session to talk about the proposed deal, citing as its reason the purpose of considering the selection or site or acquisition “when public knowledge regarding such consideration would cause a likelihood of increased price.”

Going into a closed meeting to talk about a sale is allowed; voting to spend public money in a closed meeting is not allowed.

What Thiersch objected to is that the board had already included the agreement with Union Bank in its board packet for the meeting.

“I don’t understand how that executive session was legal or why you even thought it was needed, considering the fact that the board packet, which was made available and distributed to the public at the start of the meeting, already included the purchase agreement for the property and for which in particular stated the property’s price and terms,” Thiersch wrote.

Thiersch referred to a recent state Supreme Court decision involving the Port of Vancouver, which lost a case involving real estate discussions in executive sessions.

Collins said that the board needed to talk with attorney Hughes because he had had a more recent conversation with bank officials.

“We needed to have a discussion about our negotiation strategy and coming back with a different kind of offer,” Collins said.

Collins noted that the board voted on the agreement with the bank in an open public meeting.