According to its management, fault for the failure of Fort Worden Hospitality lies with the larger failure of the park’s Public Development Authority’s (PDA).

“This decision comes as a result of the financial and legal challenges (facing PDA) resulting in the PDA losing their lease,” said Natalie Maitland director of operations for Fort Worden Hospitality, which closed its doors on Jan. 16, leaving 47 employees jobless and nearly 300 event and accommodation bookings cancelled.

“As such, Fort Worden Hospitality’s concession agreement, to provide hospitality services on campus is no longer valid. Without a contract to operate, Fort Worden Hospitality must close.”

Kitsap Bank’s intervention in October 2024 put the PDA in receivership, which resulted in ambiguity of agreements and ongoing legal uncertainties, said Matt Gurney, chief executive officer of Fort Worden Hospitality. While Fort Worden Hospitality attempted to provide continuity of services during the uncertainty, Gurney said, the inability to market, promote and sell future business crippled the organizations business prospects.

“Despite extensive efforts, which include substantial financial investment in the campus; the challenges of the PDA, and the current lack of valid contract, as well as the state of legal issues forcing continued delays, leaves Fort Worden Hospitality without the ability to operate on campus today, let alone confidently build a sustainable future,” Gurney said. “Fort Worden Hospitality’s closure became an inevitable outcome, when the PDA’s underlying master lease was rejected, making it impossible for Fort Worden Hospitality to continue.”

It may turn out to be a little more complicated than that.  While most players connected to the park would acknowledge that the PDA’s dissolution has caused myriad financial and legal repercussions, there are some stung by Hospitality’s closure that say the organization should have seen this coming and taken appropriate measures to take care of its clients sooner.

“Fort Worden Hospitality blames Fort Worden PDA for its decision, claiming the ‘financial and legal challenges’ of its landlord compelled their decision,” wrote Mark Roye in an email to The Leader. “While indeed the PDA debacle likely precipitated the Fort Worden Hospitality shutdown, asserting that the landlord’s problems resulted in their own rip-off of customer’s funds is not simply disingenuous — it may well be fraudulent as Fort Worden Hospitality has known of these issues for many months but accepted deposits nevertheless.”

Rich Rackowski said he has lost his deposit for a family reunion and doesn’t know where to turn. “Fort Worden Hospitality is not so hospitable,” wrote Rackowski, in an email to the Leader on Jan. 18. “We reserved a house last August for a family vacation and paid in advance as we did for the past three years. We got an email today saying ‘no house and we’re keeping the money,’ the email was signed ‘best’.”

David Timmons, who served as executive director of the PDA from November 2020 to September 2023, pinpointed a different problem with Hospitality, going back in time, well ahead of the recent PDA dissolution and the court’s installment of the receiver. As a tenant, Timmons said, Hospitality didn’t want to pay — anything.

Timmons took the helm of the PDA when it was struggling with financial troubles made worse by COVID-19 shutdowns.

Timmons, who was working to come up with a shared way for all tenants to pay utilities, said he experienced resistance from Hospitality.   

“What really didn’t help was Hospitality just refusing to pay anything,” Timmons said. “That’s easy to document — they weren’t paying their bills.  It’s there in the records, the way they talked about it, month after month. I was told that I couldn’t address it, that the matter would be addressed by the two treasurers of the organizations, but it was just never resolved.”

Big impact to Centrum

Centrum, the biggest private player at the park, is taking steps to maintain its 2025 programming and has been talking with officials at the Washington State Parks and Recreation Commission since August.

“Centrum is pursuing every opportunity to continue to run its festivals and programs at Fort Worden State Park throughout 2025,”said Rob Birman, Centrum’s executive director. “In order to do so, we are considering independently servicing accommodations for our workshop attendees and arranging independent food solutions for them. This would mean taking on these responsibilities (temporarily) as Fort Worden Hospitality, the previous provider, is ceasing operations effective Jan. 16. There is no immediate successor to Fort Worden Hospitality in sight.”

Birman said it appears ever more likely that the Washington State Parks and Recreation Commission (State Parks) will once again assume responsibility for managing Fort Worden.  

“Centrum has had extensive meetings with State Parks and is optimistic that we will be able to reach the necessary arrangements that can facilitate our ongoing workshops and festivals,”Birman said. “If we can quickly resolve outstanding matters with State Parks and clarify how we could handle food and lodging for our workshop attendees, then we can open enrollment for our 2025 programs by the end of January.”

Birman said he hopes Centrum will have clear path forward before the end of January.

Birman said that Centrum and State Parks have worked in partnership for 40 years, and he remains optimistic that the two organizations can reach agreements that bode well for Fort Worden’s future. 

Fort Worden Hospitality responds

When asked when Hospitality stopped taking event and lodging deposits, Maitland did not answer the question. When asked how much money Hospitality had collected, and owed in deposit refunds, Maitland sidestepped the question.

“We generate several million dollars a year,” Maitland said. Asked how much money had been collected in terms of deposits for the 300 cancelled bookings, she referred to an unnamed economic impact study. “The economic impact study done earlier this year at the park adds up all of that together.”

Maitland did not confirm whether Hospitality would refund deposits, but she did say those who paid deposits have been advised to contact their credit card companies to dispute charges for services not rendered. She also said the Fort Worden Hospitality’s lender will oversee the next steps concerning the organization’s assets.

She also provided some background on what led up to Hospitality’s failure. “Fort Worden Hospitality had been working with Washington State Parks since early summer 2024 to establish a direct long-term agreement for hospitality services at Fort Worden State Park,”Maitland said. “By October 2, 2024, a comprehensive agreement had been drafted and approved by the Fort Worden Hospitality board, ready for signing.”

Maitland said that agreement tanked on Oct. 4, when Kitsap Bank intervened by initiating receivership proceedings against the Fort Worden Public Development Authority, leading to legal uncertainties and halting the progression of the agreement.

“Despite these challenges,”Maitland said, “Fort Worden Hospitality continued to engage with Washington State Parks in good faith, aiming to finalize the agreement and maintain operations. Throughout late 2024 and early 2025, Fort Worden Hospitality explored every possible avenue to remain operational or collaborate with stakeholders to transition the business to another operator. Unfortunately, by the week of January 12, 2025, these efforts were unsuccessful, leaving Fort Worden Hospitality with no alternative but to cease operations.”

The PDA’s most recent troubles began in earnest on Sept. 27, when the organization, originally chartered by the City of Port Townsend in 2009, sought formal dissolution, through city council, due to insolvency. As a chartered organization, and according to the Port Townsend Municipal Code, the PDA board required city council’s approval for dissolution. In the days that followed, and on the verge of losing $6.2 million in unpaid loans, executives with Kitsap Bank implored Jefferson County Superior Court Judge Brandon Mack to install a receiver to help the bank recoup its cash.

On Oct. 4, Mack turned the defunct PDA over to Elliott Bay Asset Solutions. That Bellevue-based firm was tasked with recouping the $6.2 million the PDA owed to Kitsap Bank for a series of revenue bonds dating back to 2018. However, and because Washington state owns the park and the buildings on the campus, the PDA had no collateral for those loans other than the future promise of revenues generated from user fees such as special event fees and hospitality bookings. The receivership, since its installation on Oct. 4, has learned the same, and with the shuttering of Fort Worden Hospitality, the receiver’s prospects of collecting on those loans appear more grim. 

According to court documents filed in December 2024, the receiver’s PDA management team and its attorneys are billing, on average, $310 an hour. However, without revenue coming in to the PDA, and despite court approval authorizing payment of the receiver’s professional fees, it remains unclear if Elliott Bay Asset Solutions has been paid. Without park revenue, those fees would likely become the responsibility of Kitsap Bank. According to recent court filings and sources inside the park, fees for utilities, repairs and maintenance remain unpaid.