WAFed’s best option: Accept City’s offer on Chuckanut RidgePermalink +
Sat, Nov 06, 2010, 11:22 am // Larry Horowitz
For those who’ve been following the Chuckanut Ridge / Fairhaven Highlands issue with interest, regardless of which side you’re on, I believe all of us are ready for it to simply go away. Fortunately, Washington Federal is in a position to do just that.
With that in mind, a few days ago I sent a memo to WAFed Sr. VP Tom Kenney who serves as the bank’s Northern WA Regional Executive and oversees Horizon Bank’s former operations. I explained to Mr. Kenney why many believe the actual development value of Fairhaven Highlands is well below what WAFed may perceive it to be, and I suggested that accepting the City of Bellingham’s offer is likely the bank’s best option.
If you’d like some background information, feel free to select “Chuckanut Ridge” under the “Categories” search tool above where you’ll find 32 previous articles published on this site.
Here’s my memo to Tom Kenney:
From: Larry Horowitz, Concerned Citizen, Bellingham, WA
To: Tom Kenney, Senior Vice President, Washington Federal
Jim Doud, Board member, Washington Federal
Roy Whitehead, Chairman, CEO & President, Washington Federal
Jack Jacobson, Executive Vice President, Washington Federal
Cathy Cooper, Senior Vice President, Washington Federal
Richard Evans, Case Manager, FDIC
Jim Miller, Attorney, FDIC
Dan Pike, City of Bellingham Mayor
Barry Buchanan, City of Bellingham Councilmember
Michael Lilliquist, City of Bellingham Councilmember
Jeff Thomas, City of Bellingham Interim Planning Director
David Bricklin, Bricklin & Newman, LLP
Re: Fairhaven Highlands: Throwing good money after bad… Or … Why Fairhaven Highlands is dead in the water
Date: November 1, 2010
Dear Mr. Kenney:
I certainly appreciate that Washington Federal is doing its best to minimize its loss on the Fairhaven Highlands property it now owns as a result of WAFed’s FDIC-assisted acquisition of Horizon Bank. Unfortunately, it’s clear to many of us who have closely followed this project for more than five years that Washington Federal is prepared to throw good money after bad on a project that is dead in the water.
As you know, the Fairhaven Highlands application has secured absolutely no entitlements to date. Not a single permit has been issued from any of the agencies that have jurisdiction. Although it’s difficult to determine the rationale behind WAFed’s current strategy, I suspect the bank is following guidance you have received from the attorney who previously advised Greenbriar NW Associates (GBNW), the joint venture between Horizon Bank and David Edelstein’s Greenbriar Construction, which actually owns the property.
It is likely this attorney has told Washington Federal that, although there have been no entitlements actually secured, the development application is vested under five-year old laws that enable the project to proceed with minimal environmental regulations. I suspect this attorney has informed the bank that there is some value associated with this ability to circumvent all development regulations that have been adopted since the Fairhaven Highlands applications were submitted in April and November 2005.
Notwithstanding the moral and ethical aspects of circumventing laws specifically designed to protect public safety and the environment, any belief you might have that this project will be approved under outdated laws is misguided.
You may not be aware, but the State of Washington Department of Ecology (DOE) has jurisdiction over the majority of the wetlands impacted by the Fairhaven Highlands development. On November 12, 2009 (before WAFed acquired Horizon Bank’s assets), DOE submitted its comment letter on the Fairhaven Highlands Draft Environmental Impact Statement (DEIS). I have attached a copy for your information.
In their letter, the DOE wetland and water quality specialists state:
"The DEIS specifies that this project is vested under the City of Bellingham’s outdated Wetland and Stream Regulatory Chapter , adopted in 1991. This regulatory code does not represent the current science on wetlands and their biological and chemical requirements and limitations. Although the City may allow permit approval using this outdated code, the Department of Ecology (Ecology) will be reviewing the project under Clean Water Act Section 401 and Chapter 90.48 RCW authority, using state and federal guidance, which was developed using the best available science. All of the action alternatives would fall within Ecology’s authority under these two laws.
"Taking best available science into consideration, all of the action alternatives would cause far greater indirect impacts to wetlands and direct impacts to their buffers than indicated in the DEIS.
"Currently all alternatives proposed are inconsistent with state and federal wetland and buffer guidance and requirements. In order to avoid future costly delays during state and federal permitting, we recommend that the project include an alternative that clusters development into one section of the site, thus avoiding Category I wetland and buffer impacts and allowing habitat connectivity with large forested upland buffers to the on- and off-site wetlands."
In other words, regardless of how vesting is viewed by the City of Bellingham, none of the alternatives included in the Fairhaven Highlands DEIS will obtain permits from DOE. DOE will require wetland buffers that meet best available science (BAS). In Bellingham, the city’s proxy for BAS is the 2005 Critical Areas Ordinance (CAO), which was adopted one business day after the Fairhaven Highlands Wetland & Stream application was submitted. The Bellingham CAO calls for 150’ buffers for the majority of wetlands and 200’ for two of the Category I wetlands. By contrast, the initial Fairhaven Highlands application provides 50’ buffers.
As you may know, there is a transportation requirement associated with developing this property. The developer must either construct a connector road between Chuckanut Drive and Old Fairhaven Parkway or widen the 12th Street Bridge, both very expensive propositions. Based on DOE’s comment letter, it will not be possible to build the connector road without violating the buffer requirements, so this option is no longer available. In the past, your attorney has claimed that widening the bridge is not financially feasible. As I claimed earlier, this project is dead in the water. If you cannot build the road and cannot afford to widen the bridge, you cannot meet the transportation prerequisite and cannot obtain a permit from the city.
This leaves the option of selling the property to the City of Bellingham, a willing buyer. In his October 28, 2010 letter to Bellingham Interim Planning Director Jeff Thomas, your attorney indicates that WAFed is working to obtain “outside” agency clearances that would allow sale negotiation with the city. I suspect at least one of these outside agencies is the FDIC who is on the hook for 80% of any losses related to loans acquired from Horizon Bank. At last count, the GBNW joint venture owed more than $24 million to Horizon Bank. Theoretically, since Horizon Bank owned 50% of GBNW, half of that amount was a loan from the bank to itself. The other half, or $12 million, was owed by David Edelstein’s Greenbriar Construction. Based on the FDIC’s material loss report for Horizon, it appears WAFed has written this loan down by $16.3 million, leaving a balance of approximately $8 million on its books.
Presumably, the $8 million reflects the value of the Fairhaven Highlands property inflated for any value associated with its vested right to circumvent five-years’ worth of development regulations. Based on DOE’s comment letter, I’d say the value of that vested right is essentially zero.
It’s time for WAFed and the FDIC to recognize the fact that the Fairhaven Highlands development value is much lower than the $8 million WAFed has on its books. The likelihood of obtaining permits from all agencies with jurisdiction is virtually nil.
Why not move forward now on the City of Bellingham’s generous offer to take this property off your hands? Such an action will not only improve your bottom line, but will vastly improve how WAFed is perceived in the community.
Thanks in advance for your consideration.
Related Links:-> Oct 28 letter from GBNW attorney to Interim Planning Director Jeff Thomas
Tue, Sep 30, 2014, 8:00 am // Guest writerWherein a Fulbright scholar, professional engineer and successful business owner files for public office
3 comments; last on Sep 30, 2014
Mon, Sep 22, 2014, 5:07 am // Dick ConoboyLast Thursday, the Planning Commission voted to recommend the docketing of the spot rezone of 801 Samish from Residential Single to Commerical Planned (non-retail)
4 comments; last on Sep 25, 2014
Paper Dreams in Fairhaven
Wed, Sep 17, 2014, 10:26 am // John ServaisWe post a disturbing report of a personal encounter along Samish Way, with the permission of John Stark, who experienced it.
2 comments; last on Sep 17, 2014
Tue, Sep 09, 2014, 8:21 am // Riley SweeneyRiley and John share the short list of who might replace Cathy Lehman on the Bellingham city council on January 5.
8 comments; last on Sep 10, 2014
Mon, Aug 25, 2014, 11:48 am // Terry WechslerWhile the state spends hundreds of thousands of dollars defining risks of crude by rail, Skagit County finds no significant adverse impacts of a crude-by-rail proposal.
1 comments; last on Aug 28, 2014
Fri, Aug 22, 2014, 2:06 pm // Guest writerPatrick McKee of the Sunnyland Neighborhood guest-writes about the August 11 City Council slap-dash zoning changes.
2 comments; last on Aug 23, 2014
Wed, Aug 20, 2014, 4:54 pm // Terry WechslerNot content with causing massive inconvenience, BNSF is now literally dumping on county residents.
10 comments; last on Aug 26, 2014
Sat, Aug 16, 2014, 3:48 pm // Guest writerJudith Green of the Sunnyland Neighborhood guest writes this brief summary of what went wrong with the planning last week.
1 comments; last on Aug 22, 2014
Fri, Aug 15, 2014, 7:12 am // Terry WechslerA massive upgrade of the Cascade [rail] Corridor has left residents stranded and the sheriff asking Washington, DC, to intervene.
7 comments; last on Sep 02, 2014
Thu, Aug 14, 2014, 3:13 pm // Guest writerSandy Robson guest writes of the need for real prosperity at Cherry Point, not a destructive short term coal port that destroys the fishing grounds.
4 comments; last on Aug 18, 2014
Tue, Aug 12, 2014, 10:52 am // Riley SweeneySome Context for the Primary Results
Mon, Aug 11, 2014, 11:31 pm // John ServaisBellingham City Council abruptly changes zoning codes to force Planning Department plan on Sunnyland residents.
7 comments; last on Aug 14, 2014
Fri, Aug 08, 2014, 10:10 am // John ServaisUpdated Wed evening. The Tuesday evening 8:20 pm Auditor report on the election is in.
5 comments; last on Aug 08, 2014
Fri, Aug 01, 2014, 8:00 am // Dick ConoboyCouncilmember Murphy's proposal is based on a complaint-based rental ordinance from Tacoma, demonstrated to do little for the health and safety of tenants.
14 comments; last on Oct 01, 2014
Fri, Aug 01, 2014, 4:47 am // Terry WechslerCarefully planned actions are rolling across the state to make the point that it's not OK to expose us to risks associated with CBR.
7 comments; last on Aug 04, 2014
Thu, Jul 24, 2014, 11:40 am // Riley SweeneyNorthwest Citizen has conducted a phone poll of likely voters, with some surprising results!
9 comments; last on Jul 29, 2014
Thu, Jul 24, 2014, 7:52 am // Dick ConoboyIn contravention of the Bellingham Municipal Code, the City Council will consider on 4 August a last minute docketing request that ignores the Planning Commission and Samish Neighborhood.
1 comments; last on Jul 30, 2014
Wed, Jul 23, 2014, 10:47 pm // Guest writerGuest writer Mike Rostron explains how Bellingham city planners played loose and illegal with planning processes.
Tue, Jul 22, 2014, 7:22 pm // John ServaisSunnlyland residents win one - after a seven year effort. Planning Department failed them and all of us.
2 comments; last on Jul 23, 2014
Mon, Jul 21, 2014, 5:30 am // Guest writerLandlords are so caught up opposing a licensing and inspection ordinance, they cannot see the upside for them in ridding the city of bad rentals.
19 comments; last on Aug 01, 2014
Fri, Jul 18, 2014, 1:24 pm // Guest writerJudith Green explains how the Bellingham Planning Department is trying to cram their plan onto a neighborhood.
5 comments; last on Jul 21, 2014
Sun, Jul 13, 2014, 2:26 pm // Terry WechslerYears after BP completed its north dock, the Army Corps of Engineers released a draft EIS and it's really really stupid.
Tue, Jul 08, 2014, 8:20 am // Dick ConoboyThe city council "persuades" the city administration to withdraw a request for an intrusive police threat warning system
2 comments; last on Jul 08, 2014
Mon, Jul 07, 2014, 6:54 am // Terry WechslerIt is time we stop allowing corporations to externalize the costs associated with their risky business practices, and demand more from our regulators who hold the keys to…
3 comments; last on Jul 13, 2014
Mon, Jul 07, 2014, 5:04 am // Guest writerGuest writer Sandy Robson breaks the story of officials from Washington treated to a coal-promoting junket to Wyoming.
2 comments; last on Jul 13, 2014
Fri, Jul 04, 2014, 5:00 am // Guest writerFerndale's most famous landmark is frequently commented on and is often in the news. Here is their side of the story.
4 comments; last on Jul 07, 2014
Wed, Jul 02, 2014, 5:14 pm // Terry WechslerOn the anniversary of the Lac-Megantic disaster, communities throughout North America rally in solidarity to remember and protest wholly inadequate government response to crude-by-rail's risks.
4 comments; last on Jul 12, 2014
Fri, Jun 27, 2014, 9:01 pm // Guest writerIn the Weekly, Tim Johnson left out three words in quoting Craig Cole - and his story misleads readers. Guest article by Sandy Robson.
11 comments; last on Jul 01, 2014
Tue, Jun 24, 2014, 10:24 am // Dick ConoboyThe Bellingham Police Department wants to purchase "threat assessment" software with federal monies. Citizen comments were vehement and negative. City Council confused.
5 comments; last on Jul 03, 2014
Tue, Jun 17, 2014, 10:18 pm // Tip JohnsonWherein the failings of a bad policy framework are revealed
1 comments; last on Jun 19, 2014
Tue, Jun 17, 2014, 7:53 am // Dick ConoboyThe possession and use of consumer fireworks are no longer permitted within the city limits.
1 comments; last on Jun 19, 2014
Wed, Jun 11, 2014, 11:39 am // John ServaisWyoming Senators and coal honchos were in Whatcom County June 10 - to hold a news conference with select reporters.
7 comments; last on Jun 20, 2014
Tue, Jun 10, 2014, 11:20 am // John ServaisBellingham Hearing Examiner, Dawn Sturwold, retires in three weeks. Successor selection is hidden from all of us.
3 comments; last on Jun 11, 2014
Fri, Jun 06, 2014, 2:07 pm // Terry WechslerPart 2: Following Ken Oplinger to California, and Home Again
4 comments; last on Jun 19, 2014
Sun, Jun 01, 2014, 12:39 am // Guest writerA Venn diagram where coal, the Endangered Species Act, Republicans, and Wyoming’s Board of Education collide.
2 comments; last on Jun 02, 2014
Wed, May 28, 2014, 3:15 pm // Guest writerA perspective by guest writer Ellen Murphy reflects on the Whatcom Watch and the threatened law suit by Craig Cole.
22 comments; last on Jun 01, 2014
Tue, May 27, 2014, 1:23 am // Wendy HarrisWhy was so little consideration given to the concept of developing the waterfront for eco-tourism?
5 comments; last on Jun 11, 2014
Mon, May 26, 2014, 7:51 pm // Wendy HarrisCity park improvements have implications on the local and global scale.
2 comments; last on May 29, 2014
Thu, May 22, 2014, 12:10 am // Guest writerWyoming is ready to try and legally force us to limit our environmental scoping for the Cherry Point coal terminal
4 comments; last on Jun 17, 2014
Sun, May 18, 2014, 11:57 pm // Wendy HarrisReckless rezones and far-fetched explanations result in more slaughterhouses and meat packing plants
3 comments; last on May 20, 2014
Sat, May 17, 2014, 2:34 pm // Riley SweeneyRiley takes a closer look at the Charter Review Commission candidates
2 comments; last on May 21, 2014
Tue, May 13, 2014, 5:04 pm // Wendy HarrisBellingham's annual water quality report indicates that city hall's propoganda machine is going strong
1 comments; last on May 14, 2014
Sun, May 11, 2014, 2:20 pm // Terry WechslerPart 1: Introduction to the Bellingham Basin’s Potential for Fracking, Earthquakes, and Earthquakes Due to Fracking
3 comments; last on May 14, 2014
Fri, May 09, 2014, 10:02 am // John ServaisThe Political Junkie for Whatcom County - that would be Riley Sweeney - has Overstreet not running for reelection in the 42nd.
1 comments; last on May 13, 2014
Fri, May 09, 2014, 6:10 am // Terry WechslerWhy Washington must step in and assume lead agency status in Skagit County for the Shell crude by rail proposal.
6 comments; last on Jun 21, 2014
Tue, May 06, 2014, 5:52 pm // Riley SweeneyThe value of a Precinct Committee Officer . . .
1 comments; last on May 07, 2014
Mon, May 05, 2014, 3:34 pm // Tip JohnsonWherein the gyrations of the bid for widespread county slaughter are exposed.
2 comments; last on May 07, 2014
Thu, May 01, 2014, 10:21 pm // Guest writerMove to Amend is a national movement to amend the U.S. Constitution and define persons as people and speech as not money.
7 comments; last on Jun 02, 2014
Wed, Apr 30, 2014, 8:20 am // John ServaisRiley posted this morning that Seth Fleetwood has decided to challenge Doug Ericksen for state senate in the 42nd District.
1 comments; last on Apr 30, 2014
Mon, Apr 28, 2014, 6:28 am // Dick ConoboyEvery Bellingham Planning Commission member has ties to development or development-related businesses.
4 comments; last on Apr 30, 2014
Mon, Apr 21, 2014, 1:59 pm // Terry WechslerA closer look at Whatcom County's industrial "stewards of the environment."
4 comments; last on Aug 28, 2014
Mon, Apr 21, 2014, 11:43 am // Wendy HarrisThe public needs to support city council and request that a waterfront habitat assessment include terrestrial species and habitat connectivity.
Sat, Apr 19, 2014, 2:57 pm // Terry Wechsleror How Not to Plan for Future Generations' Water Needs
12 comments; last on Jun 30, 2014
Thu, Apr 17, 2014, 10:40 am // Riley SweeneyA simple explanation of the Charter Review and analysis of District only voting
Wed, Apr 09, 2014, 9:07 am // Riley SweeneyCity pushes for Alabama Street improvements, residents speak out
3 comments; last on Apr 14, 2014
Sun, Apr 06, 2014, 4:29 pm // Guest writerBy Christopher Grannis: Wherein despite every effort and expense, citizens cannot make the City follow the law or work for neighborhoods
2 comments; last on Apr 07, 2014
Sun, Apr 06, 2014, 12:52 pm // Terry WechslerWhy commenting on the EIS for Comp Plan revisions for Cherry Point means demanding an EIS in the first place.
5 comments; last on Jun 25, 2014
Wed, Apr 02, 2014, 6:00 am // Dick ConoboyAmbling University Development Group pulls out. University Ridge will not be built.
12 comments; last on Apr 06, 2014
Tue, Apr 01, 2014, 1:27 pm // Wendy HarrisPlease help us protect county wildlife by ensuring that the scope of the EIS review is adequate. A sample scoping letter is included.
Mon, Mar 31, 2014, 2:23 am // Wendy HarrisThe public has a week to comment on the scope of issues reviewed under the EIS.
Election InfoCandidate Filings
Primary election results
Coal, Oil & TrainsCommunity Wise Bellingham
Powder River Basin R. C.
Local Blogs & NewsBellingham Herald
Bham Herald Politics Blog
Bham Politics & Economics
Friends of Whatcom
Get Whatcom Planning
League of Women Voters
Western Front - WWU
Local CausesChuckanut Community Forest
City Club of Bellingham
Futurewise - Whatcom
Lummi Island Quarry
N. Cascades Audubon
NW Holocaust Center
Reduce Jet Noise
Salish Sea Org.
Save the Granary Building
WA Conservation Voters
Port of Bellingham
US - The White House
WA State Access
WA State Elections
WA State Legislature
Weather & ClimateCliff Mass Weather Blog
Nat Hurricane Center
Two day forecast
Watts Up With That? - climate
Edge of Sports
Famous Internet Skiers
Good Web SitesAl-Jazeera online
Foreign Policy in Focus
Innocence Project, The
Intrnational Herald Tribune
Julia Ioffe/New Republic
Middle East Times
New American Century
Paul Krugman - economics
Personal bio info
Portland Indy Media
Project Vote Smart
Stand for the Troops
Talking Points Memo
The Crisis Papers
War and Piece
NwCitizen 1995 - 2007Early Northwest Citizen
Quiet, Offline or DeadBellingham Police Activity
Citizens of Bellingham
Cordata & Meridian
Facebook Port Reform
N. Sound Conservancy
No Leaky Buckets
Protect Bellingham Parks
The American Telegraph