WAFed’s best option: Accept City’s offer on Chuckanut RidgePermalink +
Sat, Nov 06, 2010, 10:22 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
Wed, Apr 09, 2014, 8:07 am // Riley SweeneyCity pushes for Alabama Street improvements, residents speak out
3 comments; last on Apr 14, 2014
Sun, Apr 06, 2014, 3:29 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, 11:52 am // Terry WechslerWhy commenting on the EIS in Comp Plan revisions for Cherry Point means demanding an EIS in the first place.
4 comments; last on Apr 13, 2014
Wed, Apr 02, 2014, 5:00 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, 12:27 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, 1:23 am // Wendy HarrisThe public has a week to comment on the scope of issues reviewed under the EIS.
Fri, Mar 28, 2014, 12:32 am // Wendy HarrisOn March 26, 2014 the city and county provided their update and assessment on the status of Lake Whatcom. This is mine.
2 comments; last on Apr 01, 2014
Wed, Mar 19, 2014, 9:32 am // Riley SweeneyRiley digs into the county's plan to buy the county morgue
3 comments; last on Mar 24, 2014
Sun, Mar 16, 2014, 11:52 pm // Wendy HarrisThe public is not provided with a proposed plan or adequate information prior to the annual "state of the lake" meeting
4 comments; last on Mar 18, 2014
Sat, Mar 15, 2014, 12:11 pm // Tip JohnsonWherein there's a crackdown on growing plants, and plans to let slaughter run free
2 comments; last on Mar 16, 2014
Fri, Mar 14, 2014, 9:47 am // John ServaisFukushima radiation has been found 20 miles from Whatcom County farmland along the Fraser River in British Columbia.
1 comments; last on Mar 17, 2014
Wed, Mar 12, 2014, 7:28 am // Dick ConoboyThe infamous American Legislative Exchange Council plans to send its spawn to cities and counties throughout the U.S.
1 comments; last on Mar 24, 2014
Tue, Mar 11, 2014, 10:24 am // Riley SweeneyRiley catches State Rep. Vincent Buys for soliciting funds during session
Mon, Mar 10, 2014, 9:51 am // Riley SweeneyRiley digs into an unusual hiring decision at the County Planning Dept
1 comments; last on Mar 10, 2014
Sun, Mar 02, 2014, 2:22 pm // John ServaisThe editor of the Whatcom Watch, Richard Jehn, has resigned effective today. Chalk up a victory for Craig Cole and Pacific International Terminals.
8 comments; last on Mar 05, 2014
Tue, Feb 25, 2014, 8:29 pm // John ServaisThe full text of Craig Cole's threatening letter of libel against the Whatcom Watch. And the emptiness of the threat.
16 comments; last on Mar 20, 2014
Mon, Feb 24, 2014, 3:33 pm // Wendy HarrisWe were led to believe the city would review waterfront wildlife and habitat connectivity. It turns out that the city intends to focus only on nearshore fish.
Sat, Feb 22, 2014, 12:16 am // Wendy HarrisAccepting the Paul deArmond award of citizen journalism on Feb 7, Wendh Harris gave this speech. We think it deserves its own post.
Wed, Feb 19, 2014, 4:48 pm // John ServaisCraig Cole, the local contact for the proposed Cherry Point coal port has threatened the Whatcom Watch with a libel lawsuit.
6 comments; last on Mar 20, 2014
Mon, Feb 17, 2014, 7:26 am // Riley SweeneyRiley digs through court data and discovers the real impact of privatization and legalization
Sun, Feb 09, 2014, 9:35 pm // Wendy HarrisThe mayor wants to amend a city law to increase flexibility for a GMA provision that should be used rarely, if ever at all.
3 comments; last on Feb 11, 2014
Sun, Feb 09, 2014, 2:36 pm // Wendy HarrisCostco imposes indirect costs on our community that are as real and tangible as road construction expenses.
1 comments; last on Feb 13, 2014
Sun, Feb 09, 2014, 9:13 am // John ServaisThe old empty Reid Boiler Works industrial building in Fairhaven burned to the ground Saturday night.
Mon, Feb 03, 2014, 5:30 am // Dick ConoboyProfessional and even college sports have morphed into a circus of corporate greed and the fleecing of the public.
3 comments; last on Mar 01, 2014
Sat, Feb 01, 2014, 12:35 am // Wendy HarrisFiling a public record request could land a citizen in jail under a proposal reflected in a Herald opinion article.
2 comments; last on Feb 03, 2014
Wed, Jan 29, 2014, 6:18 am // Guest writerTim Johnson writes about the first recipient of the Paul deArmond Citizen Journalism award, Whatcom County writer Wendy Harris.
3 comments; last on Feb 08, 2014
Mon, Jan 20, 2014, 5:14 am // Dick ConoboyThe developers of University Ridge have been silent since shortly after the hearing examiner's decision on 23 October last year. Will they walk?
Sun, Jan 19, 2014, 8:39 pm // John ServaisSuper Bowl ... Weed Bowl ... This bud's for you ... Bong Bowl ... Marijuana Bowl ... whatever. It is on!
1 comments; last on Jan 20, 2014
Tue, Jan 14, 2014, 2:19 pm // Guest writerDo we actually need to say that we, as citizens, want accurate information from government officials?
1 comments; last on Jan 14, 2014
Fri, Dec 27, 2013, 4:00 am // Guest writerGuest writer Barbara Perry writes about Bellingham Parks refusal to allow motorized wheel chairs to recharge at public electrical outlets.
6 comments; last on Jan 03, 2014
Fri, Dec 20, 2013, 3:56 pm // Wendy HarrisA Port of Bellingham internal memo tries, but fails, to justify changes in cost estimates for alternative marina sites.
5 comments; last on Dec 22, 2013
Tue, Dec 17, 2013, 12:21 am // Wendy HarrisArmy Corps advised DOE that it will not issue a waterfront permit without Lummi approval
2 comments; last on Jan 13, 2014
Mon, Dec 16, 2013, 12:30 pm // John ServaisFerndale Mayor Gary Jensen has decided not to file for the 42nd state Senate seat currently held by Doug Ericksen.
5 comments; last on Dec 24, 2013
Mon, Dec 09, 2013, 12:24 pm // Guest writerBarbara Perry writes about the closed nature of the Bellingham School Board on the future of the Larrabee School.
1 comments; last on Dec 15, 2013
Sat, Dec 07, 2013, 8:23 pm // Tip JohnsonWherein the direct, indirect, hidden and lost opportunity costs make this a waterfront boondoggle of billions
3 comments; last on Dec 11, 2013
Sat, Dec 07, 2013, 12:33 pm // Wendy HarrisLocal activist calls on Bellingham City Council to table the unpopular waterfront plans and engage in meaningful public process
2 comments; last on Dec 08, 2013
Fri, Dec 06, 2013, 11:03 pm // Wendy HarrisThe county will be required to consider water quality and water quantity when planning rural growth.
3 comments; last on Dec 10, 2013
Thu, Dec 05, 2013, 11:58 am // John ServaisThe Political Junkie has posted a 3 minute video showing Bellingham City Council members explaining their idiocy for all of us to watch.
2 comments; last on Dec 06, 2013
Thu, Dec 05, 2013, 5:00 am // Dick ConoboyThe post "riot" conversation is terribly lacking in several areas. We must expand the discussion or risk learning little from the experience.
3 comments; last on Dec 15, 2013
Wed, Dec 04, 2013, 10:53 am // John ServaisBellingham City Council and Port of Bellingham finalize the waterfront plan. In his weekly Gristle, Tim Johnson blasts the corrupt public process.
4 comments; last on Dec 05, 2013
Sat, Nov 30, 2013, 8:11 pm // Wendy HarrisThe waterfront plan allows a development bonus for payments made to the Lake Whatcom land acquisition fund
1 comments; last on Dec 01, 2013
Fri, Nov 29, 2013, 9:43 pm // Wendy HarrisA number of important issues need to be resolved before waterfront planning is complete, but the city council and port commission are ready to act.
2 comments; last on Nov 30, 2013
Fri, Nov 22, 2013, 9:01 pm // Wendy HarrisIf the port can not construct the airport safely, should it be entrusted with dangerous waterfront cleanup work?
Wed, Nov 20, 2013, 5:03 am // Dick ConoboyThe advice coming from Walmart and McDonald's to its low paid employees becomes more and more bizarre and inane.
Tue, Nov 19, 2013, 5:35 am // Dick ConoboyAmbling's motion to the hearing examiner for reconsideration was definitively rejected. The developer has not met the deadline for an appeal to the Superior Court
Mon, Nov 18, 2013, 2:18 pm // Guest writerIn which we find the hidden core of the waterfront plan is rotten through and through
7 comments; last on Nov 21, 2013
Mon, Nov 18, 2013, 10:59 am // Riley SweeneyThe county takes two big steps forward on the new jail, while still missing the point
Thu, Nov 14, 2013, 1:39 am // Tip JohnsonDear Mr. President, There's a sucker born every minute, and two to take him.
7 comments; last on Nov 21, 2013
Wed, Nov 13, 2013, 3:16 pm // Wendy HarrisThe city adminstration has been providing misleading/ incorrect information to the city council to avoid waterfront plan revisions.
1 comments; last on Nov 18, 2013
Tue, Nov 12, 2013, 10:21 am // Riley SweeneyRiley crunches the numbers on Renata and McAuley's races to find answers
2 comments; last on Nov 13, 2013
Tue, Nov 12, 2013, 5:16 am // Dick ConoboyPuget Neighborhood will likely have in the immediate future 1,300 new rental units that will be marketed primarily to the student population.
Sat, Nov 09, 2013, 9:47 pm // Wendy HarrisThe COB administration continues in its refusal to analyze waterfront wildlife issues, even though this is a prerequisite step in protecting wildlife from the impacts of development
3 comments; last on Nov 10, 2013
Tue, Nov 05, 2013, 8:21 pm // John ServaisWith lots of outside county money flowing in to our local races, this election is weird. But real - and we county residents have spoken.
11 comments; last on Nov 09, 2013
Mon, Nov 04, 2013, 9:55 am // Dick ConoboyThe call of the dollar speaks more loudly to health insurance companies than does the voice and well-being of the consumer, even here in Washington.
8 comments; last on Nov 06, 2013
Thu, Oct 31, 2013, 10:19 am // Dick ConoboyFour bedroom dorm rooms have been nixed by the hearing examiner. University Ridge may be in trouble as a cash cow for Ambling Development of Georgia
3 comments; last on Nov 04, 2013
Mon, Oct 28, 2013, 10:19 pm // Tip JohnsonWherein we discover why we exert our rights - and grab some more petitions before it's too late
3 comments; last on Nov 06, 2013
Mon, Oct 28, 2013, 12:00 am // Dick ConoboyIndependent voters are for independent thinkers on the city council. Vote for Burr and Petree.
Sat, Oct 26, 2013, 7:36 pm // John ServaisBeach reconstruction is done at Boulevard Park on the Bellingham waterfront. Paths along shore are again open - and it looks good.
6 comments; last on Nov 01, 2013
Sun, Oct 20, 2013, 7:07 pm // John ServaisKen Bell has my vote over Mike McAuley for port commissioner. And Renata Kowalczyk has it over Dan Robbins.
8 comments; last on Oct 30, 2013
Tue, Oct 15, 2013, 3:16 pm // Dick ConoboyThe development of University Ridge will replicate the student ghetto that fueled the riot on 12 October.
6 comments; last on Oct 25, 2013
New LinksJulia Ioffe/New Republic
Current InterestCommunity Wise Bellingham
Friends of Whatcom
Lummi Island Quarry
League of Women Voters
Paul Krugman - economics
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 CausesBellingham Police Activity
Chuckanut Community Forest
Citizens of Bellingham
City Club of Bellingham
Community Wise Bellingham
Cordata & Meridian
Facebook Port Reform
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
Two day forecast
Watts Up With That? - climate
Edge of Sports
Famous Internet Skiers
Good LinksAl-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
Talking Points Memo
War and Piece
NwCitizen 1995 - 2007Early Northwest Citizen
Internet At Its BestTED
Quiet, Offline or DeadBellingham Register
N. Sound Conservancy
No Leaky Buckets
Protect Bellingham Parks
The American Telegraph
The Crisis Papers