More on the Condo Loan

This was perhaps a blog entry that would have been better offered last night or this morning, but given the interest in the housing authority condo loan, I suppose this will remain interesting.

First off, we have a story for Wednesday’s print showing that the city of Bremerton may be on the hook for $2 million in the condo loan.

The logic is this: When the county backed $22.2 million in bonds for the condo project, the city also put $2 million on the line if the county had to pay up.

With the new loan, the county is paying up. Therefore, the logic goes, the city owes.

The city, for now, doesn’t agree.

Last night’s meeting carried lots of comment from residents. Most appeared to believe that the county would be in a bind, that it was going to owe $26 million now if it didn’t do something like it was doing. I’ll include some of the comments that weren’t in the story.

Vivian Henderson, speaking for herself, said Kitsap residents who warned the county against backing the loan “watched with dismay” as the housing authority got away from its core mission. She also asked what this means to her as a taxpayer and asked if the city was going to pony up anything.

James Sommerhauser suggested a language change in the policy that limits the county’s ability to back loans like this.

Jack Hamilton said, “Be advised that ‘not on my watch’ is not an excuse that goes down well in this military community.”

The quote from Hamilton I wish I had included was “What that really means is when the buck stops here, ‘here’ is the taxpayers’ wallet.”

Bainbridge Island Mayor and Vice Chairwoman of the housing authority board Darlene Kordonowy said the last eight months have been tumultuous, that the housing authority board did not want to put the taxpayers in this position.

She then discussed programs the housing authority does that she said remain critical, such as lead abatement and property rehab.

Kordonowy said the authority has enough operating funds for the next two years.

Charlotte Garrido, county commissioner, said she’s been there when the housing authority has been regarded as one of the finest in the nation and reassured everyone that the authority was going back to its core mission.

Garrido said the loan agreement does three things: It buys the county time to sell condos and other assets when the market is more favorable, it gives the county the value of the assets and will give the county final say on condo sales. “I didn’t ever contemplate having to sit here doing this, but this is the best possible resolution,” she said.

Steve Bauer, county commissioner, said the county didn’t have any good choices. “I think we really faced the Hobson’s Choice here,” he said. Debts were due in February and April, the housing authority didn’t have the money, if the county didn’t pay it off, it would have had another bill of $26 million with no properties to back it up. “What we’ve really done is made a loan to the housing authority,” he said.

Bauer said it wasn’t this board that created the dilemma, it wasn’t really optional because it was legal commitment the county made and that the alternatives were worse. “This board has already devoted a huge amount of time and energy to protect county residents and will continue to do so,” he said.

Josh Brown, county commissioner, said the former board knew the risks, that the county has been on the hook since 2005. He said without the new agreement the housing authority would be in bankruptcy and the county would owe $26 million in August. “I think what we had to do was give ourselves time to sell the units,” he said. “The deal was put together when the market was hot. Bank of America wouldn’t let us sell units at what the market is today.”

Port Orchard resident Jackie Rossworn said the commissioners had no choice but to do what they did, but warned of more loose cannons in Kitsap. She named Dick Hayes at Kitsap Transit and the Port of Bremerton.

Vivian Henderson came back and talked of how well the housing authority used to do with a self-help farm program, which she said was essentially killed by the Growth Management Act. She also expressed disappointment that the meeting wasn’t televised.

Nancy Buonanno Grennan said that was a hiccup in communication between the administration and staff.

Ron Ross said he thinks Bremerton should remove the “blighted” designation from downtown. He also said county officials could rescind the new policy limiting the county’s ability to enter such agreements.

Josh Brown agreed with Ross, but said new commissioners would at least have to do the work of rescinding it, which would have to be a public action.

Barbara Stephenson, county treasurer, spoke of the need to have “other eyes” on housing authority activities when it comes to the county.

Patty Lent took responsibility for the current situation, saying she thought the county was well protected at the time. “As you’ve shown tonight not everything that’s done is done wisely,” she said.

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