Kitsap Business and Economy

By Brynn Grimley
Bgrimley@kitsapsun.com
BREMERTON
The board of the Kitsap County Consolidated Housing Authority wants the agency to move into office space in downtown Bremerton that it owns — and is paying for.
But the financially troubled agency doesn’t want to.
On his second day on the job, Tony Caldwell, KCCHA executive director, told housing authority board members on Tuesday that he did not recommend going forward with a planned move into the authority’s existing office space at the Norm Dicks Government Center.
He listed the negatives: A lack of parking for staff and clients, locating the agency in a city that has its own housing authority and where KCCHA has limited programs, and insufficient space for the agency to grow in the future.
But former KCCHA board chairman Steve Bauer, now a county commissioner, doesn’t think the agency is in a position to be dragging its feet.
“I’m frustrated because I think we’re not out of the woods and we can’t lose our sense of urgency to look at our financials,” he said.
Nine months ago, Bauer asked for the move with the board’s support. The staff was supposed to move in late 2009. That date was postponed until January, then February and now again in March — at the request of Caldwell, who wants time to look for an alternate tenant to fill the space.
In the meantime, KCCHA continues to pay its share of costs for the vacant office space that it formerly occupied in the government center.
“It’s sort of like having a house that’s vacant and paying a mortgage on it while living in another house and paying a mortgage on that,” Bauer said.
KCCHA is part-owner of the government center along with Kitsap County, the city of Bremerton and the Bremerton Housing Authority.
It owns 4,400 square feet of office space on the ground floor as well as the entire fifth floor of the building.
While it has three tenants subleasing the fifth-floor space — including the Port of Bremerton, Bremerton Housing Authority and U.S. Rep. Norm Dicks — its ground-floor offices have remained empty since its relocation to the Bayshore Drive building in Silverdale in October 2008.
After proposing the move last summer, it was determined the government center could house KCCHA and its programs using the existing ground-floor offices and an additional 1,131 square feet of office space on the fifth floor.
That space, while owned by KCCHA, is currently under a long-term lease with the Port of Bremerton. A sublease has been drafted to lease the space back to KCCHA for $1,000 a month plus another $1,000 in building association dues. The agreement is pending KCCHA board approval.
The vacancy for the rest of the space comes at the cost of $19,000 a month in combined debt service to repay the bonds used to build the center and in building association dues. The monthly costs were slightly less when a portion of the ground floor was leased to Henry’s Deli.
But the business moved out after failing to pay rent, said Judy Henry, KCCHA finance director.
Restrictions on the types of businesses allowed in the center have limited the agency’s search of possible tenants. So has the $19,000-a-month rent, which is above fair-market value for the area, Henry said.
Because the government center was built using tax-exempt bonds, the IRS requires a majority of tenants to be public agencies. Only a small percentage can be commercial or private businesses.
The county is in the process of selling the KCCHA building in Silverdale to help repay some of the $40.5 million debt it took on when it bailed the agency out in May 2009. Much of that debt came from the downtown Bremerton condo project.
It would like to see KCCHA relocated before the sale is finalized. County Commissioner Charlotte Garrido told KCCHA board members Tuesday that the county is negotiating a sale of the property.
The cost to move the housing authority from Silverdale to Bremerton is estimated at more than $60,000. The board gave Caldwell one month to find a tenant for the space.
Board chairman Lary Coppola and member Becky Erickson agreed with Caldwell’s assessment and felt it was important to give him the opportunity to find a tenant.
The board is expected to discuss the matter at its April 6 meeting.

This entry was posted on Thursday, March 4th, 2010 at 9:30 am by Rachel Pritchett and is filed under Uncatagorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.