Category Archives: Economic Development

A Canary in Bellevue for Bremerton?

A story worth reading, perhaps only because of the ripple it could create over here, is the one in Tuesday’s Seattle Times regarding condo sales in Bellevue.

Bellevue Towers, other new condo projects cutting prices

One of the major reasons the county worked to get the Harborside Condominium loan it backed restructured was because the former agreement made it difficult for the condos to be sold at market rate. The loan gets redone and soon we have a story of four, now five, condos being sold. They are going for less than originally marketed, but they’re being sold. The county never expressed an expectation that it will sell the condos for enough to pay off the entirety of the new loan. But this news out of Bellevue, while not surprising, can’t be good news over here. Those price drops in a neighborhood far more convenient to Seattle could have a ripple effect here.

There is, however, one potential piece of good news in this. From the story:

Some observers have maintained that sales will pick up soon because savvy buyers will recognize supply is limited.

After the current crop, few, if any, additional new condo projects in downtown Seattle or downtown Bellevue are scheduled for completion before 2012.

The Kitsap County loan is due in 2013. In theory there may be a window in there when prices start rising.

No Program Too Good to Scam

The Better Business Bureau has issued a warning to watch out for scammers offering to help you with the “Cash for Clunkers” program, which actually isn’t the “Cash for Clunkers” program. Your first clue is that the program is actually called the Car Allowance Rebate System, which in governmentese has been shortened to “CARS.”

The program is a combination of efforts to get less fuel-efficient cars off the road in exchange for thriftier gas users and another to boost the auto industry. You get $3,500 or $4,500 toward the new car and your car hits the scrap heap.

Should you decide you’re interested, you should know that dealers have to apply to participate, that you will never see the cash in your pocket and that you should not just hand out your personal financial information to someone offering to help you with the program. It’s the dealer that applies and gets the rebate from the government.

You can read the entire BBB release after the jump.

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Port of Bremerton Candidates Answer Questions

The Kitsap Sun editorial board interviewed the three candidates vying for a seat on the Port of Bremerton board of commissioners. Watch a recording of that by clicking on the video below.

We’ll be live broadcasting more interviews with Kitsap candidates before the upcoming primary election and posting them on the Kitsap Caucus blog.

– Angela Dice

Fresh Vegetables in the Age of Growth Management

Maybe there is a simple solution we’re not thinking about, but Vivian Henderson of KAPO fame raised a question last night (Monday) that is worth discussing here, assuming anyone still reads this blog.

KAPO, for the uninitiated, is the Kitsap Alliance of Property Owners. The organization tends to rally for the rights of property owners to do what they want with their properties. They’re often against land-use rules that are designed to soften the impact of development on the environment. The idea of zoning that limits people to smaller places tighter together, allowing more land to remain undeveloped is a “pack ’em and stack ’em” philosophy that doesn’t let people do what they want, if I’ve characterized KAPO’s philosophy correctly.

Anyway, Henderson told Kitsap County commissioners Monday she had a conversation with state Rep. Kathy Haigh, D-Shelton, and the two were talking about how it was a shame people couldn’t grow their own food anymore.

Perhaps this is a personal issue for me, because we have a nice big yard that we do plan to grow food on. Plus, our neighbors made available some pea patches they have in their backyard for us to grow and share vegetables on, at least until we get our yard figured out. We’ve got tomatoes growing off one of our decks in those contraptions that let you grow them upside down. It’s our first year doing this and we’re hopeful, though I wouldn’t say confident.

The concept of growth management is to have people living with smaller yards. Not everyone needs a swimming pool and a pickle ball court on site. And at the same time, if a mass of people decided they wanted to depend less on the grocery store for food, resulting in fewer car trips and benefiting the environment in that way, it would be harder to do under growth management. And yet without growth management, you have the never ending sprawl that is Los Angeles, which is where I grew up.

I’ve probably only scratched the surface here. Dig in.

Two Four Harborside Condos Sold, More to Come

Two Four Harborside Condominium units will be sold following Monday’s Kitsap County commissioners’ meeting.

The sale of the four units could give the county $1.33 million, minus closing costs, to put toward the nearly $40 million in debt the county took on a few weeks ago.

Steve Bauer, county commissioner, said the Kitsap County Consolidated Housing Authority had these sales in the works before the county took over the main debt obligation for the condos. Bank of America, however, wouldn’t have accepted the sales, because they’re being sold before the bank’s former release points.

Josh Brown, county commissioner, said that the offers were reasonable offers in today’s real estate market.

Nancy Buonanno Grennan, county administrator, said more sales are pending.

Washington Looks Good Economically

Every morning I get an e-mail from Al Tompkins, a former TV reporter who now has a blog at the Poynter Institute. Don’t look at my comment as suggesting I’m something special because I get an e-mail from Tompkins. This isn’t like those times entertainment reporters write “I had lunch with Oliver Stone the other day,” when in fact the reporters were ushered into a room six at a time and there were snacks on the table during the 10-minute interview. Anyone who wants these e-mails gets them. Tompkins knows me about as well as I know Arnold Schwarzenegger, probably less. And things such as this.

As I was saying, Tompkins sent an e-mail, which isn’t the point. What’s in the e-mail is the point, a lesson I hope all you aspiring writers learn, to not go off into tangents that have nothing to do with your ultimate point.

So anyway, the e-mail links to a Moody’s story that reportedly says Washington is one of five states most likely to recover quickly from our economic doldrums. So are Idaho and Oregon. I’ll post the Moody’s link, but I couldn’t find the actual story. We’ll just have to take Tompkins’ word for it.

Well, we would have to, except that he links to an MSNBC column that references the Moody piece and suggests the same thing for Washington. The reason?

“States that have a high concentration in tech-related industries are well positioned to take advantage of this trend, which is particularly true of Colorado, Idaho, Oregon and Washington and to a lesser extent Texas,” said economist Andrew Gledhill of Moody’s

Texas’ big plus is the fact that it wasn’t so much a part of the housing boom. That could also benefit Washington to some degree, because this state did see prices go up, but not like Florida and California.

Another reason favoring Washington is its credit rating.

The point is we may be in better shape than other states, which isn’t necessarily setting the bar all that high, but would you rather be living in Florida? I didn’t think so.

From the Archives: 2005 Condo Loan Approvals

Because there has been some call for more details from 2005, here are a couple of stories about the county and city approval of the Harborside loan contract. They were both approved the same week, the county on Monday and the city on Wednesday. I found the Bremerton story in the archives you can access. For whatever reason the county story isn’t on there, so I grabbed it out of the archives we can get to.

Kitsap County

Feb. 14, 2005:

Construction might begin in May on 78 upscale residential condominiums on the downtown Bremerton waterfront. The project got a boost Monday from the Kitsap County commissioners.

The commissioners voted 3-0 to back up $22 million of $42 million in loans the Kitsap County Consolidated Housing Authority will seek to finance the units, known as the Harborside Condominiums.

The condos will be housed in two six-story buildings to go up in the existing parking areas between Second and Fourth streets north of the Kitsap Conference Center.

About half already have been reserved by buyers, including three of the four $1.2 million penthouses, said Housing Authority head Norm McLoughlin.

The units will range downward from that figure to a low of $308,000, he said. All will have views of the water. The authority is developing them as the city of Bremerton’s Community Renewal Agency, said spokeswoman Sarah Lee, and are the third leg of its “$500 million public/private effort to bring new jobs and businesses, tourists and residents downtown,” she said. The first two were the Kitsap Conference Center and the Norm Dicks Government Center.

McLoughlin said the conference center brings visitors, the government center brings employees and now the condos will bring residents downtown, and make it “a 24-hour city.”

The county’s Monday action shows the commissioners have determined “that it will be in the best interests of the county to participate with the authority in financing of the project,”he said.

The county agrees to make loans as and when necessary to support debt service payments on authority bonds in the amount of approximately $22 million.”

The county is not actually providing the financing for the project. Bremerton City Council is expected to vote Wednesday on another $2 million in contingency loan funds for the project.

McLoughlin said the 78 units are just the first phase of the ultimate plan. They are to be followed by 122 additional units in two larger buildings on the same site, he said. The total project cost is $120 million.

“We’re looking forward to getting this back on the tax rolls,” McLoughlin said in thanking the commissioners for their action. Private buyers will pay property taxes on the completed project.

Lee said Portland-based Sienna Architects designed the condos “on the scale of premium high-rise condos in Vancouver, B.C., and Seattle, with wide spans and floor-to-ceiling windows.”


On Feb. 16, 2005, the “Bremerton City Council unanimously approved a $2 million loan contingency agreement to help fund the Harborside Condominiums waterfront development should its financing fall through.”

Read that story here.

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.
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County to Take on Harborside Condo Debt – Updated

Here’s the first draft of a story about what the county’s doing.

Sugg. Hed: County Likely to Take on Condo Debt

Sugg. Sub: Housing authority to return to its core mission.




Kitsap County could take on responsibility for $40.5 million in debt in an effort to ensure the Kitsap County Consolidated Housing Authority survives and returns to its mission of creating affordable housing.

The move essentially spells the end of the housing authority’s role as “community renewal” agency for the city of Bremerton, said Nancy Buonanno Grennan, county administrator.

County commissioners will consider four resolutions Monday evening to take on the debt and to set policy limiting the county’s ability to assume second-guarantor roles on loans taken out by other agencies.

The county would have the final say in property sales at the Harborside Condominium complex along the Bremerton waterfront. Buonanno Grennan confirmed that there have been buyers for condos in the past, but their offers were below what the lender, Bank of America, would accept for individual units.

The county will also take responsibility for the Poplars housing complex in Silverdale, but won’t take ownership of the property until accommodations are made for the 32 senior adults living there, she said.

Taking responsibility of the Harborside sales won’t mean taking ownership of the complex until the county can do its due diligence to make sure it isn’t taking on an undue liability for county taxpayers by becoming the owner.

Buonanno Grennan said condo sales are unlikely to generate enough of the $31.1 million needed to pay off the development. “Everyone gets that the market for condos is radically different than it was in 2006,” she said. “There may be some value in getting some activity, some sales.”

The housing authority is in the process of selling other properties that were purchased with the idea of developing at a profit. Proceeds from those property sales are to go toward paying off the condo debt.

If at the end of four years there isn’t enough money to pay off the loan to Bank of America, the county could consider taking out long-term debt, Buonanno Grennan said.

The 2005 county commissioners; Chris Endresen, Patty Lent and Jan Angel, approved a move to put the county as a guarantor on the housing authority’s loan to build the condominium project.

The complex was designed to help jump start the revitalization of downtown Bremerton. The idea was to have public development spark private building. Public projects include a new conference center and government center. Private investors downtown include the owners of the Hampton Inn hotel, the Kitsap Credit Union headquarters, a new hotel at the former Bremerton city hall site an office building owned by Tim Ryan at Sixth Street and Pacific Avenue and Bellevue developer Ron Sher’s bid to revamp the J.C. Penney parking garage into shopping and housing.

The opening of the condos was delayed a year in large part because the large windows that face the water took longer than projected to be delivered. The complex did not open until the housing market had already begun going soft.

The privately built 400 condominium complex north of the Harborside complex opened shortly before the Harborside complex and didn’t sell as well as projected either. Owners there resorted to an auction.

The housing authority has several projects once slated for development now for sale. That includes property between the Harborside condo complex and the ferry terminal. The Port of Bremerton has expressed some interest in that site, with possible development of commercial space and parking for the marina.

More information will be posted as it becomes available.

The county issued a press release.
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Bozeman Leaving City for Port CEO Job

Check the Sun’s main page for most of the latest information on the resignation of Bremerton Mayor Cary Bozeman. There’s no scandal afoot. The mayor is taking a new job as CEO at the Port of Bremerton.

The story on the main page has information about what will happen in Bremerton and at the port.

I just got off the phone with George Behan, U.S. Rep. Norm Dicks’ chief of staff. He said Dicks was surprised by the news. Behan said he was in an Interior Appropriations Subcommittee hearing with the congressman when he got the message on his Blackberry. He passed the news along to Dicks in between questions of the head of the U.S. Forest Service.

“He was absolutely stunned,” Behan said of Dicks.

One of our wonders was whether this was hiring was done with someone pulling strings from above, but every indication I have is that few people knew this was going to happen and were as surprised as we were to learn about. The port, in the midst of an effort to be more transparent, managed to keep this one under wraps pretty well.

And from what we can tell, state law gives the port every right to do just that when it comes to hiring someone.

Legislators Keep Secrets

In 2007 I was the beneficiary of serendipity, which essentially is the accidental discovery of treasure.

For a story on the scene behind the legislative scenes on the NASCAR debate, I made a public records request for all communications between legislators and other government officials about the proposal. What I did not know at the time was that e-mail communications strictly between legislators is not subject to state public disclosure rules. Legislators are exempted from the law.

The reason I was able to get the documents was because local government officials are not exempted. Since so many of the communications were copied to locals, I could have solicited the documents from several different closer sources. The lawyers working for the Legislature recognized this and recommended making all the documents available, since I could get them elsewhere.

The (Tacoma) News Tribune opines Monday that lawmakers ought to remove the exemption they keep for themselves.

“There’s no legitimate reason for legislators to avoid public scrutiny. Failure to void this exemption would send a clear signal to their constituents: Butt out.”

I guess what I enjoyed wasn’t quite serendipity. I was looking for treasure, just not at the right source. I got it anyway.

I don’t know the reasoning behind the legislators’ exemption from the law, but I can imagine that local government officials could make the same or similar arguments to remove their responsibility to be open. Maybe one of you can explain why a legislator should or should not be different from county and city officials.

Why Major Projects Are Always Over Budget

Read Danny Westneat’s column Sunday on why the deep-bore tunnel project is almost certain to be far more expensive to build than what’s being projected today.

An English professor (English as in he’s from England, not that he teaches English) has done a series of studies as to why major government projects often come in over budget. There are two things at play.

1. Delusional optimism on the part of those who want to see the project done and are the ones crunching the numbers, which leads to

2. Lying.

Pentagon Seeks Alternative Energy

What did we get from the space program? Tang and calculators. At least those are the two most frequent things I hear about.

Not to belittle the real implications of war, but it appears our involvement in Iraq and Aghanistan may be the impetus for a shift to alternative fuels. From Monday’s Washington Post:

“Every time you bring a gallon of fuel forward, you have to send a convoy,” said Alan R. Shaffer, director of defense research and engineering at the Pentagon. “That puts people’s lives at risk.”

Spurred by this grim reality, the Pentagon, which traditionally has not made saving energy much of a priority, has launched initiatives to find alternative fuel sources. The goals include saving money, preserving dwindling natural resources and lessening U.S. dependence on foreign sources.

Work is ongoing to turn trash into fuel, create flexible solar panels, use algae for jet fuel and spraying foam on tents to insulate them, reducing fuel use to heat or cool them. All of that takes trucks off the road, saving lives as well as fuel.

In the arguments about the Kitsap Sustainable Energy and Economic Development project, some have made the case that businesses within the park could be ideally located to partner with the Naval shipyard in developing fuel and other resources that would save energy. At least, now, we know the Pentagon is interested in such solutions.

Did Someone Say NASCAR?

The port and the city of Bremerton had a celebration marking the annexation of SKIA into the city. I didn’t go. Rachel Pritchett was off, so she didn’t go either.

Justine Frederiksen at the Port Orchard Independent went and filed this. Included was a comment from Larry Stokes, port commissioner.

“If I had a comment, it would be, ‘Gentlemen, start you engines,’” he said. “And, hey, let’s get NASCAR back.”

Do we want to start this conversation again?

Just that Fast, WaMu Punishment Axed

Just minutes, quite a few but it wasn’t hours, ago I posted a story from the Seattle Times showing that Washington Mutual employees sticking around until the transition to Chase is complete could be punished for AIG’s bad doings. U.S. Rep. Jay Inslee, D-Bainbridge Island, just sent a press release about his amendment to protect severance packages like the ones Washington Mutual employees would get.

You can read Inslee’s press release and a copy of the amendment after the jump.
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At Last — Positive Economic Developments

Nothing here to increase your stock portfolio or make it likely you can retire sometime before 80, but given how little good news there has been in economic discussions, this has got to be worth something.

Potentially the most significant is that permits for single-family residential units were so high in March that it made the whole quarter almost on par with first quarter last year. January and February numbers were way down, (42 permits submitted compared to 72 a year ago) but March almost made up for it (49 this year, compared to 28 a year ago). Larry Keeton, community development director, said one month does not a trend make. But, he has heard anecdotally that banks are lending again, especially to first-time home buyers.

Second, retail sales taxes were up 13 percent higher in March than budgeted. Instead of hitting $1.24 million as expected, the result will end up being closer to $1.4 million. This, however, appears so far to be a one-time spike caused by construction purchases for the Hood Canal Bridge and the State Highway 16 overpass project.

The county is still planning for a $3 million deficit. County commissioners have asked department heads to come back with plans for a 4 percent cut and a 6 percent cut. The bigger cut could be employed on individual departments if the county’s budget plans don’t call for even cuts across all departments.

What To Do With Poulsbo City Hall…

Wednesday night the Poulsbo City Council will vote on whether to issue the last phase of bonds to help pay for the new city hall. Assuming the vote is in the affirmative and the project continues forward, it might be high time to start thinking about another aspect of this project that has largely been off the radar.

What to do with Poulsbo City Hall? No, I don’t mean the new one. The old one. Also on Wednesday, the council will address that issue. Part of the financing package for the new building includes selling the land where the current city hall resides.

I’ve floated this idea to a few folks and haven’t gotten any crazy looks, so I’ll take that as a sign I’m on the right track. Bear with me:

Almost all of the discussion thus far has been about cost and location of the new building. But I think the back end of this project will have a much greater effect on the average Poulsbo resident or downtown visitor. This isn’t me discounting the importance of the fact that it’s the most expensive municipal building project in the city’s history, but I think people will experience the change more profoundly when something new goes in the current city hall pad.

It’s a large piece of property, right smack dab in the middle of downtown. Combine that with an entire block for sale just a stone’s throw away (Not city owned), and you’ve got major potential to dramatically change the way downtown Poulsbo looks, feels and functions. Condos? New retail? Tall buildings? Hotels? Conference centers? Who knows?

As for the city’s land, it brings up the question of how much it can or wants to direct the sale. Because the city has prime land in the heart of downtown, I can see how some might want to guide the sale toward an element the city feels will benefit downtown. But constricting the uses to what you might desire could, in theory, lead to a lower sale price. What happens if the city sells the land without any caveats, and someone buys and develops something that doesn’t necessarily conform to what politicians and/or locals want to see downtown?

Interesting questions, I think.

What would you like to see happen with the current city hall property on Jensen? Discuss.

– Derek Sheppard

Bremerton Asks Employees for Furloughs

This information is somewhat preliminary, but Mayor Cary Bozeman said the city is going to employees to ask them to accept taking one furlough day a month for the rest of the year. The request is part of the city’s effort to identify how it can save money to meet a projected $3.9 million hole in the 2009 budget.

During the council’s meeting a week ago, Andy Parks, Bremerton’s Financial Services Director Andy Parks, outlined ways the city had found to fill $2.5 million of the gap. That left $1.4 million. Parks said he planned to deliver more ideas at the council’s March 25 meeting. This would appear to be one of them.

The mayor said this will help prevent layoffs, but that layoffs are probably going to happen even if employees agree to this plan. He’s hopeful there won’t be, but is not optimistic.

“We don’t want to keep doing this. We don’t know where the bottom is in terms of the economy,” he said. The city has to look ahead and plan for the possibility that the economy could get worse.

The city is also asking employees to let the city stop contributing to the retirement packages employees have that are separate from their pensions. The city contributes 4 percent of the employee’s salary to the fund, which the employees can match.

I’m still trying to speak with Parks and with a union representative.

Realtors Want Spending Paused on SEED

The Kitsap County Association of Realtors’ Board of Directors is planning to draft a letter asking the Port of Bremerton to at least temporarily cease spending money on the Kitsap Sustainable Energy and Economic Development project.

Mike Eliason, association executive, said the statement will not so much be against the overall project as much as it is a statement about the economy and the number of vacancies in the county.

Eliason said commercial vacancies are above 10 percent and industrial properties seeing vacancies even higher. Adding more industrial property, he said, could harm the overall market.

Kitsap SEED is designed to be a business park for clean technology companies. The first phase is to include an incubator for start-up clean-tech businesses.

Bill Mahan, port commissioner, said the incubator building would not compete with traditional commercial real estate, because it’s “designed for businesses moving from garages to the next stage of development.”