Chuckanut Ridge: Due diligence or negligence?Permalink +
Sun, Oct 02, 2011, 9:29 am // Larry Horowitz
How likely are you to buy real estate in today's market based on an 18-month old appraisal prepared by the seller? Well, if you pay taxes in Bellingham, your mayor and City Council are about to do just that. And, in a BIG way.
In eight days, the city plans to close on an $8 million purchase using funds voluntarily contributed by taxpayers to acquire park land and facilities. The purchase price of $8.23 million is based solely on an outdated appraisal prepared in early 2010 for the seller, Washington Federal.
- The city has not prepared its own current appraisal.
- The city has not involved its own real estate experts.
- The city has not hired a professional appraiser to review the outdated appraisal prepared for WA Fed.
In short, the city has failed to perform due diligence. Is it possible the city is about to significantly overpay for this property?
Let's consider the facts:
1) The property in question, Chuckanut Ridge (aka Fairhaven Highlands,) is currently zoned high density, multi-family for 739 units. It is common knowledge, which has been confirmed by several key city officials, that the current zoning is inappropriate and violates a number of goals and policies of the city's comp plan. Once the city takes possession, the property will be downzoned and the value reduced accordingly.
2) According to the draft environmental impact statement (DEIS,) which is in disastrous shape and will require a massive undertaking and more than $100,000 to complete:
"Environmentally critical areas cover almost the entire site. The flattest areas on the site are either wetlands or would need to be set aside as wetland buffers. Most of the remainder of the site contains erosion-prone soils that have slopes of 15 percent slope or more, steep enough to heighten concerns about erosion potential, and some limited areas are considered landslide-prone."
A real developer's dream!
3) The city has $5 million available and plans to borrow $3.3 million to complete the acquisition. The city's default (and most likely) plan to repay the loan is to sell a portion of the property. Based on the purchase price of $8.23 million, the city would need to sell 40% to repay the loan. If the property is actually worth $6 million, the city will need to sell 55%. At a valuation of $5 million, 65% will need to be sold. Considering the extent of wetlands and steep slopes, it's very possible the city will need to sell every square inch of developable land to raise $3.3 million. The end result: The city will have spent $5 million for undevelopable wetlands, wetland buffers, and steep slopes. Quite the deal!
4) Development of this property must first satisfy the transportation prerequisite: either construct a connector road or widen the bridge to Fairhaven. Construction of the connector road would violate laws that regulate wetlands and steep slopes. Widening of the bridge has been determined to be cost-prohibitive by the previous owner. As it stands now, satisfying the prerequisite is either illegal or does not pencil out. Is the property even developable?
5) Opposition to any development on this property is strong, well-organized, well-financed, and long-lived. The opposition is not going away, regardless of who owns the property. Any developer who doesn't already know this has been living under a rock.
6) For a measly $1,000, the city can hire - even at this late date - a professional appraiser to perform a desk review of the obsolete WA Fed appraisal. I spoke with an appraiser who does this work almost exclusively for banks. He was "very surprised" the city has neither prepared its own appraisal nor professionally evaluated the bank's appraisal. In his experience, properties he appraised one year ago are now being re-appraised at half the value it was just twelve months ago.
I know if I were mayor or a member of Council, I would surely spend $1,000 now to potentially save millions on this acquisition.
Does failing to do so honor the city's fiduciary responsibility when spending funds voluntarily contributed by taxpayers?
Does failing to do so amount to negligence on the part of elected officials?
What would you do?
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.
1 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.
9 comments; last on Jul 23, 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."
3 comments; last on Jun 25, 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.
Fri, Mar 28, 2014, 1:32 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, 10:32 am // Riley SweeneyRiley digs into the county's plan to buy the county morgue
3 comments; last on Mar 24, 2014
Mon, Mar 17, 2014, 12:52 am // 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, 1:11 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, 10:47 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, 8:28 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, 11:24 am // Riley SweeneyRiley catches State Rep. Vincent Buys for soliciting funds during session
Mon, Mar 10, 2014, 10:51 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, 3:22 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, 9:29 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, 4:33 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, 1:16 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, 5:48 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, 8:26 am // Riley SweeneyRiley digs through court data and discovers the real impact of privatization and legalization
Sun, Feb 09, 2014, 10:35 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, 3:36 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, 10:13 am // John ServaisThe old empty Reid Boiler Works industrial building in Fairhaven burned to the ground Saturday night.
Mon, Feb 03, 2014, 6:30 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
Election InfoCandidate Filings
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
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