Developer pulls plug on Blaine projects

Published on Wed, Jan 30, 2013 by Brandy Kiger

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The signs have gone up all over the buildings along Peace Portal Drive, and the message is clear: Ken Imus is leaving town.

The developer who methodically transformed Fairhaven and then brought his vision and money to Blaine has reversed course, and  withdrawn his financial influence from the city after an unresolved dispute with city council. “They pulled the rug out from under me,” Imus said. On January 29, he made it clear that he was done with his negotiations with the city as “For Sale” signs appeared on several downtown business fronts and vacant lots in Blaine.

“The city of Blaine reneged on a contract with me,” Imus said. “So I shut everything down thinking that they would come talk to me and that didn’t work. That was three months ago. When January rolled around, and nothing had changed, then I called in the lawyers.”

The contract he referred to was a resolution made by the city council in 2010 establishing a five-year moratorium on sewer general facility fees (GFCs). GFC charges reflect the investment in infrastructure already made by current and prior users of the system; new users are expected to pay their share of that investment. At the time, council felt the moratorium would spur development activity.

According to city manager Gary Tomsic, what Imus refers to as a contract is not an actual contract. 

“It was a resolution that was non-binding,” he said. “I think that was made clear. There was some discussion about that and whether one council could bind another on a city law.” The original resolution gave a time period of five years, but council decided to cancel the moratorium earlier after deciding its purpose had not been fulfilled. 

The fee waiver was part of the agreement Imus said he made with the city when he was considering developing in downtown. “I’ve poured $6 million cash into Blaine,” he said. Among a number of buildings and properties, Imus owns the building that houses the Black Forest steakhouse, which he said will not be part of the sale. “My mom was born out there, so I feel like a native almost, and there are some really nice people out there. But I read in the paper that they went back on our agreement and no one had notified me. I don’t want to work with people who are dishonest.”

Tomsic said that the council did not feel that the fee waiver produced the results they were hoping that it would. 

“The impact of waiving the fees in the first place was intended to spur businesses in the community and council felt that it did not happen,” Tomsic said. “We were losing money on residential development and the anticipated growth in the community just wasn’t happening. So, instead of raising rates on utilities for existing customers, they reinstated the fees.”

The city gave developers six months leeway for projects after the resolution was reversed. “It was a tough decision, but council thought it was the best way to go given the nature of the economy. It wasn’t unanimous, but there was a majority,” Tomsic said. 

Realtor Mike Kent felt that the loss of Imus’ vision for the community could be a hard blow. “He’s done more downtown than anyone else has done in the past decade,” Kent said. 

Kent and fellow Blaine city economic development committee member Ron Freeman addressed council with their concerns at the January 28 meeting. “Ken Imus is one of the region’s most prolific visionaries,” Kent said. “There will never be another Ken Imus. We have to have a political will for responsible growth in the city, and we need the incentives [for developers] to be thought through and developed further so we can make it part of our marketing efforts.” 

Freeman concurred. “This council made a brave, bold move three years ago by saying we welcome you here and by making incentives for developers,” Freeman said. “But the incentives for developing downtown were not as great as the economic downturn. That decision to waive fees, that was a no-brainer at the time. This is an industry that’s going to get shut off if those incentives don’t return.”

Those waived fees over the past few years allowed for 22 homes to be built, Freeman said, and the revenue from the sales and excise taxes on those homes (a combined $320,000) paid for infrastructure expenses throughout the city. 

“That [waiver] did produce results,” Kent said. “And just last week, it was reported that Whatcom County was one of the most prosperous counties in the state. There’s a really stable economy just across the border from us and the residential and commercial market is starting to turn. We can’t get left behind again. We still have the three most important things in real estate that no one can take away: location, location, location.” 

Imus said that while he may be pulling out of his development efforts in Blaine, he’s holding onto a property out in Birch Bay that he hopes to do something with in the future. “I’m attached to it,” he said.