Councilapproves fee deferral amendment 3-1

Published on Thu, Jul 26, 2007 by ara Nelson

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Council approves fee deferral amendment 3-1

By Tara Nelson

Blaine residents may soon see the construction of Harborside Place, a long-awaited project considered by some as the anchor of new development downtown.

In their regular meeting Monday, Blaine City Council voted 3-1 to approve two amendments to the Blaine municipal code that would allow developers to defer fees for utility, water and sewer connections to commercial and residential developments for up to two years or until the projects are completed.

The proposals come after a request from Harborside developers Art Weiner and Rick Osburn to defer approximately $90,000 in building permit and utility fees for the Harborside Place building project planned for H Street and Peace Portal Drive.

The development – a 19,000-square foot mixed-use residential and commercial project – was originally proposed by Osburn in 2005, but was delayed after a rise in construction costs, and eventually sold unfinished to Weiner, of Napa, California.

Tomsic said the deferral was requested to assist in making the project more economically practical in the short-term and, although potentially risky, could help encourage other development in that area.
Councilmember Jason Overstreet abstained from voting citing his businesses in Blaine central business district.

Blaine planning commission chair Jeff Arntzen, who attended the meeting, said he was originally concerned that a requirement to show a development could create more jobs or increase city tax revenue would inherently favor large developers that could lead to the city giving more preferential treatment to larger developments that could “buy up” options and push out smaller businesses. Another issue, he said, was the geographical restraints of limiting the deferral option to development proposals to the central business district.

“We can expect a lot of development in the wharf section,” he said. “If those two areas are as connected as we’re hearing, why aren’t they both included in the area?”

Planning commission member David Gallian said he was concerned about sending the wrong message to developers.

“The perception is that if we have this over a wide area and open it up for everyone, developers may actually see this as an act of desperation,” he said. “We may actually lose development because they may think something is wrong, whereas limiting the area makes it more of an experimental move.”

Several business owners and developers said they were in favor of the deferral option.

“I’m not a big developer,” said Brad Smith, a Blaine business owner. “I don’t have the working capital and so this deferral process would make a lot of sense for me.”

Bellingham developer Joel Douglas, who built the Seaside condominiums last year, agreed. “If you want developers, you have to act like you want it,” he said, adding that his current dispute with the city has left him without an occupancy permit while being required to pay utility bills for his units.

“If you want to have a city, you’ll have to treat people like they deserve to be treated.”

Art Wiener, the investor who took over the Harborside project last year, flew from Napa, California to attend the meeting. He said the current market has become difficult with high construction costs and a nervousness created by sub-prime mortgage lenders and that the construction of the project could spur development downtown.

“A lot of developers have contacted me and they’re all waiting for me to contact them so this is really a catalyst project,” he said. “The total start-up costs are approximately $180,000 so that’s another reason we need all the incentive we can to get this project off the ground. In the long-run, I think it will help get the other projects off the ground.”
Blaine resident Richard Blackburn said he liked the idea but was concerned that a backlog of development could restrict cash flow to the city.

“I’m 100 percent for the Harborside Place being built,” he said. “The boardwalk needs an anchor. But I’m trusting you and the staff to come up with a business plan so us taxpayers aren’t stuck with the cost of building permits.”

Tomsic agreed, adding that the city had experimented with a similar proposal several years ago for home owners.

“It didn’t work out very well,” he said. “We had to put liens on all their homes.”

Councilmember John Liebert, however, said he was excited at the possibility of getting development going downtown.

“Talk about going from the outhouse to the penthouse,” he said.