Gateway businesses question stormwater project costs

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Businesses that own pieces of the Gateway parcel, also known as the old municipal airport site, are concerned about the rising costs of a stormwater pond project that they are being asked to help pay for.

At the Blaine city council meeting on November 12, a public hearing was held concerning the Gateway Regional Storm Facility, a stormwater pond that is currently under construction between Boblett Court and Pipeline Road near the truck route. At the meeting, councilmembers voted 5-0 to form a Local Improvement District (LID), a method by which property owners within a defined geographical area can finance an improvement benefiting their property.

The property owners who own pieces of the Gateway parcel and will be affected by the LID include Yorkston Oil Company, Mercer, Chuckanut Bay Foods and IK Truck Repair. Prior to the vote, representatives of some of these companies expressed concerns about the rising costs of the stormwater pond project.

The total cost of the project is currently estimated to be $3,426,520. To help pay for it, the city of Blaine received a grant from the Whatcom County Economic Development Investment (EDI) Board in the amount of $883,333 and a loan in the amount of $1,766,666. The cost of the improvements not covered by the grant, estimated to be $2,543,187, will be assessed against the property owners, some of whom feel that this amount is too high.

“Boblett Properties objects to the formation of the LID due to the new cost estimates that we are being forced to bear along with the other property owners,” said Heather Wolf, an attorney with the Bellingham law firm Brownlie Wolf and Lee, which represents Yorkston’s Boblett Properties LLC. “We believe there are a number of errors in the city’s methodology for computing the costs for the LID.”

Wolf continued: “We believe the total amount of $2,543,000 is too high. We haven’t received a lot of explanation as to what costs and why they are included in the overall estimate. But per the information presented tonight, it does appear that the city has included some costs that unfairly burden the LID property owners.”

As an example, Wolf pointed to the inclusion of the city’s land costs. “This land was not acquired specifically for this LID and we do not believe this cost should be imposed upon the property owners per state statute,” she said. “It has been consistently conveyed to Boblett that the city was going to contribute the land for the stormwater facility rather than charging the property owners for the same.”

Wolf suggested that the Gateway property owners should only be on the hook for $1,766,000, the amount of the loan that was received from Whatcom County. She said that the city of Blaine could have applied for a larger grant from Whatcom County, but chose not to. “Surely the time for the city to accurately compute its LID costs was when it applied for the EDI grant, and it was at that time that the city had the opportunity to seek a larger grant to cover the costs it now wants to burden the property owners with,” she said.

Jim Gibson, one of the owners of Chuckanut Bay Foods, also spoke at the hearing. Chuckanut Bay Foods built a $6.5 million building on its piece of the Gateway parcel, where the company now employs over 100 people full-time in its bakery.

“While we do agree with the need for stormwater retention, and when we acquired the land we knew that was going to come, we are quite concerned about the costs being allocated to the LID,” said Gibson. “We really don’t know what the final number will look like.”

Gibson agreed with Wolf that the city should not include the cost of the land in its calculations. “We, too, had understood that the pond land would be contributed as the city’s skin in the game,” he said. He also agreed that the city ought to have applied for more grant money from Whatcom County. “We left on the table about a quarter of a million dollars in grant money which now will be borne by the landowners,” he said.

Gibson said that the cost of the project is a significant percentage of what his company paid for its land. “We paid for our land about $3.40” per square foot, he said. “This, as I’m currently understanding the numbers, would be another $2.28. So the cost of the retention pond is another 67 percent on top of what we’ve already paid for the land.”

According to city attorney Jon Sitkin, the owners of the Mercer property have also communicated with the city on the issue.

Ravyn Whitewolf, the city’s public works director, said that the city will work to address the property owners’ concerns. “Once the final costs are determined by completion of construction, our staff will have a study session with the council on what elements you feel are appropriate to include or not include,” she told councilmembers. “That conversation could still take place, and those things can be things like the value of the land and the city’s design and construction management costs.”

Whitewolf continued: “All of these things are definitely things that we would want to hear council input upon. Our recommendation is that we do that prior to the assessment hearing.” The assessment hearing will be a second public hearing that will take place in several months and will determine the exact amount of the assessment against each property owner in the LID.

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