By Paul Gottlieb
Peninsula Daily News
Want more top stories? Sign up here for daily or weekly newsletters with our top news.
Neeser Construction Inc. of Anchorage, Alaska has withdrawn its offer to purchase the 1.96-acre parcel at Front and Oak streets, which is newly for sale for $2 million, listing real estate broker Dan Gase has confirmed.
“It is back on the market,” he said Sunday, adding it was newly classified as active on Friday after having been listed as under contract.
Neeser and city officials said the city could not meet Neeser’s timeline demands for a commitment from the city to lease conference space in the 63,000-67,000-square-foot, two-building project.
Property owner Tod McClaskey of Camas, who also owns Olympic Lodge in Port Angeles, said Neeser had agreed to purchase the property for $1.5 million.
Neeser was paying McClaskey $10,000 a month to hold the property “for them to screw around with it,” McClaskey said, adding he is “very happy” the deal died.
The payment was “the only reason we messed around with them,” he said.
“They just wanted to control the property for as long as they wanted to and we said ‘No, we’re not going to do that.’
“We were getting tired of getting horsed around.”
Neeser was being required to submit a business plan and proof to the city that the square footage was being leased, that revenue was being generated and that the revenue was covering the cost of the facility, city Community Development Director Nathan West said in an earlier interview.
“If the city is going to be able to move forward with the conference center space lease, we need to make sure the project pencils out and that [Neeser] has the necessary engagement of the tenants to make the facility a success,” he said.
“That is certainly a prerequisite for the city of Port Angeles.”
West did not immediately return calls for comment Monday.
Six months ago, Neeser Project Administrator Gary Donnelly had said the company had reached a final agreement with McClaskey to purchase the long dormant parcel.
It was the sixth time since 1993 that a developer has publicly come forward with a proposal for the waterfront property.
This latest plan called for retail establishments, a city-leased conference center and the new home for the Feiro Marine Life Center, now in cramped quarters at City Pier.
Neeser has enough information “to walk in the door today” to apply for a permit to begin digging dirt and putting up a superstructure, Donnelly said Monday.
Construction was to begin in July.
The hang-up was that the city was too slow in committing to a conference center lease, Donnelly said.
“In fact, at the 11th hour, they said that at this time, they would not be able to do that, so we can’t purchase the property on a no-commitment basis,” he said.
“I’m not doing any finger-pointing, I’m just telling you that’s how it is.
“It was taking longer than they had anticipated originally, and that’s just about the gist of it.”
The city’s take was that there was not enough time to meet demands.
“They said they needed to have a lease commitment from the city to purchase the property,” City Manager Dan McKeen said.
“Their drop-dead date was June 16. There was just not enough time to provide information to the City Council to make a responsible decision to move forward with the lease.”
The company had first agreed that a memo of agreement with the city was sufficient to move forward with a purchase, McKeen said.
“That changed to not moving forward to purchase the property until they got a lease commitment.
“The council is the only one who can authorize a lease commitment.
“You have to go through due diligence, questions need to be answered and brought forward, and that would take a lot longer.”
City officials also were seeking an approximately 10,000-square-foot conference-center area, an increase from about 3,800 square feet when Donnelly heralded the project in January, Donnelly said.
McKeen said the lease rate also increased from $2.30 a square foot for the smaller space to $2.60 a square foot for the larger space — not including tenant improvements.
He said that based on the new rate, work needed to be done to ensure that the city would not be “subsidizing” the conference center with its general fund, which is used for day-to-day operations.
The larger space was sought to ensure the city could bring in enough revenue to cover the lease, McKeen added.
User fees and possibly lodging taxes were considered as sources of revenue, McKeen said.
McClaskey, who has placed a restriction on property that prevents “daily or weekly lodging,” purchased the property in 2008 for $1.3 million.
“I’m very happy it didn’t sell,” he said Monday.
“I don’t want to fund a convention facility through my room taxes.”
He said he was disappointed that Neeser was going to develop a convention facility that would not work without an onsite hotel and food-and-beverage services.
“This is just another Vietnam,” McClaskey said. “All you do is waste money.
“The convention facility is not going to help that town.
“What group is gong to come there in the off-season?”
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at email@example.com.