Port Angeles Downtown Association withdraws from merger discussions — what will happen next?

By PAUL GOTTLIEB and JOHN BREWER
Peninsula Daily News

PORT ANGELES — The Port Angeles Downtown Association board of directors has voted 7-1, with one abstention, to halt participation in efforts to merge the association with two other business groups.

But it was unclear what the board planned to do next.

The association's president, Bob Lumens, announced the board's Monday night vote at a PADA membership meeting Tuesday evening.

But he left it up in the air whether the PADA board might still accept an invitation from PA United to attend a joint meeting July 10 with the full boards of the Port Angeles Regional Chamber of Commerce and the Port Angeles Business Association.

The meeting at the Red Lion Hotel in Port Angeles would be the first time the boards have met together for a discussion about the possible merger of the chamber, PA business association and PADA.

Lumens said it was also unknown whether the PADA board would ask its membership to vote aye or nay on the board's position, or on the merger proposal.

“At this stage we're not sure what the next moves will be, but the board did vote not to participate in anything further [with PA United],” said Lumens after the membership meeting, attended by 30 members of the PADA.

It also was unclear what PA United's other participants would do next.

But at a meeting last week — anticipating that PADA might leave the fold — Port Angeles Regional Chamber of Commerce President Todd Ortloff, general manager of KONP radio, said:

“It's unfortunate, but it is what it is. We've got to move ahead. I still think we can have a very good, united voice [without PADA].”


B&O money

Lumens, owner of Northwest Fudge & Confections on First Street, said a merger would dilute what PADA is now doing for downtown businesses, from maintaining the area's parking lots to creating downtown business promotions to paying for Christmas lights.

He said it could possibly make the downtown ineligible for B&O — business and occupation— tax money PADA is now receiving under the state's Main Street program. Lumens said the money totaled $54,000 last year.

He read a letter from the state Main Street program director warning of the possible cutoff of B&O money and questioning the wisdom of a merger.

“What we have faced every time along the way is, do we keep being involved, do we see a future for us in that,” Lumens said in an earlier interview. “The more we look at it, the more we think there might not be one.”

The downtown association has about 170 members and 13 elected board members, nine of whom attended Monday night's pivotal meeting.

Edna Petersen, owner of the Necessities & Temptations gift shop/department store, cast the lone "no" vote. She and several other board members were in attendance Tuesday evening.

Before changing its mind, the PADA board had voted June 2 to continue participating in PA United discussions.


Haguewood's presentation

Lumens' announcement about the board vote to withdraw came in the last 30 minutes of the two and a half-hour meeting.

It was preceded by a presentation from Jim Haguewood of PA United about how three business groups could be merged. This was followed by discussion among the PADA members in attendance, almost all of them downtown merchants.

Haguewood, former Clallam County Economic Development Council executive director, and other supporters of a merger of the three business groups have been meeting under the banner of PA United for six months with representatives of the chamber, PA business association and PADA.

Haguewood argued at the meeting that one consolidated (and as yet unnamed) business group, with several internal “task forces” devoted to tourism, business development and retention and governmental issues, would be far more effective “with one strong voice that will get things done” than the three “separate and competing groups we have now.”

He added: “This is an opportunity to fix something that has been broken for at least 40 years.”

A merger — PA United supporters have roughed out a tentative budget and five-year strategic plan — would halt duplication, reduce staffing needs and marshal activities and energy into one powerful entity, said Haguewood.

Despite Monday's vote, he said he still hoped the PADA board of directors would join with the other boards and continue merger talks.

PA United supporters had expressed hope that the next step after the July 10 meeting would a merger vote by members of the three organizations.

PA United has posted information about its efforts at its webite, www.portangelesunited.org.


PADA members

All downtown merchants are members of the PADA, paying an special annual tax collected from each business by the city which helps to fund the organization. The tax is expected to bring in about $37,000 this year, according to Lumens.

PADA members who spoke up at Tuesday's meeting mostly had questions about how the consolidation would work, but several voiced their opinions, too.

“A merger could result in broader and deeper resources,” said Scott Nagel, who organizes the Dungeness Seafood Crab and Seafood Festival and other area-wide celebrations from his office downtown.

Evan Brown, co-owner of Browns Outdoor on Front Street and a past PADA board member, believes PA United's goals can be achieved without dismembering the three business groups.

“Destroying PADA and the other groups and all the good they do doesn't make any sense,” said Brown.

The PADA membership meeting was preceded by another meeting three hours earlier by PA United participants at the same location, the meeting room of the Smugglers Landing restaurant on Railroad Avenue.

Tim Smith, the city's former economic development director, a downtown building owner, PADA member and one of those behind PA United, attended both the PA United and the PADA meetings.

He argued that Lumens was wrong about the possibility of losing the thousands in business tax money that now flows as part of the state's Main Street program to PADA — and said that a merger would result in an organization more attentive to the needs of all the city's businesses and give downtown merchants a stronger voice with local government.

The merger would also include a 501(c)(3) entity that could accept tax-deductible donations to benefit business development — something none of the three groups have now, Smith noted.

“And we'll make sure the B&O taxes are not lost,” said William Shore Pool Executive Director Steve Burke, a chamber board member who argued passionately for PA United during Tuesday night's meeting.


Report to the city

Last week the PADA presented city officials with a 15-page letter and dozens of supporting documents as a revised 2014 first-quarter report Friday in the wake of city complaints that the group's first report was insufficient.

City Manager Dan McKeen said the association's report addressed only two of the group's 14 responsibilities detailed in the city's 2010 funding agreement with it. The new report is now under review by city officials.

During budget discussions last fall, City Council members called for more accountability and measurable goals from the three economic development-related groups the city has historically funded, which include PADA.

The other two are the Port Angeles Regional Chamber of Commerce and the Clallam County Economic Development Council.

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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.

Last modified: June 25. 2014 2:10AM
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