Port Angeles photographer Eric Neurath examines a display case containing works created by a consortium of area artists who operate the Harbor Art Gallery at 110 Railroad Ave., one of several businesses that would be displaced by the construction of a proposed hotel by the Lower Elwha Klallam Tribe. (Keith Thorpe/Peninsula Daily News)

Port Angeles photographer Eric Neurath examines a display case containing works created by a consortium of area artists who operate the Harbor Art Gallery at 110 Railroad Ave., one of several businesses that would be displaced by the construction of a proposed hotel by the Lower Elwha Klallam Tribe. (Keith Thorpe/Peninsula Daily News)

Displaced owners cheer Port Angeles hotel proposal; negotiations to determine selling price, taxes

PORT ANGELES — A $25 million hotel that the Lower Elwha Klallam Tribe wants to build in downtown Port Angeles would displace several businesses — and that’s OK, say owners.

The tribe announced Thursday it is in negotiations with Port Angeles city officials to buy two parcels that include 111 E. Front St. and 110 E. Railroad Ave. to build a four-story waterfront hotel that would employ 50 to 100 people.

Negotiations are expected to be completed in 30 to 60 days, city Community and Economic Development Director Nathan West said Friday.

Permitting could take six months, predicted tribal CEO Michael Peters, saying that construction could start in six to eight months and be completed by mid-2019.

The 86-room hotel — which would include two restaurants and a 64-seat bar — would displace Harbor Art Gallery, Budget Car Rental, Avis Rent a Car, Dungeness Bus Line, the Celestial Espresso coffee stand and Cock-a-Doodle Doughnuts.

Avis branch and Dungeness Line owner Jack Heckman was enthusiastic.

“It would be an asset for our community if they could make it happen,” he said.

He described the tribe’s rendering of the proposed hotel, which was published in Friday’s Peninsula Daily News, as “gorgeous.”

“It would look really cool down here,” Heckman said.

Peters said he hopes to meet with all the tenants affected by the project, including the owners of Cock-a-Doodle Doughnuts, which co-owner Dayna Page leases through Heckman. Page did not return a call for comment Friday.

“We’re not looking at booting anyone out tomorrow,” Peters said.

“It’s a great project,” said commercial photographer Eric Neurath. A member of the city arts council, Neurath was working Friday at the Harbor Art Gallery gallery for free in keeping with the cooperative nature of the 14-member artist group.

“Honestly, I think it’s a good project for our city regardless of my situation,” said the owner of the cooperative, Bob Stokes, “because it will bring a new clientele to this town that might start buying art.

“If we don’t do something on our own somewhere else, there are other locations they could be absorbed into, possibly.”

Stokes said he plans to meet soon with artists who show at the gallery to discuss their options for the future.

Price, taxes

The selling price will be based on fair market value, which will be determined in the negotiations, West said.

The parcels are assessed at a combined $856,014, according to the Clallam County Assessor’s Office.

The sales, property, lodging and other taxes that could be generated by the project are open for discussion, Peters said, adding that since the property is now owned by the city, property taxes are not now collected on the parcels.

The degree to which the tribe pays taxes or the city is compensated for them depends on if the tribe decides to have the property held in trust by the federal government, in which local and state taxes generally would not apply, or in “fee simple” status, in which local taxes could apply, Peters said.

“There may be an intergovernmental agreement that addresses what sort of impacts the operation has on the city and if there is any sort of compensation that might be made in lieu of taxes,” he said.

“We are certainly willing to work with the city on making the city whole as it relates to our impact on the city.”

Neurath was glad the tribe was planning the hotel “and not some developer from another state or city trying to ram down another big project,” he said.

“We are just hoping there is some serious consideration about providing some kind of gallery space,” he added.

Peters said concept drawings for the project do not include gallery space but that the building, which would be comparable in size to the 97,998-square-foot building that anchors the site at 111 E. Front St., has not yet been designed.

The number and size of meeting rooms have not been decided yet, he said, adding that the tribe scaled back on conference area after discussing the issue with organizers of the Port Angeles Waterfront Center, a multimillion-dollar performing arts center planned on the waterfront, which will have meeting space.

Tribal members would have preference for employment, Peters said.

“We have an obligation to provide opportunity, but like any other demographic, not everyone wants to be in the hotel business and restaurant business,” he said.

“We need a good mix of employees to be part of this.”

The tribe’s initial thinking is that the buildings currently on the two parcels will need to be demolished for the project to provide adequate parking, he said.

Parking

Peters said the hotel would include three levels for parking, including one below ground, and that 115 to 150 parking spaces would be provided.

The two floors above ground also would likely have guest rooms with direct parking, while the two remaining floors would not inlcude parking.

The range of parking spaces described by Peters “appears to be consistent with the proposed uses as well as consistent with the [municipal] code,” West said.

No casino

One thing the hotel project would not include is a casino, Peters said.

“It’s a pretty daunting task to go through, and we do not want to hold up economic development ventures at this moment with the idea of a casino,” he said.

Peters said the hotel might include retail storefronts on the East Railroad Avenue side of the project, which faces Port Angeles Harbor.

The city declared the parcels surplus in 2008. In March, they were put on the selling block in two public notices published in the PDN.

The city council decided in a mid-April closed-door executive session to select the tribe’s hotel proposal for negotiating purposes over a second proposal and directed City Manager Dan McKeen to begin negotiations with the tribe, Mayor Patrick Downie and City Councilman Brad Collins said Thursday.

Collins and Downie would not comment on the second proposal but said the tribe’s plan was clearly superior.

The tribe is not pursuing acquisition of the area now occupied by the Cornerhouse Restaurant on the corner of Front and Laurel or the Necessities and Temptations gift shop on Railroad Avenue a block west of the Harbor Art Gallery.

Necessities and Temptations owner Edna Petersen, a former council member, said she is “really excited for the city.”

She saw the same rendering that Heckman did.

“Looking at the picture, I look like the little old lady in Seattle that they built the big buildings around,” Petersen quipped Friday.

________

Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.

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