PORT TOWNSEND — After many months of legal proceedings, the Port Townsend City Council has dissolved the Fort Worden Public Development Authority.
Many actors worked in good faith to try to find a good outcome, City Manager John Mauro said Monday.
“The clock really ran out on new options,” he said.
“In March, the receiver (Elliot Bay Asset Solutions) filed a motion (with Jefferson County Superior Court) to distribute funds, approve the final report in accounting, discharge the receiver, exonerate the bond and close the case,” Mauro said. “That was really the beginning of the distribution of remaining funds and assets. That was generally completed not too long ago.”
The Public Development Authority (PDA) originally was scheduled for an Oct. 7 dissolution hearing before the city council. The PDA hasn’t had staff since Oct. 8.
“We are here at the dead end of options,” Mauro said. “Dissolution of the PDA is not a desired thing, but without a staff person, with zero assets, with a board that’s really not fully compliant with city code of the total number of members and doesn’t have the resources to proceed, here we are in the situation.”
Council member Monica MickHager recused herself from the hearing, citing her board position on Port Townsend’s KPTZ Radio. KPTZ is located at Fort Worden.
State Parks, the property’s owner, took over management of the park in February.
“This is probably not something anybody wanted, to be in this position, for us to be scrambling and figuring out how to move forward with a treasured community asset,” Mauro said. “What was clear to us once we started talking regularly and trying to solve a very tricky problem was there weren’t very many options because of the financial situation that was dealt. As we uncovered and understood better what reality was of the financial solvency of the PDA, the doors were closed as we tried to march forward.”
Last August, the PDA’s board voted to dissolve, requesting a dissolution hearing in front of city council. A hearing was set for Oct. 7 to meet the city code’s requirement for 60 days notice, Mauro said.
Days before the hearing, Kitsap Bank filed a motion to place the PDA in a receivership, Mauro said.
In October, representatives of Kitsap Bank cited $6.2 million owed to the bank by the PDA.
The PDA met with Kitsap Bank 11 times between August 2023 and July 2024, said Celeste Tell, the PDA’s former interim executive director, in a public comment Monday.
“Kitsap was very aware of the PDA’s financial situation,” she said. “We asked them to partner with us to craft a workable solution. Kitsap instead opted for aggressive legal action and a failed receivership.”
“The whole process with the receivership has run its course,” said council member Libby Urner Wennstrom, who served as a non-voting member on the PDA’s board. “This is sort of the cleanup phase.”
Mauro said the city has done what it can to recoup some money for unpaid water bills. At some point, devoting staff capacity results in diminishing returns, he added.
“All of the creditors are getting pennies on the dollar,” Urner Wennstrom said. “The receiver racked up a $500,000 bill and didn’t really pay any bills. Everything’s a little worse than it was.”
Fort Worden Hospitality, which managed food and lodging at the fort, cited financial uncertainty brought on by the presence of the receivership when it closed operations in January.
Tell shared her high-level perspective on the PDA’s downfall.
“The failure of the PDA was not a carefully hatched conspiracy,” she said. “It was a series of unfortunate events made by many people and many organizations over many years and mostly with the best of intentions. Many seemingly unrelated factors created what I refer to as a hairball that was difficult to understand, even harder to untangle and ultimately impossible to fix.”
Tell led the organization from October 2023 until Oct. 8 last year.
“Who bears the blame for the PDA failure?” Tell asked. “All of us and no one specifically. Everyone involved has contributed to how things unfolded at Fort Worden, including myself.”
Tell said in her year as director, she focused on three things: the strategic plan update, cleaning up the PDA’s accounting mess and operational change management.
Despite good work that happened at the fort, Tell said it eventually became clear that the best path forward could not include the PDA.
“In less than one year, we reframed campus partner relationships from antagonistic to collaborative, got all of the tenants current with utility reimbursements and completed the Pros Strategic Plan,” Tell said. “We worked together differently, we made mistakes, we course corrected, actively rejecting blaming, shaming and name calling, focusing instead on real solutions to our shared challenges.”
The council motion left the city with some responsibilities in winding down the PDA, the quasi-governmental organization originally chartered by the city.
Among them, unless some other agency takes them on, the city is responsible for taking on the PDA’s public records, to steward them in keeping with the Public Records Act, according to a council agenda document.
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Reporter Elijah Sussman can be reached by email at elijah.sussman@sequimgazette.com.
