Betsy Peabody Sent - City of Bainbridge Island

From: Mark Julian
Sent: Tue 9/28/2010 10:54 AM
To: Bob Scales; Bill Knobloch; Barry Peters; Debbi Lester; Kirsten Hytopoulos; Kim Brackett; Hilary Franz;
Brenda Bauer; Kathy Cook
Subject: WSF property options
Dear City Council Members,
I see that you will be discussing the WSF property on your agenda tonight. I will not be able to attend, but
would like to provide you my comment. Having built and operated Eagle Harbor Boatyard Inc. on the current
WSF property I thought I should offer you my perspective on the options available to the City regarding
settlement of the Memorandum of Agreement that was signed to some degree as compensation for the loss of
my facility.
My feeling is that first and foremost we should be looking at which option is the best opportunity to provide
water access and a financially healthy community for the largest number of residents of Bainbridge Island. I
think that an expanded marina at Waterfront Park, or an expanded marina at Waterfront Park and boat ramp
improvements elsewhere, would be of greater benefit to a larger number of people by keeping Winslow a
vibrant and solvent community and by providing improved public access for kayakers, rowboats, rowing shells,
the disabled and small sailboats. A haulout facility or Boat School, really serves a rather small customer base.
The small boat type of activities I mentioned will not happen on the WSF site if it is developed as a boatyard.
The costs for development will be too great and the only way a boatyard will survive will be to charge the
maximum amount possible for every square foot of space and top dollar for all work performed. It will not be a
place to stroll by the water and launch your small boat. I don’t think that it would be the “community” boatyard
some people are hoping for.
I will point out my major concerns with the WSF property:
1. We have no idea how much the DOT thinks a “market rate” lease is going to cost each month. (I guess we
do now, see link below), We do know they paid over a million dollars an acre for it fifteen years ago, plus
cleanup costs and mitigation. The math can probably be done from there, let’s look at a likely scenario, if I
were the property owner I would expect at least a 7% return on the lease. If the property is worth 1.75 to 2
million dollars, that is $10,200.00 to $11,600.00 per month. Add in another 1.5 million for improvements to
allow haulouts and repair, at a 7% rate to pay for the borrowed money and that’s another $8750.00 per month.
$19,000.00 to $20,350.00 per month is a huge fixed overhead cost in my book, just the lease rate of $10,000.00
per month would be onerous.
Of course, these are just my numbers, not the States, but I would be surprised if they are very far from reality
and they may actually be low. The point is that without these hard numbers, no potential operator can make a
proposal that is indicative of anything other than “interest”, feasibility cannot be a consideration without the
hard numbers.
And I will repeat, with anywhere near these costs, the only activity that will take place on that property is an
activity that produces maximum economic benefit to the operator. If it is developed as a boatyard, it will not be
the “community” boatyard some people are hoping for.
2. Given potential hazardous materials on and off the site, we have only a very rough idea what permitting and
construction of either a ramp or a travelift pier will cost to build on that site. The one thing we can be