Betsy Peabody Sent - City of Bainbridge Island

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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
Mark Julian, Page 2 sure of is that it will be extremely expensive and we do not have any money. Again, without that number no potential operator can make a proposal that is indicative of anything other than “interest”, feasibility cannot be a consideration without the hard numbers. 3. Unless somethig has changed in recent years, the State DOT will very likely require a 90 day cancellation clause in any lease they write. That was stated to me many times by the DOT Real Estate Services Division, to be required by State law, when I was negotiating with them. I can’t imagine a community, or a private operator making a large investment in the property if that clause has to be included. 4. I believe that current zoning setbacks required may make the functionality of a boatyard unlikely. 5. Neither the City, nor WSF has funds available for a haulout pier, or ramp anywhere in the foreseeable future. 6. If it is not going to be a working boatyard, but a place for small boats, etc. then the City still has to pay a high lease rate for virtually no return from a tenant and has no money for infrastructure. However, if we put a small boat facility at City Dock, we have no additional land costs, and we have the money to do the project. Permitting will also likely be much easier for an expanded City Dock because most of the over water coverage will be out beyond the near shore habitat area as opposed to right on the shore. 6. If there is an operator that really wants to put a boatyard in Eagle Harbor, the opportunity exists on appropriately zoned land, that already has most of the infrastructure in place, on the other side of the harbor. Let the market for that service prevail and let a private operator put in a privately funded yard. The City does not need to be involved. Thanks for your time and dedication to the community. Best regards, Mark Julian Eagle Harbor Boatyard Inc. PS Washington State Ferries Director David Moseley sent a letter to the city Friday clarifying its proposal. Mosely wrote that the fair-market lease to the city would be $25,000 to $30,000 per month based on other WSF leases in Puget Sound. The city would have to get at least that much back from its renter. Read more: http://www.kitsapsun.com/news/2010/sep/27/two-visions-emerge-for-land-near-bainbridge-yard/ #ixzz10n6YzY7l
Page 1 and 2: From: Betsy Peabody Sent: Wed 8/18/
Page 3 and 4: From: Val Tollefson Sent: Thu 8/19/
Page 5 and 6: From: CINDY and GREGG ROBINSON Sent
Page 7 and 8: From: Paul Ziakin Sent: Sat 8/21/20
Page 9 and 10: From: Tom Kane Sent: Fri 8/27/2010
Page 11 and 12: Wini Jones Sent: Sun 9/12/2010 5:35
Page 13 and 14: From: Dennis Fisher Sent: Wed 9/22/
Page 15 and 16: Dennis Fisher, Page 3 Although WSDO
Page 17: From: Scott Sprague Sent: Mon 9/27/
Page 21 and 22: From: tom kane Sent: Thu 9/30/2010
Page 23 and 24: From: John Papajani Sent: Thu 10/7/
Page 25 and 26: From: Peter Shorett Sent: Fri 10/8/
Page 27 and 28: From: Rivers Black Sent: Sat 10/9/2
Page 29 and 30: From: Andy Parker Sent: Mon 10/11/2
Page 31 and 32: From: Jim Llewellyn Sent: Wed 10/13
Page 33 and 34: From: Andy Parker Sent: Wed 10/13/2
Page 35: From: Paul Svornich Sent: Thu 10/14

Betsy Peabody Sent - City of Bainbridge Island

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