Hats for Sale

Winslow Tomorrow has sparked growing distrust in city government. City Council meetings have become increasingly rancorous, and more than 500 islanders have signed a petition calling for a stop to the effort. And yet the Administration keeps bringing forward proposals and new consulting studies to justify them. The question is why does it keep moving forward so doggedly?

You might expect downtown property owners to be one force, and they are, but this alone does not explain the momentum. What may not be as clear is that the City’s own hired consultants have become a force to be reckoned with and that some of the consultants may stand to benefit from financing or developing projects they have helped plan. With some consultants taking on multiple roles as Winslow Tomorrow Facilitators and outspoken advocates of the effort, it becomes hard to know which hat they are wearing on any given day. The recent feasibility study for a parking garage is a case in point.

One Stop Shopping?

Parking is one of the most daunting and complicated issues in real estate, and in most places a city government would start by hiring experts to identify basic needs and the various alternatives for meeting these. Here on Bainbridge Island, however, the Administration went straight to the step of paying for a feasibility study for a garage that would range in size from about 325 spaces up to over 1000 spaces. Last March, the Mayor signed an agreement with Haggar-Scribner Properties, LLC and Sandstrom Properties, LLC (together as SSH, LLC) to study the feasibility of building a parking garage on the city-owned lot adjacent to the combined property holdings of SSH. This $127,500 professional services contract has become known to many as the “Capstone Contract”, as the agreement with the City provided that Capstone Properties, LLC would perform the study on behalf of SSH.

The contract stipulated that Capstone would provide “needs programming”, “rough order of magnitude” cost estimates and a financing and development plan for the garage. This agreement, Winslow Tomorrow’s second largest professional services contract in the last two years, was not put out to competitive bid.

Capstone’s website states that the firm “plans, finances, implements and manages” commercial real estate investment for investors and organizations. Not only does the firm appear to handle everything from site acquisition to development to management for commercial, multifamily residential and medical facilities for others, but judging from its project portfolio, it is also in the business of real estate investment and development for itself.

About a week after signing the Capstone contract, the City also signed a $38,500 contract amendment to an existing contract with National Development Council (National), to oversee Capstone’s work on behalf of the City. National is locally represented by Chuck Depew. This contract also provided that National would evaluate the “function and financing of a quasi-governmental entity” to support the City’s “implementation efforts” of financing and developing the garage, in other words, a private-public partnership. This brought the total cost of these two parking garage feasibility contracts to $166,000.

Over the last four years the City has contracted both with Chuck Depew, individually, and with National, his employer, for almost $120,000 in no-bid professional services for work on Winslow Tomorrow. The National Development Council’s website bills the organization as “one of the oldest national non-profit community and economic development organizations in the U.S.”. And in municipal circles, National is well regarded for its training and financial analysis capabilities.

However, the organization also takes on the roles of financing and developing big public works projects like this garage, for which the fees for “implementation” are much bigger than the fees for consulting. In this way National’s business model is very much like Capstone’s – doing consulting work that sometimes leads to development, where the fees can be much greater.

Public/private partnerships always require squeaky-clean relationships, but these relationships become even more complicated when key players have dual roles as both consultant and financier or developer. Such was the case in Seattle where, in the late 1990s, the City of Seattle hired National to help it arrange financing for the $73 million public garage being built through a public/private partnership with a developer. According to the Seattle Times, the city’s Ethics and Elections Commission issued a report finding that National had violated a $70,000 consulting contract that barred it from having any financial interest in the project, by making an arrangement with the garage developer that would pay National $500,000.

Chuck Depew was Deputy Director of the Seattle Office of Economic Development and oversaw National’s work. According to the Times, he described the ethics commission’s report as “over dramatized”. Depew left the City to join National the following year.

National also developed an office building for King County. A Seattle Weekly article titled King Street, Easy Street carried the sub-heading “Developer John Finke cleans up with another ‘public private partnership’”, referring to the head of National’s local office. This article describes Finke as a “consultant-cum-developer” and his work with the County as “another sweet deal”.

The parking garage feasibility report here on Bainbridge states that the cost figures assume “privately commissioned project delivery” of the garage. This is developer-speak for someone other than the City designing, building and financing the garage. And this would be no small project, for the possibilities under consideration range from 325 to about 1000 spaces and would cost tens of millions of dollars. The financing and development fees could range from $700,000

There is also interesting language in the Capstone contract about joint cost sharing on future work phases to include preliminary design, plan review and a “final decision process” for construction of the garage. Considering this language and the business models of both Capstone and National Development, both of these firms seem to be ideally positioned to be key players in future downtown development – potentially even in the development of the parking garage.

The Capstone and National contracts raise two key questions: 1) what care and due diligence has the City Administration taken in hiring consultants who may have a conflict of interest and 2) what roles has the City given these consultants in shaping and directing the overall Winslow Tomorrow program?

Now You See 'Em, Now You See 'Em Again

Winslow Tomorrow has a long history of a few people playing multiple roles. Don Audleman (Capstone), Chuck Depew and Tom Haggar (Haggar-Scribner Properties) have all been ardent supporters of and participants in Winslow Tomorrow. Depew was heavily involved in preparing the financial pro formas used by the Administration to argue for bigger buildings, and was a member of the Winslow Tomorrow Feasibility Committee that voted to send these studies along for public use. This committee was chaired by then City Council candidate Kjell Stoknes, who is now a sitting City Council member. Other participants in that committee included former Winslow Tomorrow project manager Sandy Fischer, John Waldo, former Bainbridge Island Downtown Association president Will Langemack, retired health care consultant Howard Kirz, Winslow developer Bror Elmquist, and others.

Some members of the Feasibility group had also served as facilitators for the Winslow Tomorrow citizen congress, including Depew, Stoknes, Waldo, and Kirz. At least one, Depew, was apparently paid for that work. The City also subsequently contracted for professional services with at least two other citizen group facilitators, including Julie Shyrock and Michael Read.

Don Audleman of Capstone has served as a member of the Winslow Way Streetscape Advisory committee along with Tom Haggar, co-owner of the property occupied by the Virginia Mason Clinic, and his wife. Haggar has been actively involved in lobbying the planning commission to approve proposed increased building heights and density in the Winslow Core and both he and his wife also served as citizen participants in the Winslow Tomorrow congress.

So, when someone gets up to speak in favor of Winslow Tomorrow, or to lead a “public outreach” effort, do we know whether they are they speaking as citizens, as Winslow commercial property owners, as paid facilitators, as financing consultants, as financiers or as developers? Or, are they performing multiple roles at the same time?

It is clearly the City administration’s responsibility to keep participants’ roles and responsibilities clear, to protect against conflicts of interest in the way it runs planning efforts and to disclose potential or actual conflicts of interest once they are discovered. In fact, the American Planning Association states quite clearly, in its ethical principles that planning process participants should “make public disclosure of all ‘personal interests’ they may have regarding any decision to be made in the planning process in which they may serve, or are requested to serve, as advisor or decision maker".

The Way Forward

There are at least three qualities that most City governments seek to embody in their planning and public works projects. The first is an open and transparent process, so that citizens know if the person at the microphone is simply an interested citizen, is a paid consultant supporting an Administration policy or is a developer, land owner or potential future developer who will benefit from a particular outcome. Secondly, the work should produce real and alternative options. A good process starts with a good analysis of needs, and then presents the various solutions in a balanced way. Thirdly, there should be solid support in the community for any proposal that is likely to change the nature of the place. In cities with a council/ manager form of government, the manager usually wants to pass controversial measures with a majority of two, if not three passing votes – if only because he or she does not want to be one vote away from being fired should the politics reverse themselves.

Bainbridge has a “strong mayor” form of government which makes the Mayor the elected chief executive responsible for hiring the right people and ultimately responsible for running a fair and open process. Her signature is on most of the contracts, and the buck stops with her on management issues and the performance of her administration.

So far the costs of Winslow Tomorrow are more than $4 million and the revolving door of consultants, financial stakeholders and other planning participants spins on. The Winslow Way Streetscape project and other downtown redevelopment efforts have taken on the force of a steamroller, with the Mayor firmly at the wheel. Together they are rolling towards projects with costs five and ten times what she has already spent. Are the same people who developed the map for these ventures also along for the full ride? And without a more open and transparent process, how will we ever be able to trust that planning decisions and recommendations reflect the interests of the community and not those of a small group of people wearing many hats?

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