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?

(To post or read comments on this story click on 'COMMENTS' below)

Downtown Conspiracy 101

Take one part over-representation of financial stakeholders in downtown planning, add a series of proposed projects that remove all hindrances to increased height and density, sprinkle in a few “amenities” to woo the public – be sure to leave all public comment in a box on the shelf – and stir it up with a few threats and misrepresentations. Bake in an oven warmed by a rush to beat the 2008 Council. Voila: Winslow Tomorrow Surprise.

If Saturday’s editorial page is all the Winslow Way gang and their good friends at the Review can come up with to dispute allegations of a “downtown conspiracy” (their words, not ours) then perhaps we’re on to something.

The exact ingredients may vary – only the cooks know the secret recipe – but what is clear is that there are many individual pieces of information and series of events that don’t add up, and the spin and blatant “errors” on last week’s editorial page haven’t explained any of them.


The Secret of the Hidden LID

The feigned shock from property owners and the City Administration (not to mention the editor of our fine paper of record) to the suggestion of an LID (Local Improvement District) to help finance the Streetscape would be comical, were it not so serious a matter for the rest of us.

We have been told that (1) an LID would not be appropriate for the Streetscape because we all benefit from it and that (2) an LID would fail because property owners won’t go for it. Winslow Way property owner Bruce Weiland goes so far as to state, in his op ed piece attacking Bob Fortner and the BRG in last Saturday’s Review, that “the City, by law, cannot impose an LID; it must be approved by 60% of the parcels being taxed”. That statement is wrong on so many levels, that one has to wonder why Weiland, a lawyer, would not do his homework before publicly admonishing a fellow citizen’s understanding of the law.

An LID can indeed be imposed by a municipality, though it can be blocked if it’s opposed by property owners representing 60% of the of the dollar amount assessed (not % of parcels). In other words only 41% of the affected financial interests need be in favor of the LID. Thus, in this case, the City could impose an LID and leave it up to the property owners to determine how essential this project really is. Unless of course we want to capitulate to the threat of LID protests in the same manner the City has been seen as capitulating to the threat of lawsuits.

In response to the argument that an LID is not fair because the Streetscape benefits us all, we need only look to Seattle where LID’s have been considered for both the Alaskan Way Tunnel and the Lake Union Streetcar. LID’s are standard operating procedure for financing a broad range of capital improvements that confer a special benefit to adjacent landowners even as they may provide a benefit to the entire community.

So, if LID’s are so ubiquitous, why the claims of impossibility from the City administration and why the disinfomation campaign in the Review? The answer may lie in a plan to reserve that funding mechanism to fund the proposed parking garage.

Streetscape project Manager Chris Wierzbicki told a friend of the PostScript in August, that an LID would not be appropriate for sidewalks and street trees, but would be appropriate for, say, a parking garage. Lo and behold, the funding recommendations for the Haggar-Scribner/ City parking structure, to be presented to Council tonight, include a special assessment for benefited properties. Recall that Tom Haggar, his wife Priscilla Zimmerman and Don Audleman (of Capstone Partners, technical consultant on the $127,000 parking garage feasibility study – yes that’s taxpayer money) are all members of the Streetscape Advisory Committee, and that Dr. Haggar also sits on the committee that created the Streetscape funding strategy.

It will certainly be interesting to see how this apparent hypocrisy is finessed at tonight’s meeting.


The Case of the Missing Fire Flow

Within the Water Resources Element of our Comprehensive Plan is a discussion of “fire flow”, and other water storage requirements, for the downtown water system. According to that discussion, the Winslow Water System will not be able to provide adequate service (including fire flow) for projected growth without replacement of “undersized distribution pipelines in the system”. Specific recommendations are given for Winslow Way upgrades, and Winslow Way Streetscape documents cite those Comp Plan recommendations as the basis for current plans.

Why does “fire flow” matter? Inadequate fire flow means no redevelopment of the affected properties and the word on the street is that what has kept heights down on Winslow Way for so long has been fire safety issues – fire department ladder height, the need to underground power lines and inadequate fire flow. The fire department now has the truck it needs, and in 2009, the Streetscape project will take care of the last two requirements. And so the argument goes that even the basic utility work on Winslow Way will create a special benefit to property owners and should be subject to an LID.

City staff has refuted this claim, stating that the same diameter pipes would be needed for current zoning as would be needed for proposed 5-story building heights. Putting aside proposed upzoning (a potential red herring), is the relevant issue current zoning capacity, or the actual ability to build to that capacity? Is it the City’s responsibility to use our tax dollars to provide a property owner with the additional infrastructure needed to maximize the use of his property? Or are such upgrades valuable improvements to his property?

This is how the Water and Sewer Report, produced by City consultants for the Streetscape project, describe the situation:

“The proposed improvements are the minimum required to meet projected growth along Winslow Way as discussed in the Comprehensive Plan. It is important to note the improvements are not being dictated by future multi-story build-out along Winslow Way but are needed regardless of redevelopment to meet projected domestic and fire demands.”(emphasis added)

Clearly, the infrastructure need is for future development along Winslow Way – whatever sized structures are used to accommodate the projected growth. Thus, we are talking about an improvement that is a prerequisite to redevelopment. It’s incontestable that such an improvement confers a measurable, and, in this case, substantial benefit to Winslow Way property owners.


Something untoward seems to be going on downtown. Has the administration played a role in deceiving Council and the public about the viability of LID financing for the Streetscape project in order to reserve that option for the financing of the Haggar-Scribner parking garage? Has the administration played a role in misleading the community about the relationship between the Streetscape project, the proposed parking garage and the ability of Winslow Way property owners to build taller and bigger buildings, whether under current or proposed zoning?

Without credible answers to such important questions, increasing numbers of reasonable citizens will find themselves wondering whether there might not indeed be a "conspiracy" directing the redevelopment of our downtown.

Committees, Commissions & Boards, Oh My!

Two controversies brewing on the Open Space Commission raise questions about much more than the process by which the City selects and negotiates potential land acquisitions. They are representative of a disturbing trend in Bainbridge Island politics. From Winslow Tomorrow to the 2025 Growth Advisory Committee to the Open Space Commission, the City seems to take a casual approach to preserving an appearance of fairness when it comes to involving potential or even current, financial stakeholders in policy development and planning.


The Inside Scoop

The most troublesome of the recent Open Space incidents involves the relationship between Tim Bailey, a member of the Open Space Commission, and developer Kelly Samson. Bailey, an Island realtor, is Samson’s partner in at least two real estate investment companies, including Bainbridge Community Development LLC, which pulled off a real estate coup earlier this year when it purchased the much sought after Government Way property before anyone even knew it was on the market.

At some point during the time that the Commission was contemplating its most recent, and somewhat controversial, open space recommendation, known as the Williams Property, Samson was notified of the potential purchase and was presumably informed that the Commission was considering working with a developer to make the purchase possible. The subject property was neither on the market, nor did the Commission openly seek participation in the purchase from the community, the Land Trust or any other developers, investors or organizations. Yet somehow, Mr. Samson had knowledge of the proposal, made an offer the property, and the Commission looked no further for a purchaser with whom to partner.

Under the most recently publicized version of the deal, the city would buy a portion of the property in conjunction with Samson’s purchase and agree to numerous restrictions that will benefit the developable lots on Samson’s portion. (That deal, which was turned down by Council in August, is currently being renegotiated.)

While we may never know if it was Bailey who brought the deal to Samson, the fact that there is any question about a potential conflict of interest on such an influential commission is troublesome. We will also never know what other possible scenarios might have been available to the City with the involvement of another developer, the Land Trust or any other potential community partner in the purchase.

In other cities, the business relationship between Mr. Bailey and Mr. Samson might be considered an unacceptable conflict of interest. However, one need only look to the membership rolls of certain key citizen Commissions, Committees and Boards to see that this is simply business as usual on Bainbridge Island.


So Many Familiar Faces

Winslow Tomorrow, heralded by its supporters as a broad-based community effort, is in fact arguably another circumstance where the lines between private and public interests have been blurred. At the project’s inception, the Winslow Tomorrow Community Congress was the focus. While there have been some allegations that portions of the Congress were overly directed or predetermined, in particular the Parking Committee, the Congress appears to have included a reasonably fair cross-section of direct stake holders and other citizens.

Unfortunately, as critics have noted, the process became increasingly exclusive and non-public as it progressed into the "recommendations" phase, where citizen involvement was largely distilled down to staff, consultants and the Feasibility Group. Given the significance of this phase, where specific goals were to be set based upon interpretations of the earlier processes, the composition of the Feasibility Group is worth noting.

While it is not easy to discern the real estate holdings or other relevant financial interests of every participant in the Winslow Tomorrow project, or any other City endeavor, a cursory search reveals that at least three of the eleven members of the feasibility group are major Winslow landowners with plans to develop their properties, and another of the eleven is a land use attorney who has represented at least one of the landowners on the committee. Of the remaining seven, at least six are either planning, development or real estate professionals, work for the City or have another direct financial tie to the Winslow Core.

It’s worth asking whether this group, which appears to have operated largely out of the public eye, is a reasonable mix of community interests. How can City staff and consultants working day in and day out with the same financial stakeholders*, and other interested parties, maintain a reasonable professional distance and properly evaluate their participation in light of the potential, or obvious, conflicts of interest? Should our City staff and consultants, and indeed our elected officials, be put in the position of having to make these evaluations?


Who you gonna call?

All of this leaves one wondering what checks and balances exist for vetting potential conflicts of interest within any of the Citizen Commissions, Committees or Boards. The recently empaneled ethics board will not have jurisdiction over these appointed citizen advisors, so it will have to be by some other mechanism that alleged conflicts of interest or improprieties are investigated and resolved.

This brings us back to the other simmering controversy on the Open Space Commission. The last open space purchase proposed by the Commission and approved by Council, the Meigs Farm property, has come under some scrutiny following the release of a new appraisal suggesting the property may be worth less than 50% of the value paid by the City. The Open Space Commission has appointed two of its own members, Tim Bailey and former mayor Dwight Sutton, to investigate the conflict between the two appraisals. Some in the community have raised concerns regarding a possible fox guarding the hen house scenario. We’ll have to wait and see what the investigation reveals and whether the Mayor or Council will call for an additional independent study. In any case, the broader issue remains, and demands that the community take a much closer look at how the deals are being made and who is pulling the strings.


* Tim Bailey : 2025 Growth Advisory Committee (chair), Open Space Commission, Winslow Tomorrow Feasibility Group
Tom Haggar: Winslow Tomorrow Congress, Winslow Tomorrow Streetscape Committee, Haggar-Scribner/City Garage Study
John Waldo: 2025 Growth Advisory Committee, Winslow Tomorrow Congress – Committee Chair, Winslow Tomorrow Feasibility Group, Winslow Tomorrow Streetscape Committee