PORT TOWNSEND — Gary Keister says he finds it ironic that the name of a building destined to provide eight units of affordable housing in Port Townsend happens to be “Carmel.”
“Unless we succeed in turning that into affordable housing, Port Townsend could end up being like Carmel, Calif., where prices are so high that no one working in the community can afford to live there,” said Keister, a founder and board member of Bayside Housing and Services who is serving as the nonprofit’s acting director.
Bayside is set to take over development of what’s known as the Cherry Street affordable housing project, which is to be in the Carmel building that was barged to Port Townsend from Victoria, after the Port Townsend City Council voted 6-1 Monday night to allow City Manager John Mauro to negotiate a transfer of ownership from Homeward Bound Community Land Trust.
That comes with the blessing of Homeward Bound, which was facing an Oct. 1 deadline to make a $23,000 loan payment to the city as well as a greater-than-expected overall project cost, neither of which it could afford.
“We regret that our all-volunteer board and fledgling organization didn’t have the capacity or funding to get the project to completion,” Homeward Bound board member Kate Dean said in a statement, “but [we] are so pleased that Bayside accepted our request to take over.”
In November 2019, Homeward Bound reported to the city council it had spent $509,292 of a 20-year, $834,000 bond the city took out in May 2018 to pay for engineering, design, permitting and other pre-construction costs.
It also reported that completing the project had been estimated to cost an additional $1.3 million for a total of more than $1.8 million.
On Monday, city staff presented the council with four options: allow a transfer to Bayside, develop the project itself, sell the property for the highest possible price and forego its designation as affordable housing, or do nothing.
All but one council member, Monica MickHager, spoke in favor of, and voted for, transferring the project to Bayside.
Calling for an advisory vote, MickHager urged the council to delay action and seek formal input from taxpayers, saying decisions during the past three years had been made “in the dark of night.”
“Do they want eight units that are going to be very expensive?” she asked, acknowledging she would prefer to sell the property. “I would like to see us lower the debt as much as possible.”
Since 2018, the city has been paying off its bond at $65,000 per year and will continue to do so through 2038, said Finance Director Nora Mitchell, except now the city won’t be able to partially offset that cost with $23,000 per year in loan payments from Homeward Bound or Bayside, which will have access to the remaining $307,606 without needing to pay it back.
“If we could have known where we would be now then, I think we would have made different decisions,” Mauro said. “But here we are in this place, trying to find a way forward.”
Over the past nearly three years, since the 1920s-era Carmel building was barged to Port Townsend in May 2017, the city has learned hard lessons about how expensive it is to develop affordable housing, said Deputy Mayor David Faber.
“There’s a lot of hard costs associated with building that were unfortunately not as well understood as they probably ideally should have been when we started out,” he said.
But selling the 1.5-acre, city-surplussed property to mitigate the city’s debt, he said, would mean giving up on addressing the city’s critical need for affordable housing.
“If we turn around and sell this, it’s just going to become a bunch more market-rate housing that’s going to continue exacerbating the problem,” he said. “We have to recognize that affordable housing takes subsidy, it takes skin in the game, and if that means we’re helping to pay for that, that’s something that’s worth doing as a community.”
Bayside began operating in April 26 alongside the Old Alcohol Plant in Port Hadlock, where it uses rooms in the renovated hotel for transitional housing for low-income and homeless families and individuals.
The nonprofit’s board of directors has decided it must broaden its mission, Keister said, because those who are transitioning from rooms at the inn to permanent housing are not able to find that permanent housing in Jefferson County.
“The people we’ve moved on have gone everywhere but Jefferson County because of a lack of housing availability,” he said, noting that Bayside has no interest in developing anything other than below-market-rate housing on the Cherry Street property.
“Hopefully this small project will get others involved in the community to do likewise and find other ways to improve the housing situation.”
Keister called the problem an epidemic that is only being made worse by the economic impacts of the coronavirus pandemic.
“We’re going to get through this pandemic eventually, but we’re going to see so many people evicted,” he said. “In the end, our only goal is to make sure people are housed.”
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Jefferson County senior reporter Nicholas Johnson can be reached by phone at 360-417-3509 or by email at njohnson@peninsuladailynews.com.
