The ongoing saga of the development of Black Point, a beautiful promontory covered in tall firs and having unique geographic elements overlooking the Hood Canal, has taken another turn for the worse. It appears that the Statesman Group, the international developer who claimed to have vast resources available to successfully do this project, has not paid the County for work that the county did on behalf of them for the last six years. The county, operating on good faith back then, along with the County Commissioners that backed it, bought their promises without any financial bonding to ensure the work would be completed on time and budget. Hundreds of people in the County publicly questioned this decision and unfortunately, they appear to have been proven correct in their concerns.
The Brinnon Group, the organization of local people challenging the Pleasant Harbor has requested that Jefferson County collect the fees due it by for the work done on the proposal.These fees, in the amount of $191,379.25, are for 2133 hours of work the county did for Statesman between 2016 and 2019. It is unclear if Statesman is in breach of contract with the county, and whether the county could sue for payment and revoke the agreement. It is also unclear of whether the county has been attempting to collect on these fees.The invoice provided to The Brinnon Group attorney, was dated June 6th, 2020.
The letter, sent to Jefferson County Chief Civil Deputy Prosecuting Attorney Philip C. Hunsucker called into question the financial ability of the Statesmen group to complete the project. It stated the following (bold face has been done by me to highlight key issues):
Dear Mr. Hunsucker: As you know, this office represents the Brinnon Group, a local community organization concerned with the proposed master planned resort (MPR) at Black Point. This proposal, termed the Pleasant Harbor development, has been under various stages of review since 2007.
Most recently, a development plan was approved that called for phased construction on the site. However, to date there has been little progress toward completion of the development plan, which advertises a variety of amenities for the community, including a large community center.
Over the past several years, Statesman’s development proposal has consumed significant time of county staff in reviewing and processing this complex proposal. Pursuant to adopted codes and ordinances, well known to Statesman, Jefferson County charges staff time spent on land development proposals back to the developer. This process, adopted by the Jefferson County Commissioners, is to assure that county taxpayers do not subsidize land developers. The requirement of reimbursement applies uniformly to all persons using the services of Jefferson County planning employees.
Over the past several months, my client has directed emails to the County regarding the Pleasant Harbor development and the status of billings and payments by Statesman for work performed by county employees. After expressing financial concerns about this project numerous times, my client was shocked to find that Statesman is in arrears to the County for $191,379.25, accumulated from 2016 to 2019, representing more than 2,000 staff hours spent on the Pleasant Harbor application (see Attachment 1, Jefferson County Invoice 20-001 issued June 9, 2020). Based on current information, we cannot find a record of payment for these fees. Our investigation has been hampered by redactions of emails and other information by your office, which seem wholly inappropriate when inquiries into taxpayer-supported county finances are involved.
It certainly appears that special privileges are being extended to Statesman by Jefferson County. County residents or other developers who owe taxes and fees to the County are expected to promptly pay their obligations and cannot just ask the County to “put it on their tab” for several years. Article 8, Section 7 of the Washington Constitution states: “No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation . . .” (emphasis added). While Jefferson County appropriately grants leeway to county residents in times of need, such as that caused by Covid-19 impacts, Statesman is a large development company with substantial holdings in the United States and Canada and certainly has, or should have resources to pay its bills.
The Statesman’s arrearage to the County raises another serious issue: does Statesman have the resources to implement the complex venture they are proposing? The Pleasant Harbor plan includes multiple phases, most of which will require substantial financial wherewithal to construct. One of the proposed amenities is the large community center, which will be a multi-million dollar project with unclear and uncertain financial returns. A redflag on Statesman finances was raised back in August, 2016, when the company distributed a flyer that proposed public financing of the Pleasant Harbor development. A copy of that brochure is attached. Statesman proposed a $2,000,000 “Recreational Community Grant” from Jefferson County. A transfer of about 30 acres of the Pleasant Harbor site to the state for another Recreational Community Grant in the amount of $9,250,000 was proposed (a cost of over $308,000/acre of undeveloped, vacant land), as well as a $26,500,000 loan from the state. These requests totaled almost $38,000,000 in corporate welfare to Statesman.
During this time in 2016, while Statesman was asking for public money for its project, it was not paying its bills to Jefferson County. These events raise the real concern that Statesman lacks the financial backing to complete the Pleasant Harbor proposal. The Northwest and other parts of the United States are littered with partially completed resort and recreational proposals that have been abandoned. Regrettably, these failures have created substantial costs for local governments.
Based on the foregoing, Jefferson County should take two actions. First, it should insist that Statesman’s past due bills for county services be paid immediately, and with interest. Jefferson County finances are not such that special privileges and deferral of payment can be allowed to land developers, including Statesman. After Statesman has come current on their account, the County should insist that any additional services provided be paid in a timely fashion. If further deferrals of payment are proposed by Statesman, they should be accompanied by complete financial security or a bond for payment to the County, such as an irrevocable line of credit from an established financial institution.
Second, Jefferson County should insist that Statesman demonstrate that it has the financial backing to complete the entire Pleasant Harbor project. These assurances should take the form of third party assurances of financing for the project, again from established banks or other financial institutions, or private committed financing. Jefferson County is not Statesman’s bank. Moreover, it is time for the County to insist, after 15 years of inaction, that Statesman demonstrate it can complete this project and not leave Jefferson County taxpayers holding the bag for a partially completed project that does not meet master plan resort standards.
J. Richard Aramburu
The letter from Mr. Aramburu goes on to state that
Moreover, our investigations have disclosed a residential/recreational development in eastern
British Columbia with many similarities to Pleasant Harbor, this one called Pine Ridge. One of those
similarities is a proposed and promised community center which has been advertised as far back as 2008.
Over the years, Statesman has also proposed public financing for this project. However, neither public nor
private financing has been secured for this community center, and, like the one at Pleasant Harbor, it has
not been constructed. A video from Statesman discussing the project, and community center, is here
https://www.youtube.com/watch?v=hhE0z31AGLw. Discussion of the proposed Community Center
occurs at approximately 2’35”.
The County has been in discussions with the Statesman Group to get these bills paid, but the Groups’ lawyer is pushing back very hard on the County, refusing to pay based on a variety of details. On May 19th the County sent an email to the lawyer for Statesman, very strongly worded about the County’s billing, and demanding immediate payment.
Is the county finally ready to withdraw this approval and force Statesman to go back to the drawing board for this project? Is anyone at the county paying attention to this project at all?
Filed under: Environmental Activism, Jefferson County, Olympic Peninsula, Projects | Tagged: Black Point, Brinnon Group |
Stop the project. And collect the money owed. Learn the lesson and move on.We do not need this project in our county.They are not showing us the consideration needed.Please stop this project. And be firm about it! Also stop any logging immediately!
Rick Aramburu grave me advice 40 years ago about fighting a developer! He still fights on!
Thank you for shining a light on this ongoing issue. Neither the Port Townsend Leader or the Peninsula Daily News would touch this story when I sent them the information our researcher Barbara, at Brinnon Group had uncovered about these unpaid fees. I hope that your article on this will make them do some actual journalism.
One of our JC County Commissioners had offered Statesman Group a sweet half-off offer. I wish they represented us (the taxpayers) as well as they do foreign developers.
I sent this to the JeffCo Commissioners today. Let’s see how they respond.
November 14, 2021
TO Jefferson County Commissioners
• I’m requesting full transparency on any fees owed by Statesman Group, and any arrangement the county is contemplating to satisfy remittance of those fees.
• Is there a policy that allows deferral of fees to developers?
• Are the Commissioners aware of the logging on Statesman property and the retroactive issuance of the DNR permit to log?
• Are the Commissioners aware of any advancement of Statesman’s resort plans?
• Is it possible for the county to demand proof of Statesman’s financial ability to pay its bills and build its resort?
Thank you,
Mark Rose
Brinnon
Isn’t this something JCD should be encouraging the BoCC to insist staff diligently pursue. Jefferson County taxpayers should not have to foot the bill for any private developer. The County could likely use the funds to provide homeless housing rather than helping subsidize condos in the kettles.
Peter The statesman group steamrolled over our county, despite all of our protests, now we see this happening. There is no apparent appetite by our politicians in this county to stand up to these people. I voted for all three of our county commissioners, and while they seem to be good people, they don’t seem to have the backbone needed. I cannot understand why at this late date they have not revoked permission to move forward on this project based on failure to pay, and not following up on the requirements of the approval. It seems the county could play much harder hard ball than it has been doing. this has not just happened this month, this has been an ongoing battle to get paid for multiple years now. More on that to come.
These resort schemes have been going on in south county for decades. Statesman misrepresented another scheme in Canada and was rebuked by the local government. They do the same here in Brinnon. Their misrepresentations of this ghost resort are ludicrous. Meanwhile, they’re logging the land and stacking up timber, probably to raise money. Greg Brotherton ran as practically a spokesperson for Statesman. I get it. It got him elected and nobody really cares about what goes on in the south county. Now that Statesman is ripping off the county for $200K (why did we let them ‘put it on the tab’ in the first place?) maybe we’ll get some attention. I’ll add the 250K that D’Amico extorted from the county and I do wonder how much backbone there is between the 3 commissioners.