Part 2 – Brinnon Resort’s unpaid bills to Jefferson County

In the first part of our short series, we explored the issue of the Statesman Group, an international developer out of Canada, and it’s unpaid bills to Jefferson County for work the county did for them on behalf of approving the Pleasant Harbor Resort. The resort, a large Master Planned Resort (MPR), has been the issue of contention since it was unveiled back in the early 2000s. The County gave a green light to develop, with numerous requirements to be met. In exchange, the County, because of the lack of employees due to the financial aftermath of the real estate crash of 2008-09 offered to do a great deal of work to expedite the approvals in exchange for being paid agreed upon sums for the work. It was a reasonable thing to do, given the financial situation the County was in at that time. Though the County did do a great deal of work it was paid for between 2008 and 2016, starting in 2016 Statesman started challenging the invoices. For some reason, this dispute has gone on for 6 years, totaling over $190,000, money the County can ill afford and a situation most of us would never be allowed to do as individuals or small time developers.

Since this dispute started, Statesman has received permission by the Department of Natural Resources to log the property, and according to my sources, they have. This logging activity most likely generated revenue for Statesman.

The County has been involved in negotiations with the Statesman group for many months now, records revealed through Public Records Act requests have shown that County attorney Philip Hunsucker and County officials have been going back and forth for years seeking to receive payments from Statesman. Mr. Hunsucker has stated the following in letters to Stateman’s attorney in May of 2021:

  • “Your client previously paid without question invoices with the same sort of detail in the so-called “block bills” he is now complaining about.”
  • “…when the County tried to get your client to pay invoices in January 2017, he refused”
  • “Some of the work the County did with tribes also was necessary to address your client’s missteps with the Port Gamble S’Klallam Tribe (PGST).”
  • “Significant work was required by the County to ensure that all MOU’s and environmental reports required by Ordinance No. 01-1028-08 were completed, including the Water Quality Management Plan and the Wildlife Management Plan. This issue also coincides with the need to coordinate with tribes. The PGST provided detailed and substantive comments to Water Quality Management Plan and the Wildlife Management Plan that had to be addressed”

Mr. Hunsucker also offered a 5% discount on the bill if they paid immediately.

The question that has been asked by many in the opposition to this MPR, is “What other business in Jefferson County would be allowed to not pay hundreds of thousands of dollars owed to the County for work done over six years and then offered a discount to pay these late bills?”

A logical follow up to this question is, “Why can’t the County issue a stop work order to Statesman until these bills are paid?

This reporter reached out to former County Commissioner John Austin, who was one of the commissioners that approved this MPR in the first place. His comment was, “It’s very distressing to me that they have not followed their agreement with the County.” He went on to state that he would likely have been reluctant to approve this MPR if he knew that this would have been the outcome.

It would be informative to get an official statement from the County as to why they have not issued a stop work order on this development until bills are paid. On Page 62 of the 2017 agreement with Statesman, it states:

(11) Violations and Penalties. The administrator is authorized to enforce the provisions of this article whenever he or she determines that a condition exists in violation of this article or permit issued hereunder. All violations of any provisions of this article, incorporated standard or permit issued. pursuant to this article are made subject to the provisions of Chapter 18.50 JCC, which provides for voluntary correction, notice and orders to correct the violation, stop work and emergency orders, and
assessment of civil penalties
(emphasis added).

https://test.co.jefferson.wa.us/weblinkexternal/ElectronicFile.aspx?dbid=0&docid=1899761&AspxAutoDetectCookieSupport=1

Additional investigations by the Brinnon Group have found the following brochure put out by Statesman. It raises the specter that Statesman does not have the financial resources to complete this project.

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…. 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.

From email provided by The Brinnon Group

Additionally, according to a letter sent earlier this month to the County, raises the issue of whether the County is crossing a legal line by allowing this situation to continue. And at what point is it considered bad debt and written off?

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).

From email provided by The Brinnon Group

The Brinnon group is asking that the County take steps to ensure that Statesman can finance this project. They ask, quite reasonably it would seem to most individuals here, that the County require financial security or a bond for payment to the County, such as an irrevocable line of credit from an established financial institution. The question also might be asked, “Why hasn’t the County already done that?”

How much longer are the taxpayers of this county expected to wait before the bills that are due them are paid? Who else would get this kind of kid glove treatment by county officials?

A great deal more background on this can be found on the website of The Brinnon Group, the citizens who have been opposing this development since the beginning. http://www.brinnongroup.org/

2 Responses

  1. Thank you Al for all the great work on this. Statesman also tried to pull the same scheme in Canada, suggesting that the Canadian government bankroll its resort plans up there. Canadians rejected that. Statesman has never built a resort and it’s obvious they don’t have the money. It should be noted that the Commissioners were presented with this research on Statesman and repeatedly chose to ignore it. Earlier in the process, the county insisted it would require a financial bond to approve the resort. Statesman talked them out of it. Towns across America are a sad testimony to developers with big plans, no money, who leave behind a damaged environment. I would like to have more details on Statesman’s logging operation and its impacts. Piles of logs from that operation are stored next to the Brinnon store.

    • Thanks. To be clear, Statesman *has* built resorts but has not completed some that they claimed. Their web site lists them. They do say for Pleasant Harbor “Today it is poised to become the premier recreation destination of the Northwest” These seem like promises a long way from becoming reality. Poised means completed it seems to them, but as all things advertising, it does mean built in this context. Toscana of Desert Ridge appears to be completed. Pine Ridge in BC does appear to be saleable.

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