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HomeMy WebLinkAboutMinutes 02/27/1996 3230 CITY COUNCIL SPECIAL MEETING Port Angeles, Washington February 27, 1996 CALL TO ORDER - Mayor Ostrowski called the special meeting of the Port Angeles City Council to SPECIAL MEETING: order at 4:00 p.m. ROLL CALL: Members Present: Mayor Ostrowski, Councilmembers Braun, Campbell, Doyle, Hulett, McKeown, and Wiggins. Members Absent: None. Staff Present: Manager Pomeranz, Attorney Knutson, Clerk Upton, and T. Smith. Port Commissioners Commissioners Foster, Beckman, and Waud. Present: Port Staff Present: Director Anderson, C. Boddy, D. Hagiwara, B. James, K. Kolb, and K. Sweeney. Public Present: D. Duncan, E. Tuttle, C. Alexander, J. Ralston, C. Whidden, M. Gentry, and P. Downie. Development of Oak Mayor OstroWski made the observation that, during his tenure on the City Council, Street Property such a joint meeting with the Port had not been held. He was pleased that the City Council and the Port had the opportunity to meet on this important issue; it is hoped that a joint agreement can be reached. Commissioner Beckman briefly reviewed how the Port's negotiations with the Shilo Inn for a hotel/convention center broke off approximately six months ago. The Port, therefore, concluded there was more work to be done before negotiations could again commence. He summarized the issues that have affected the lack of a desirable outcome: rent negotiations for harbor area from DNR, status of the Valley Creek Estuary project, and the economic viability of a convention center. Commissioner Beckman noted a convention center is considered to be a financial liability for the operation of a hotel. It has become clear that the Port would be unable to put a convention center together with only Port resources involved. He advised the group that Commissioner Foster had suggested this joint meeting. Port Director Anderson addressed the group by reviewing the details pertinent to the Valley Creek Estuary project; the Port is most interested in seeing that particular project go forward. At an approximate cost of $1 million, the resources needed exceed those available. Completion of the project would result in a buffer between a hotel/convention center facility and the industrial area of the waterfront. Dave Hagiwara displayed a map and photographs showing the specific area under discussion. He noted the current K-Ply pond which would be filled and the location of the Valley Creek Estuary. Director Anderson indicated that, at the time of the negotiations with Shilo, K-Ply had indicated a willingness to work cooperatively on the project with monetary support. Director Anderson summarized the negotiations that have taken place thus far with DNR pertinent to the use of the state owned aquatic land. There has been a difference in opinion concerning the appropriate calculation to be used in determining rent to be paid to the DNR. Another issue to be considered is that of the economic viability of a convention center; Shilo did not feel a convention center would be a positive revenue source. Commissioner Foster expressed the hope that the two entities could seek a partnership in this endeavor. It is a high priority project and the likelihood of its success would depend on the cooperative efforts of all those in the community who would be benefitted. Further, Commissioner Foster felt the Port should not accept all of the associated risks of this project. Discussion followed concerning the reasons Shilo withdrew from the negotiation process, and Commissioner Foster noted it became apparent that a mechanism needed to be put in place whereby there would be long-term risk sharing. Also, the need -1- 3231 CITY COUNCIL MEETING February 27, 1996 Development of Oak for a convention center was more of a critical need to the community, but not to Street Property Shilo. It may be necessary for the community to build the convention Center in the (Cont'd) immediate vicinity of the hotel. Commissioner Foster expressed a preference of having a private investor work in partnership with the community on a convention center. Councilman Campbell inquired as to whether the pond filling could be separated from the estuary project. State law has certain finite regulations setting forth the mitigation requirements, and it would be necessary to replace the industrial area. The wetland area would have to be replaced as well. Grant opportunities are being investigated. The matter of timing was considered, and Director Anderson indicated the pond fill and the estuary project would have to be completed in a period of 18 months. Lengthy discussion ensued concerning the means by which risk-sharing could be accomplished. Director Anderson expressed the hope that the Port's administrative costs on this project could be recovered in a period of 20 years. Also, the potential exists that a hotel could, in the future, become vacant. The ability to assign a lease to another operator of equal quality could become an issue. Director Anderson emphasized the need for the Port to be able to assure the taxpayers there would be a good return on investment. After lengthy discussion' of the issues, Manager Pomeranz noted that one of the City's goals has been economic development. A hotel/convention center is one of the important aspects of meeting that goal, and the City is most pleased to be invited to become a party to this very important project. Manager Pomeranz indicated the City is most willing to share in the responsibility, and it is critical to the City's future. He felt this is everyone's problem, and the City wishes to be a part of the resolution. Members of the City Council echoed the City Manager's sentiments, after which Manager Pomeranz suggested that a committee of Commissioners, Council members, and staff be formulated to begin the process. He urged that an agreement between the two parties be reached as quickly as possible, as there is a need to ~jump start~ the process. Further, Manager Pomeranz felt it would be prudent to visit Shilo to perhaps further develop and rekindle the relationship that was begun by the Port. Discussion as to composition of the committee was held, and it was agreed that Director Anderson and Manager Pomeranz would discuss this further. Also, the matter will be placed on the upcoming Council agenda for consideration. ADJOURNMENT: The meeting was adjourned at 5:00 ~ ~ -2-