HomeMy WebLinkAboutTranscript 12/17/2002 (2) Transcript of comments made by Jace Schmitz, Coldwell Banker Realty, at City Council meeting
of December 17, 2002:
Schmitz: My name is Jace Schmitz. I live at 234 Horizon Hills Road in Sequim, and one of the
City Council members asked me—I was having a conversation with him a couple of weeks ago,
and I was kind of moaning about some of my deals that were going south, and it happened to
include some City properties. I guess that, right now, I don't guess, I know that there is a lot of
stuff going in the City about growth and what they can do and what have you. So, he asked me if
I would come and say a few words about what's going on and what's not going on—on some
future developments in the City. So, if it's OK, I'd like to do that.
Wiggins: Sure, fine, how long will it be?
Schmitz: Five minutes —shouldn't take long at all.
Wiggins: Go right ahead. [At this time, Mr. Schmitz distributed supportive information to the
Council and staff.]
Schmitz: Maybe ten minutes! What I want to do real briefly—I have five properties here that I
want to talk about, and these are five deals that I had going that are not going any more. And
they're not going because of cost of development—what it would cost to develop in the City.
And so I just want to briefly go over this, and if it opens up discussion at further meetings or if
people want to call me, it's great. But, like I say, I was asked to come here because of this, and I
think it's worth at least making everyone that is here aware of this.
The first piece, and I just made copies of the properties to give you some idea where they are, but
the first piece that you have in yellow is a 34-acre parcel that I had an investor—he's a very
knowledgeable, in fact he just sold a couple of mobile home parks for a few million dollars, the
guy has money—and he on his own had learned about Port Angeles, thought it was a good place
to come and develop and what have you. So, I had this parcel and the next parcel, the second
parcel that you've got there, I had offers in on both of them. He was going to move here,
develop these, and when he got involved in the deals and found out what was involved and what
he couldn't do and the costs and what have you, he's gone now. And he's actually going to find
another community where he can invest his money and develop and what have you. So I think it's
real pertinent. A couple of things, and I just want to go over these briefly, cause right now this is
more food for thought—it's just information for people to consider.
On the first parcel, the 34 acres, it is right next to IBC Church. It's a 34-acre parcel. It's actually
in the County, but he was going to annex it into the City which he was told wouldn't be a major
problem, and then go for a rezone—City zoning, and he only wanted to develop it into quarter-
acre lots. And he would have ended up with about 80 —he wanted 100 —but he probably would
have ended up with about 80 quarter-acre lots. We have a need for that in the City right now.
The cost to develop lots right now is —I just talked to Steve Zenovic earlier to be sure of my
figures —and Steve said you have to figure $15,000-$17,000 a lot in development costs. On top
of that, this particular parcel he was told—he, being the developer—was told that he would
probably have to extend - widen - extend a portion of Laurel. It was going to cost around
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$125,000, plus or minus. Steve, you know, made that up based on whatever knowledge he has.
The bottom line is the cost to develop this parcel, the cost that the City has right now, priced it
out of being feasible as an investment, a development. It shouldn't be that way. He was going to
try and sell these parcels for around $35,000, maybe $40,000, but I didn't think that $35,000 was
realistic. Well the cost to develop that lot—it's going to cost him about $22,000 per lot by the
time he was done. So there is no profit in there, and I'll tie this together later. I want to go the
second parcel, because it will give you a great idea of what is going on.
The second parcel he was going to buy what this piece on Milwaukee Drive, and it's right across
the street from a lot of the beautiful homes that are on Milwaukee that are the, you know, high
bank waterfront. He was told—this is just a four-acre parcel—again, he was going to do quarter-
acre lots here. The City's requirements for someone to develop that—the developer would have
to improve both Milwaukee and 10�' Street, which takes it way above that $17,000 per lot figure.
And he wasn't willing to do that, but he thought maybe with time and working with—because
people at the City said maybe they could do something—so he thought maybe he could just build
a home there and live there a few years until the time was right and what have you. For him to
build a home here—it's considered a development. And he would still have to —under the rules
right now in the City—he would still have to improve Milwaukee and he would still have to
improve 10�', which it will be aeons before that would ever turn out to be economically feasible.
The first development was about eighteen lots —this thing would have been about thirteen or
fourteen lots. Again, this is something we need. This would have been nice quarter-acre parcels
right across from Milwaukee Drive, mountain views, nice development. He can't even build a
house there because of the City rules right now. So, that deal was gone.
The third page is a piece of property on "N" Street, and it's zoned RS-9, and that's what it should
be developed for. The City, again, you'll see when you look at it, besides fronting on "N" Street,
it also fronts on 14'' and then 16''isn't there. But the City wants 16''to be improved when this
particular parcel is improved. Whatever the reason for the rules, it seems like overkill and having
to improve the two roads plus do all the internal stuff makes this so expensive and ridiculous that
I don't think it will be developed in any of our lifetimes. And it doesn't have to be that way.
With what's going on in Port Angeles right now, with the jobs that we know are coming from the
two companies that are coming here, but also from the people that are interested in coming, what
I see happening—and this is the third market of this type that I've been through—all of this
property will be developed and it will be developed some day because people coming here are
causing the prices to go up. And they will go up —it is all supply and demand. But I know from
talking to the City that a lot of the people want to have lots that not just the wealthy can afford.
Already in the County, I am selling lots at $50,000 each for mobile home people, because that's
the highest that some of them can afford. And they've gone up from $35,000 and $30,000 just a
couple of years ago, because the County and it's restrictions —and I did the same thing, I stood in
front of the County more than once and told them the days was coming where they were going to
price people out of the market. Well, it's happening already. Same thing is going to happen here.
These will all be developed some day, but it's only going to be wealthy people that can afford to
come here and buy these lots. I think that if some common sense was used, maybe 161'—I don't
see a rational reason why 16''needs to be improved when you've already got two others roads
that have frontage here. And, maybe if nothing else, on a lot of these lots where there are these
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extra costs, there are taxes that are not being paid now that would be paid when they were
developed into lots that could pay for these roads down the road apiece.
Next parcel, 44, is actually a piece that I own, and it's in an area that is the unpaved part of
Milwaukee—the no man's land out there where Milwaukee hasn't been improved between east
and west Milwaukee roads that are improved. And we have an eight-acre parcel—that stuff out
there is zoned up to fifteen units per acre. Right now, it would be perfect to put in either a mobile
home park or retirement mobile home park or condos. We are getting more and more people that
want that sort of thing, and we have a need for it. But, again, all of the owners —and I'm one of
them—we bought this thing five or six years ago, and we have to improve all of the roads and do
all of that. And it's too expensive. It's just too expensive, so nothing is happening. And there's
a good eighty lots out there that could be developed, but because it's so Banged expensive to do it
and the City is waiting for the owners and the owners are waiting for the City or a miracle. So,
nothing is happening, and there's a whole tax base that is disappearing.
Last parcel is just a little 7/10 of an acre parcel, also in that in-between area of Milwaukee Drive.
And I've got it for sale—I've almost sold it two or three times. It's got sewer right there, it's got
water right there. The power is 421 feet away—the parcel next door, if you look at it, and you
go to the left where you just see estates —there's homes all up in there. Well, there's 421 feet
from where power is to this lot. Because it's in the City, it's going to cost $12,500 to bring
power that 421 feet. And I couldn't believe that when I heard it, so I made two phone calls, and I
came over to the City. And those are the rules. If this was PUD, it would cost about $2,200 —
it's about $5.00 a lineal foot to put in power. And I still don't understand why it costs $30 a foot
instead of$5 a foot because power is in the City and not in the County. And I'm real comfortable
with these figures, cause like I say, it was so overwhelming that I came over and verified and
double checked and what have you.
So, the last piece of paper that you have, because I'm trying to make this quick and just kind of
food for thought, right now—and I'm one realtor out of a couple of hundred and I do more land
than most—but even so, I'm one of many that are out there. So, I'm sure, I know for a fact that
I'm not the only one that's lost deals and not the only one that has people that wanted to come
here and spend their money and didn't. I added up on those five parcels of property. I added up
the lots that we would have had that we're not going to have now, and it's 211 lots. If we put a
value on them of$35,000 per lot, there's over $7 million worth of lots that would be on the tax
rolls right now in the City that aren't. There is, if you figure the development costs at $17,000
per lot, there's $3.5 million that didn't come to the community that would have paid contractors
and what have you—all of this would have benefitted the community. So,just on these five
parcels, none of that is coming in. The tax base isn't there, and so I'd like to recommend that you
consider this and you think about this, and if instead of requiring that roads need to be paved
because it's a rule, change the rule. And get the development in here, and when you get the tax
money, then pave the roads if you have to have it. I'm not saying no paved roads, cause you've
got to have paved roads, but you don't have to have it on two or three sides of some of these
developments. I don't know why it needs to be required. That's it—it was quick—I hope it
wasn't too quick.
Wiggins: That's fine, Jace, I'm glad you came. It's a subject we've talked about here.
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Rogers: Actually, Mayor, I could say that in the meetings this past week, both at the Utility
Advisory Committee meeting and also the Community & Economic Development Committee
meetings, all of these subjects were discussed, and both the Community & Economic
Development Committee is taking action on property development and Deputy Mayor Campbell
and myself are trying to come up with a plan on street development.
Wiggins: Wonderful.
Rogers: So, if I can reassure you that it certainly has our attention. But this is valuable
information.
Wiggins: Good. Anyone else on the Council?
Quinn: Mr. Mayor, if I could add in response to Jace that also recently I have assigned Tim Smith,
our Economic Development Director, to work on a special project to deal with development
standards, development issues in the City. We've talked long and hard about economic
development, and we've actually had some successes in the commercial and industrial areas. But
one of the areas that we have shown very little success on, not just recently but in years past, has
been residential development in this community. I can't tell you when the last subdivision of any
size has been built in P.A. But, it's been years, and so we're taking a look at all of those things —
a combination of standards, a combination of incentives, a combination of issues that deal with
whether we can not necessarily eliminate the standards, but change them and also finance them in
a different way. So, I've asked Tim to take a good hard look at that and as internally in staff,
we're going to review that and try to get to that as quick as possible. There are a couple of
projects that are time sensitive right now that we may address, but the issues that you have
brought up are something that's endemic in this community. So, we're going to take a hard look
at it and see what we can come up with. And I know that the Council committees are as well.
Schmitz: That's wonderful, thank you, and if I can be of any assistance, please give me a call.
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