SILVERDALE — Although two presentations were on the agenda of the Kitsap Public Facilities District’s regular meeting Monday night in Silverdale, it was the pitch from Port Orchard that brought more than 100 people to the meeting site at the Best Western Plus hotel.
A concerted, polished community outreach effort by civic boosters and a consortium wanting to create a multi-use community events center and commercial, office and residential building cluster in Port Orchard managed to fill the small conference room where the KPFD’s board of directors heard a presentation led by Steve Sego, director of projects with Sound West Group (SWG), a Bremerton-based commercial development company.
Those arriving at the last minute to hear the presentation lined the hallway outside the conference room to listen in as Sego walked through the consortium’s presentation.
The Port Orchard presentation was a critical part of the public-private partnership’s effort to piece together funding sources for the approximately $20 million community center project that would sit at a prime downtown waterfront location. SWG, which is partnering with a public entity, the Port of Bremerton, to develop the keystone project for Port Orchard’s downtown area, is relying on up to $13 million from the KPFD to serve as a funding foundation in order to bring in other civic and private funding sources.
The South Kitsap Community Events Center, projected to be up to 30,000 square feet in size, would be the first element of a broader project to redevelop the surrounding downtown area over a five- to seven-year period. Last year, Sego’s Waterman Investment Partners, LLC entered into an agreement with the city to purchase a vacant lot parcel at 640 Bay St. in order to build a multi-use commercial/residential building at the site.
That location and elements from the project’s initial designs have been incorporated into a more expansive vision SWG is creating. The major tenant of the original 640 Bay St. plan, the Kitsap Regional Library’s Port Orchard branch, has now been relocated to space within the community events center.
The library’s Port Orchard manager, Kathleen Wilson, who was part of the presentation team, spoke of the library’s vibrant role downtown and in South Kitsap.
“We have more than 14,000 visits by community residents each month,” Wilson told the board. “We’re on the waterfront now, and we’d love to remain connected to downtown in the new community events center. We plan to be the only library in North America that checks out kayaks, as well as books.”
Overall, Jack Pauu, SWG’s director of development, said the proposed master plan would include more than 420,000 square feet of office, commercial and residential space. Sego said the development would add 468 parking spaces to accommodate new and existing users downtown.
Pauu added that “the community center would be the first domino, followed by the parking garage with four to five stories of commercial and residential.”
Sego noted that the KPFD was created to “support and fund projects just like that proposed for South Kitsap. You may never be asked to consider a proposal that meets or exceeds every aspect of the obligations you have to serve as a catalyst for economic growth and tourism.”
The KPFD is a municipal corporation with the authority to allocate an existing pool of tax revenue for Kitsap County projects it deems of civic value. The district board has previously allocated money for the Kitsap Conference Center at Harborside in Bremerton, and improvement projects for the North Kitsap Regional Event Center in Poulsbo and the Kitsap Fairgrounds and Event Center in Silverdale. South Kitsap has yet to receive financial support from the facilities district.
Project needed ‘for decades’
Port of Bremerton Commissioner Larry Stokes, who joined the SWG team for the presentation, said the proposed project was “something that Port Orchard and South Kitsap have been needing for decades.” He said he and the Port were 100-percent in support of the project and planned to not just help get the project started but see it through until it’s finished.
Sego told the board that “now is the time for South Kitsap” to not only to reap the benefits of district funding but to capture a financial window that has opened due to Opportunity Zone benefits now available in the city’s recently designated areas.
“The maximum Opportunity Zone investment benefits will end at the end of the year, so we need to begin the project now,” he said.
SWG CEO Wes Larson told the board that construction of a new civic and events center would generate economic development benefits through new jobs created not only during the construction stage but after the building is operational by attracting visitors from outside Kitsap County.
Sego quoted an estimate by regional economics firm ECONorthwest that for every $1 million spent on construction, five to seven jobs are created. If the project reaches completion on all of its phases, he estimated $100 million will ultimately be spent on the project.
“That’s 500 to 700 new jobs created at about $58,000 [in salaries] for each job,” Sego told the board. “That’s a big chunk of payroll every year that we could add for the phases that’s going to take five to seven years to build this project out.”
Kitsap Bank an interested partner
A video produced by the consortium featured testimonials given by Rob Putaansuu, the city’s mayor, and Tony George, president and chief operating officer of Kitsap Bank. George said the Port Orchard-based banking institution is interested in creating a new, expanded headquarters that could be part of the overall development effort.
“Kitsap Bank is very interested in this project. We own most of the property that’s involved in this plan,” George said. “We are currently in a 50-year-old building … we’re busting at the seams both at our Bremerton location and Port Orchard.
“Banking is changing. As we grow, there are a lot more jobs that are based inside our headquarters and a lot less on the branch side, so we need room to grow. As most of you know, we’ve been in Port Orchard for 110 years within a block of where we are now. We’re very patient — we’re owned by a family for the last 100 years and we do things for the long term.
“We’ve been in this situation for several years now looking for opportunities. We’ve been hesitant to develop anything in Port Orchard because we didn’t want to be the only thing going on. As banking becomes more competitive and we need to attract talent — and it’s getting harder and harder to attract talent to a 50-year-old building that’s dated — how much more attractive would it be to be near the waterfront with a library that’s checking out kayaks at lunchtime.”
George said the headquarters location is key to attracting top talent, and he said the community events center “is very, very interesting to us and is the linchpin to making all this work.”
Sego said with a facilities district buy-in sometime in April, SWG’s objective would be to have a development deal struck with the City of Port Orchard so that ground could be broken on phase one in a year’s time.
In addition to proposed funding from the facilities district, Sego said approximately $7 million would be sought from city, county and private benefactors he said that have been identified. He also told the board that he has been in talks with 6th District Rep. Derek Kilmer’s staff on ideas for funding, one of which is a USDA grant. Additional grant sources have been identified, he said, including state Department of Commerce grants, state Recreation and Conservation grants and regional economic development grants.
Some of the board members raised concerns about the group’s lack of concrete funding partners beyond the KPFD.
Bremerton KPFD representative Walt Draper said, “I see the PFD being asked to write a big check. Who else has committed to writing a check?”
Sego responded that other partners are waiting for the KPFD to make the first commitment before joining the effort. He also shared that the project team has had discussions with local benefactors and contributors who he said are ready to step in once the KPFD agrees to support the project.
He also said his team plan to approach the city and county about additional financial support. KPFD funding could be conditioned on the group’s ability to raise the full amount of funding needed to complete the events center.
“The mission of the KPFD is to serve as a catalyst for economic opportunity,” Sego said. “Once you agree to support this project, others will follow. Our team is willing to invest more than $100 million in the surrounding economic development if you’re willing to help fund the events center.”
City has made commitment
Putaansuu reminded the board that the City of Port Orchard has committed millions of dollars in sewer and water infrastructure it is contributing to the plan, which he said, “is not an insignificant amount of investment.”
Port Commissioner Cary Bozeman said the creation of the Kitsap Conference Center in Bremerton is an example of the benefits realized through the facilities district’s faith in that city’s downtown and its ability to see the project to completion.
“This reminds me that we wanted to keep Kitsap Credit Union in Bremerton, and about that time they were thinking of moving out of town,” Bozeman said to the board. “We convinced them that if we went ahead and developed [the project] that they said, OK, we’ll build our headquarters downtown in Bremerton. And they did.
“Sitting here tonight, it’s like deja vu all over again.”
Putaansuu said the community events center would be “transformational” for downtown Port Orchard and South Kitsap. He related his experience a few years ago doorbelling while running for mayor.
“Time and time again I heard, ‘What are we going to do about downtown Port Orchard?’ Right now, you have an administration, my staff and City Council that are all committed to making that happen. We’ve amended our code, we competed for the Opportunity Zone designation and we have incentives that can make this happen.
“We have a strong economy and market demand for housing. We have a corporate partner that’s willing to bring jobs to our community. And we have a reputable developer that can make these concepts real. The South Kitsap community center project is the catalyst we need to get Kitsap Bank to commit to building their corporate campus in downtown Port Orchard.
“If we don’t act, we run the risk of not only losing those 150 jobs they could bring but losing the 50 jobs that are already there. This is a once in a lifetime opportunity and we can’t allow that to pass.”
Sego concluded his presentation by reminding the board that Kitsap Bank is not just a creator of jobs and economic opportunity, “they’re part of our South Kitsap community. They have been behind us for more than 100 years, helped us build our homes and businesses, and they’ve supported our community.”
He lauded the bank’s history of contributing to community projects, such as funding a new football field for South Kitsap High, but also the “100 acts of community support that we don’t know about. We need to keep Kitsap Bank’s new corporate headquarters in Port Orchard. They’re irreplaceable.
“More important, they’re willing to take the next step to reinvigorate our city and county.”