PFD commissioners affirm their support for SK project

‘Devil is in the details’

PORT ORCHARD — The proposed project to construct a $20 million community events center in downtown Port Orchard continues to inch forward following a meeting by the Kitsap Public Facilities District commissioners Monday in Poulsbo.

In a somewhat confusing, but nonetheless incremental march forward for the project, commissioners asked Port Orchard Mayor Rob Putaansuu to provide additional details to the city’s “first steps” outline he presented at the meeting, in combination with an interlocal agreement to be agreed to between the city and PFD. The commissioners will reportedly make a final decision on funding the project at its next meeting on Sept. 23.

While the PFD commissioners individually voiced their strongest support for the South Kitsap project, they and the project’s partners — city and private entities — are in the midst of a “devil is in the details” moment while they work through a labyrinth of procedural steps in moving it forward.

Chairman Daron Jagodzinske assured South Kitsap proponents that he was firmly behind the project. Jagodzinske said he was confident the project will be funded and voiced his strong support for the South Kitsap community events center.

“This is our number-one project. This is the project that we are going to give money to,” the chairman said. “I want to give [you] that kind of understanding from me personally as one member of the board.”

At the PFD’s July 29 meeting in Port Orchard, the commissioners ranked it as their top-priority project to receive funding from the pool of Washington state sales tax rebate money allocated to Kitsap County. The PFD board is responsible for allocating those funds to county projects deemed providing the greatest benefits to its community.

At its latest meeting, PFD commissioners said they still weren’t certain how much money they would have available based on its overall bonding capacity. PFD Executive Director Mike Walton said Kitsap County commissioners still haven’t told him what that bonding capacity would be, although he did say upwards of $45 million is possible.

On Monday, Putaansuu provided PFD commissioners with a three-page, five-step statement outlining the city’s first steps in advancing the project and asked $400,000 initially for planning, outreach and to create a more comprehensive cost estimate. The funding request also would cover the costs to hire a consultant for architectural engineering services, produce a needs assessment and for research to create a preliminary report to support the design. He emphasized the city is advocating that the project and its funding be broken into separate, phased steps.

As part of the project’s fifth step in the mayor’s outline, the city asked PFD’s commissioners for $9.5 million — overall, about half of the community events center’s estimated cost. The combined financial request for all five steps is $12 million, the mayor told the commissioners.

“Looking at the timeline, we’re looking at two to three years from needing the $9.5 million,” he said.

The mayor said he believes the special events center work should be separated into three smaller projects, which would make it easier for the city to obtain grant funding. He pointed to planned shoreline restoration work as one element in which seeking grant funding would be made easier.

“There are things we can pursue by itself whereby the city can fund itself instead of lumping that with the community center,” Putaansuu said. “It [otherwise] won’t compete as well for those dollars.”

He said there is state parks and recreational grant funding potentially available for a public pier, which is proposed as part of the overall project plan.

While the PFD commissioners voiced their support for the South Kitsap project, its public-private group kept the pressure on for a firm commitment by the board.

Putaansuu said the city believes a timely decision by the PFD commissioners is critical — and the project’s fate rests on it — because the key player, Kitsap Bank, must make a decision soon about where it ultimately will locate and build a replacement headquarters building. That new building, he said, would continue to house some 50 employees who live and work in Port Orchard. Should the new headquarters leave downtown, the mayor said, the city would lose 150 jobs to another community.

He said the overall master-plan development project by Sound West Group — expected to cost more than $100 million — is contingent on Kitsap Bank, the anchor tenant, signing a development agreement and committing to the project.

“Kitsap Bank feels strongly that our community center project and the conference space it provides [is] a vital piece to our downtown redevelopment,” Putaansuu said. “Our challenge is that Sound West Group has 11 properties under contract, but can’t close on those properties without commitments from the bank or the PFD.

“If those contracts were to expire, I’m afraid our master plan project won’t move forward.”

Wes Larson, a partner for Sound West Group, told the commissioners that the plan envisioned for Port Orchard is “transformational.”

Larson pointed to a number of his group’s projects in Kitsap County as examples of their transformational potential, including Bainbridge Landing on Bainbridge Island, a one-acre park that is the largest project to date in that city. He said it has been named one of the top projects in the region by the National Association of Commercial Real Estate. Larson’s group also created Marina Square in downtown Bremerton, a $130 million project that he said was a transformational effort that spotlighted a partnership between the public and private sector.

“What we have here is Sound West Group partnered with the oldest continuously operating bank in Kitsap County in a truly transformative project for downtown Port Orchard,” Larson said. “We cannot as a developer go forward with the project without the commitment of Kitsap Bank. That part of the project is truly the anchor.”

He added that a project of this scope and its potential for transformative development “in a downtown urban center that’s suffered from decades of blight comes along once in a generation — if that. The stars are aligned.”

Larson said Sound West Group has already spent $1 million on the Port Orchard project, which he said proves his company’s commitment to the effort and the Port Orchard community.

Tony George, Kitsap Bank president and chief operating officer, also spoke to the commissioners. George said that while the bank is firmly supportive of the project and is a vocal proponent of Sound West Group’s overall commercial-residential mixed-use master plan for downtown, the bank must soon make decisions about where and when it will construct a new headquarters. He said his bank’s current nearly 50-year-old Port Orchard headquarters “is bursting at the seams” and is unable to house as many employees as it would like.

“While we love Port Orchard and believe in the greater West Sound’s economic potential, the lion’s share of it will continue to flow to communities north, south and east unless we do something to spark interest in Port Orchard,” George said.

He said it’s critical for PFD and the partners to move forward with the project. “Unless something is decided soon and financial commitments are made, Kitsap Bank and Sound West will need to make alternative plans. What we’re looking for is a firm commitment for you to fund your number-one project.”

The South Kitsap Community Events Center, as proposed by the City of Port Orchard and its private partner, Sound West Group of Bremerton, is asking the PFD commissioners to commit between $10 million and $13 million in funding to serve as a financial backbone for the project.

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