PLA Development Agreement Extension

Extension of the PLA Development Agreement with Jefferson County – PLA submitted paperwork early in 2013 to have their Development Agreement extended from 2020 to 2025, due to the sluggish nature of both the Housing Industry and the world economy. Update, May 2013:  Jefferson County Board of Commissioners voted to extend the Port Ludlow Associates Development Agreement to 2025.


March 26, 2013: Staff Report to Jefferson County Board of County Commissioners (BoCC) from David Wayne Johnson, Port Ludlow Lead Planner (amended May 6, 2013).

Subject: Comments, Findings, Conclusions & Recommendations on MLA12-000260- Port Ludlow Associates 2013 Development Agreement Amendment.

Issue: County Received request from Port Ludlow Associates to extend the terms of their development agreement (DA) and the Olympic Water & Sewer memo of understanding (MOU) by five (5) years, and preliminary plat approval by three (3) years. 

March 4, 2013 the BoCC approved the initial request to review the proposed amendment and schedule the required public hearing. A ten (10) day public comment period to expire on March 18, 2013 was included as part of the notice of public hearing schedules for April 1, 2013.

Attached and summarized below are the public comments received during the ten day comment period, the Applicant’s verbatim response to those comments, as well as a comment from the Jefferson County Environmental Health Department. Staff encourages the BoCC to read the public comments in their entirety. Upon instruction by the Board, Staff has provided further analysis of issues raised subsequent to the public hearing and before BoCC deliberations and makes a final decision.

Public Comments:

Port Ludlow Village Council:  staff received a letter from the Council on 3-18-13 supporting the extension of the development agreement and outlining the following concerns:

  1. Are there sufficient water rights to meet the needs of the future residents contemplated in the Development Agreement? Is ownership of these rights protected for the Port Ludlow Community?
  2. During drilling for Well #17, contamination was identified. There is concern among the community that those clean up costs may be passed on to OWSI ratepayers rather than be absorbed  by the company’s ownership.

Anthony Simpson: staff received a letter from Dr Simpson on 3-18-13 supporting the extension of the development agreement, outlining the following concerns:

  1. Soil Contamination Remediation and its Costs
  2. Water Capacity for project demographic standards

Quentin F. Soper, PhD: staff received a letter from Dr Soper on 3-18-13 supporting the proposed amendment only if the following condition is met: “A complete cleanup of all toxic contaminants at Well #2/ subject to the approval of WSDOE.”

Tom Stone: staff received an email from Mr Stone on 3-18-13 who indicated his full support of the proposed amendment.

Bert Loomis:  staff received an email with letter from Mr Loomis on 3-18-13 stating he was in support of the proposed amendment subject to the following conditions:

  1. The prompt & complete cleanup of all toxic contaiminants at well #2, subject to a completion bond approval by the Washington State Department of Ecology (WSDOE).
  2. The complete removal of all toxic contaminants from the Port Ludlow Golf Course, with a posted completion bond subject to approval by WSDOE.
  3. Written confirmation from the Washington State Department of Ecology that PLA/OWSI has obtained adequate Water Rights for full build-out of the Port Ludlow Master Planned Resort.

Applicant’s Response

Staff received a written response from Port Ludlow Associates 3-25-13 regarding the public comments. With regard to the contaminated well site:

781 Walker Way: “This site is owned by OWSI. The DOE is aware of the environmental condition of this property. The contamination was caused by a leaky underground storage tank that was removed in 1990, before PLA acquired ownership of OWSI. OWSI believes the poperty will be remediated within the near future. At least two remediation plans have been prepared and are under discussion. PLA, OWSI, and the prior owner of OWSI, Poope Resources, are negotiating the allocation of responsibility for the cost of remediation and other issues relating to the remediation. If this negotiation does not result in the agreed remediation of the peoperty, and if the parties dispute the scope or cost of the remediation, then some form of dispute resolution process, such as mediation, arbitration, or litigation, may be needed. To the extent that Pope Resources or another third party does not bear the remediation cost, OWSI or its ratepayers may bear or share the cost. No remediation costs will be imposed on OWSI customers without the approval of the Washington Utilities and Transportation Commission following a public process. It is OWSI’s expectation and understanding that it should use commercially reasonable effort to cause potentially responsible persons who caused the contamination to bear the remediation costs, rather than accept those costs and simply allocate them to its ratepayers.”

With regard to the Golf Course contamination site:

Golf Course Cart Barn at 751 Highland Drive (Mr Simpson incorrectly describes the location as the Maintenance Facilities at 181 Cameron Drive): This site is owned by PLA. The DOE is aware of the environmental condition of the property. The contamination was caused by a leaky underground storage tank at least 15 years ago, before PLA’s acquisition of the property, and to PLA’s

April 2013–  Jefferson County Commissioner John Austin spoke on several topics including the proposed Metropolitan Park District (MPD) and the Extension of the Development Agreement.  The extension of the Development Agreement was discussed and Commissioner Austin said that citizens are in favor of the extension with two provisions:  1.) The availability of enough water and the cost of pollution  2.)  The clean-up of any contaminated wells.  The County is looking into the issues and will present the findings at a later date in April.  There is a possibility that the extension will be granted.

COMMUNITY REPORT:  David W. Johnson, County Lead Planner, reported that the County is looking into the water issues before extending the Development Agreement.  The announcement of whether the agreement will be extended should occur around May 5, 2013.  The agreement is a planning document which does not contain provisions for regulation.

DEVELOPER REPORT:  Diana Smeland, PLA President stressed the safety of the wells.  She stated that Well #2, which had quality issues is now getting frequent testing.  She also confirmed that PLA is seeking a buyer for Olympic Water and Sewer (OWSI).  The firm has signed an agreement with a listing broker.  No data is available to a potential buyer until a letter of intent is signed.  There was some discussion about whether a Special Purpose District could purchase OWSI.  Diana stated that would require a confidentiality agreement.

March 2013 – The single purpose of the Special Meeting was for the Council to consider and respond to a PLA request made at the General Meeting on 7 March to support and approve a five year extension of the Port Ludlow Development Agreement.   (Expiration date to be extended from May 2020 to May 2025).

Larry Nobles, as Chairman of the PLVC Community Development Committee reported that the Jefferson County Department of Community Development (JeffCoCDC) staff report on the proposed extension would be made available to the PLVC about 25 March, and clarified that public comment on the proposal would be considered if received by the JeffCoCDC  (Attn. : David Wayne Johnson) by 1 April and likely for 1 or 2 weeks thereafter.   Larry also reported that his committee favored support for the PLA and circulated a draft letter of support for the requested development extension.

Following a lengthy discussion, the Council agreed that a modified version of the draft letter should be prepared and sent to the JeffCoCDC.   The modification to express approval for the proposed extension of the Development Agreement but to note community concerns, and seek additional clarification in two specific areas, viz.,

  1. The adequacy of water rights to support anticipated needs as construction and population approach and reach build-out levels.
  2. The need to address (gasoline?) contamination found at one well site (well #17) without either direct or indirect cost to the residents of the Port Ludlow community.

It was approved by a 4 – 3 vote that such a revised letter of support be prepared and then circulated to the Council members.   Following telephone or e-mail approval, the revised letter to be signed by the PLVC President and forwarded expeditiously to the Jefferson County Department of Community Development.

March 2013 – Diana Smeland, PLA President, discussed the PLA request to the county to extend the Development Agreement to 2025 as the recent recession has seriously affected the construction industry and the company has not built any houses since 2007.  The water and sewer company also has applied for an extension.  She is asking that PLVC send a letter of support and do so by the 18th of this month.

A question was raised about water rights.  Ms. Smeland says the rights are protected through buildout.  Council members expressed concern about the condition of the equipment, and the reported contamination of the ground discovered when the company tried to drill a new well in North Bay.  There is an ongoing investigation and the contaminated soil needs to be cleaned up.  Pope and PLA will share the cost which will be between $50k and $400k.

There was a question about Well two drying up.  Ms Smeland reported it is still producing adequate water except on very hot days when it needs to be supplemented by a South Bay well.

After considerable discussion it was MSP that the Council have a special meeting on March 14 to review a report of the Community Development  Committee studying the issue of the Development agreement and to vote on our position about the extension.  A workshop meeting will also be held at that time.

PLA  would like to begin building condos and demo homes and is seeking a loan to begin.

Jan 2013 – Community report: David Wayne Johnson , Jefferson County Dept. of Community.  The PLA Development Agreement extension request is awaiting a letter from their attorney before the County will act.

Nov 2012 – COMMUNITY DEVELOPMENT:  Larry Nobles, Chairperson of the Port Ludlow Community Development Committee gave a presentation on history of Port Ludlow and the growth of the community since 1990 under the Growth Management Act.

Diana Smeland, President of the PLA shared the PLA’s plans and needs to obtain a five year extension to the current Development Agreement. The current agreement with Jefferson County will expire in May, 2020.  Due to the slowdown in the economy PLA does not believe they can complete the build out of the Port Ludlow Resort before 2020. The extension is needed to complete the build out of the resort. PLA anticipates that it will take an additional 12-18 months before new construction will begin to pick up in Port Ludlow.

In addition, there is a need to obtain a three year extension on the preliminary plat in the new agreement and a permanent change to the ten year permit on all current and future plats. If the extension does not get approved, PLA will have to start the permit process over again which will only add unneeded cost.  There will be an open period for comments and Diana requests PLVC and the community show their support through letters and attending future meetings.

David W. Johnson, the County’s Department of Community Development Lead Planner for Port Ludlow stated that the role of the PLVC with the county and developer is as the focal point and representatives of the Port Ludlow residents.

He outlined the process to amend the Development Agreement and stated that the county would only deny the request if there was a code violation.

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