Keeping Public Moorages Public

Final Attempt to keep Public Moorage Public, utilizing Moorage Revenues for Improvements  

Prepared by Jeannie O’Brien, Founder of Friends of Lakewood Moorage. Sent to CM Debora Juarez, Parks Committee Chair, CP Bruce Harrell, District 2 Rep, Peggy Tosdal, Regional Parks and Strategic Outreach for Lakewood and Leschi Moorages and Paul Wilkinson, Golf, Moorages and Amy Yee Tennis Center Manager

Objective:  Persuade Parks Department to allow DPR employees Paul Wilkinson and Peggy Tosdal to continue to manage Lakewood Moorage at least until 2021, and to continue to make repairs and improvements using moorage revenues.

History

1910 Parks Board promised public moorage in Lakewood neighborhood while Seattle’s exercise of eminent domain was taking waterfront lots for installation of Olmsted’s Lake Washington Blvd.

1952 Seattle’s Park Department met with Lakewood neighbors and built Lakewood Moorage replacing a public boathouse owned by CB Dodge, a neighbor who lost the land for his public boathouse during City’s takings and was given the temporary right to operate his marina on publicly owned Ohler’s Island.

DPR managed the public moorages by hiring concessionaires.  Revenues were split between the Parks’ general fund and the concessionaire.  DPR received 39% of total revenues through 2010, 43% until October of 2015 when Parks took over operation.  There was never a reserve fund set aside by Parks for maintenance.  Parks share of moorage revenues went to general fund to pay for parks programs throughout Seattle.

1999 An engineering study and in-house Parks review identified significant decay of wood timber pilings, docks and breakwaters.

2003 Aqua Marina Public Moorage in Rainier Beach was so neglected by DPR and dilapidated that it didn’t survive a winter storm and was closed permanently.

2009 Parks Superintendent Tim Gallagher proposes an increase in moorage rates to pay for improvements or support debt service used for improvements, 10 years after the need for improvements is identified.  Also proposes to transfer DPR moorage revenues from Parks General Fund to Cumulative Reserve Subfund to pay for improvements.

2010 Gallagher resigns.  No further consideration given to debt financing or setting aside DPR funds for repairs under Christopher Williams’ tenure as acting Parks Superintendent (2010-2015).

 

The Privatization Plan

January 2013 After knowing of the needs of the moorages for 13 years and failing to set aside moorage revenues for repairs, Parks announces plan to privatize moorages with RFP seeking private capital investment of $8-11 Million.

August 2013 With help of CM Bruce Harrell, moorage tenants were able to persuade Christopher Williams to seek Mayor McGinn’s support in cancelling the RFP and to ask for $4MM in the 2014 Budget for immediate repairs to South Leschi.  Christopher Williams was asked at a public meeting whether any request had been made of council for funds to repair the moorages, either with direct capital or bond financing.  No request had been made.

October 2013 $7MM of improvements begins  on Jefferson Golf Course, with golf revenues supporting operations and maintenance of the course. 3.5% of gross revenues are paid to the Park fund to support overhead costs, with the remainder set aside for golf capital improvements.

2014 $4MM was provided in the 2014 Budget for repairs. Project Advisory Teams convened, decided that Seattle’s golf course model was appropriate for moorages, where independent operator managed operations and DPR paid for capital improvements.  Both Leschi and Lakewood Moorages’ PATs opposed privatization and approved the golf course model.

January 29, 2015 Parks ignores work of Project Advisory Teams, announces intention to seek operator with private capital investment of up to $20 Million

April 21, 2015 Public testimony at Parks committee hearing asking that Lakewood and Leschi be separated.

May 3, 2015 Lakewood Tenants signed and submitted a letter to Christopher Williams asking that Lakewood be treated independently from Leschi, and that repairs to Lakewood be completed in phases using moorage revenues, minimizing tenant displacement and not interrupting revenue stream

(The Lakewood Project Advisory Team (PAT) was made up of 11 volunteers, 6 of whom were Lakewood tenants.  5 of the 6 tenants signed on to the demand letter. 6 of the 11 members signed on, a majority of the PAT)

May 12, 2015 Letter from CM Jean Godden and CM Bruce Harrell to Jesus Aguirre to request separate RFPs for Lakewood and Leschi

May 13, 2015 Letter from Bruce Harrell to Christopher Williams and Jesus Aguirre to separate the projects at Lakewood and Leschi

Mid-May, 2015 Learned that the Lakewood PAT member chosen by Parks to participate in the RFP development was Michael Murphy, not aligned with the tenants’ position on the May 3, 2015 letter and not a Lakewood tenant

May 19, 2015 Public testimony reminding Jean Godden, Chair of Parks, about our meeting with her and about her letter asking for separate RFPs for the two moorage locations

May 21, 2015 Meeting with Christopher Williams, Paula Hoff, Bruce Harrell, Central Staff in attempt to persuade Parks to bifurcate Lakewood Moorage from Leschi

June 1, 2015 Christopher Williams declines to allow Lakewood Moorage to be treated independently.

July 21, 2015 Public testimony at Parks committee hearing asking for revenues generated by moorages to be spent on repair of moorages.

July 9, 2015 CM Sawant hears concern of Lakewood and Leschi community, agrees that privatization of these public assets is not in the city’s best interests.

October 2015 Parks takes over management of moorages from concessionaire.  Immediately begins improvements to make docks safe using moorage revenues.  Intends to offer $2 of the $4MM set aside for repairs in 2014 and not yet spent as leverage to the new operators, and plans to spend $2MM immediately on South Leschi.

November 17, 2015 Parks advertises RFP with a submittal date of January 6, 2016.

Sometime in 2015  Parks decides to have one representative from each of the Lakewood and Leschi PATs help select a proposal.  The PAT member chosen to represent Lakewood, Sara Lopez, is the only Lakewood PAT member with a boat at Lakewood that did not support the tenants’ requests to separate Leschi and Lakewood and to use moorage revenues for repairs.  Sara Lopez has been a Parks department employee and has been vocal in her support for the privatization plan presented by Parks.

February 8, 2016 Proposal submitted by Foss Waterways Management (FWM or Foss) is accepted, even though the bid contains the exact slip configuration that was successfully opposed in 2013.  Foss did not bother to obtain new drawings from Marine Floats. If the submitted proposal is to be relied on, Lakewood will still lose 37 small boat slips from a total number of 138 and gain 11 new slips for boats that are 35 feet or longer, a net loss of 26 slips.  In a city surrounded by water with so few public slips, we should be working to build more slips, not less.

Summation

FWM included all of the $4MM in the city’s budget in its revenue/cashflow analysis.  This $4MM was set aside in 2014 and was specifically designated for emergency repairs at South Leschi.  These repairs have not been made. Parks claimed at a public hearing that this money was going to be used for leverage to entice a private operator, rather than repair the failing docks at South Leschi.

The one difference in the 2013 bid to this one is the rental rates increase.  FWM suggests a 1% per year increase until 2021 when the average will be $9.60 per lineal foot (up from a south lake Washington average rental rate now of $8/LF).

Numerous public disclosure requests have been made in an effort to understand why Parks has approved the Foss proposal when it is no different than the 2013 proposal that resulted in cancellation of the RFP.  The lack of transparency is concerning.  And disturbing. After many public disclosure requests, we still have not been provided the financial statements for the most recent 10 years of moorage / concessionaire operations, although we are told that Parks was provided them every year.  Parks failed to provide oversight of the prior concessionaire and argued with them as to who was responsible for repairs, such that no repairs were completed.  Leschi tenants became desperate for dock repairs, while Lakewood tenants knew that we could repair our docks with moorage revenues over time and didn’t need private capital.

Appalling is the fact that the Foss proposal was accepted when the drawings submitted were prepared in 2013 and were the subject of anger and discontent among tenants in 2013 that resulted in the cancellation of the RFP.  Within the proposal Foss talks about their skill in marketing, something entirely unnecessary in the operation of Seattle’s public moorages. There are no vacancies at either Lakewood or Leschi, and there is a long waiting list at Lakewood. The fact this is included says FWM doesn’t know the market.

FWM intends to invest $350,000 in Lakewood for permits in 2020, and $4.84 M in capital in 2021, to generate an additional $66,000 in revenue.  This doesn’t make financial sense.  If Lakewood were managed by Seattle Parks and rehabilitated in phases as we have proposed using just moorage revenues (See Appendix 1, APE Drilling’s Repair Schedules, Estimated Costs and Engineered Drawings for Lakewood Moorage), there would be no need for a private operator in FWM to manage Lakewood for 40 years.  Parks could hold onto and improve a valuable public asset, keeping it in the Seattle Parks System for years to come.  Parks is great at programming, and SE Seattle Youth are eager to enjoy Lake Washington.

One argument relied on by Parks is that the economies of scale required one operator to run both moorages.  We at first believed that because Lakewood required less money in repairs, Foss needed Lakewood’s revenues to fund Leschi’s repairs.  Now that we see numbers, Foss is only generating an insignificant increase in revenues at Lakewood ($66,000), and only after spending $4.84 MM on repairs.  (See Appendix 2, Moorage Revenues and Expenses from 2016 – 2025 obtained from FWM Proposal submitted in 2016 in response to RFP) So this cannot be the case.  There is no reason for one operator to run both Lakewood and Leschi.

Parks programming and facilities all over Seattle have benefited from moorage revenues for over 60 years.  Now when the moorages need rehabilitation, Parks is seeking outside capital. Parks says they don’t know how to manage moorages, yet when Parks Paul Wilkinson and Peggy Tosdale took over in October 2015, they did quite well and were very excited about the opportunity to include moorage management in their jobs description.  Lakewood can continue to be managed by Parks; public access and Parks programming could be increased without commercializing the moorage.

Lakewood Moorage serves the neighboring community.  Of 150 tenant addresses on file with DPR, 124 have Seattle zip codes. Of these, almost 2/3 reside in 98118 and 98144. (See Appendix 3, Lakewood Marina Tenants in Seattle by Zip Code) Lakewood residents are neighbor to the very property that was taken by young Seattle to implement the Olmstead parks and boulevards, keeping the Lake Washington Boulevard shoreline public and non-commercial, whose ancestors were promised public moorage when their waterfront lots were condemned by eminent domain in 1910.

40 years is too long a contract term, removing any leverage that Parks would have with the properties.  If Foss proposes a change, Parks is somewhat forced to agree or have a breach of contract on their hands and a big payout for improvements already undertaken. Parks having to settle with Magnuson Building 11 LLC for $7.25 million in 2013 is not so long ago. There is no reason to put Parks in a similar situation after such a recent mistake.

Parks could continue to run Lakewood for at least the next five years, as Foss doesn’t intend to invest in Lakewood until 2021.  If there’s still a need for a $4.84 MM investment, the Foss bid can be revisited.

Lakewood is so very different than Leschi.  Leschi tenants agree, and at one point in the negotiating process supported treating them separately. Almost all of Lakewood’s current tenants support this proposal.

We all know that excise tax revenues are higher than at any time in Seattle’s history.  The city is using revenues rather than bonds for some projects.  The city bailed out a failing bike share system with hardly a blink of an eye.  If for some unforeseen reason that repairs to Lakewood cannot be accomplished with just moorage revenues (as we have shown that they can), then a minor budget request should be approved to keep Lakewood Moorage from being lost to a private capital partner for 40 years.

After so many years of neglecting the physical structures and failing to oversee the management of the moorages, Parks now wants to pass on its obligations and allow a commercial, for-profit operator to control these public assets for 40 years.  There is no justification for this solution, and Parks offers none.  Tenants don’t want it, the neighborhood doesn’t want it, and we don’t need it.

Respectfully submitted by Jeannie O’Brien,Founder, Friends of Lakewood Moorage     Chair, Parks Committee, Lakewood Seward Park Neighborhood Association          Immediate Past President and Board Member, LSPNA