When the Port Townsend City Council discussed alternatives for the Cherry Street property Oct. 16, their conflicting priorities were twofold.

The City Council didn’t want to take up any more of the city staff’s time than it had already spent on this issue, but they also didn’t want a property they’d intended to be affordable housing to be turned into the opposite of that by whomever bought it.

As such, the council is inviting the community to a public hearing on Monday, Nov. 6, at 6 p.m. in the council chambers on 540 Water St., to solicit input on whether the Cherry Street property is surplus to the city’s needs.

In the meantime, The Leader sought to find out how we got to this point by asking Port Townsend City Manager John Mauro, Public Works Director Steve King and Planning and Community Development Director Emma Bolin.

The Cherry Street building, located between Cherry and A streets, was delivered to Port Townsend via a barge from Victoria, BC, after the city and the Homeward Bound Community Land Trust entered into an agreement to establish affordable housing for the community.

The city manager at that time was authorized in April 2017 to negotiate a loan of $250,000 with Homeward Bound to pay for the cost of barging what became the Cherry Street building, while an additional grant of $30,000 was authorized in June 2017.

In May 2018, the city authorized a 20‐year taxable bond of $834,000 to fund engineering, design, permits and pre-construction costs, as well as a loan of $925,000 with Homeward Bound, to be repaid over a 40-year period. In March 2019 the city authorized the city manager to negotiate a project management agreement with Terrapin Architects for $9,000.

However, in November 2019, it was already being estimated that the project’s costs would exceed the loan funds available to complete it by its estimated date of December 2020, and in July and August 2020, the city manager and staff were discussing with Bayside whether they’d be interested in completing the Cherry Street project.

“We took a decision to the City Council to transfer the Cherry Street property and improvements from Homeward Bound to Bayside on Sept. 28, 2020,” Mauro said. “It was determined that Homeward Bound did not possess the capability to get across the finish line.”

King recalled that, although Bayside explored the option of adding more housing units to the project, even the combination of grant funding and increased rent would have left a significant gap in uncovered costs.

“By that point, we were dealing with increasing inflation and vandalism of the property,” King said. “From a code enforcement standpoint alone, it was becoming a nuisance. And we still needed to ensure it had sufficient sprinkler systems and earthquake safety, so it became a matter of disregarding the sunk costs, and looking for the least costly options going forward.”

The city had parted ways from Bayside by the summer of 2022, and while Mauro praised previous city staffers and elected officials for their considerable time and efforts, he also acknowledged that not enough planning was done before the city decided to proceed with the Cherry Street project in the first place.

“It’s long since obvious to the public that things didn’t go as planned,” Mauro said. “But before the community gets spooked about the Evans Vista housing development, I want to reassure them that we have different city staff and a different council now, and we’re doing the sort of deliberative coordination and due diligence that wasn’t done as much on Cherry Street.”

In addition to reworking the city’s parking easements with Grace Lutheran Church, Mauro, King and Bolin agreed that the city is not yet precluded from exploring options to favor prospective property buyers who might wish to establish higher-density housing.

In the meantime, the Port Townsend City Council has made a firm decision to demolish the Cherry Street property, even as they continue to work out a solid timeline for doing so.

“We made a mistake,” Mauro said. “Let’s admit it, learn from it, and use what we learned to do better as we move forward.”