The Port Townsend City Council voted Aug. 5 to schedule a public hearing to consider dissolution of the Fort Worden Public Development Authority (PDA), thus initiating a process that, if finalized and ultimately approved, would end the organization’s 50-year lease with the Washington State Parks and Recreation Commission to operate the Lifelong Learning Center at Fort Worden State Park.

According to discussions, the hearing could occur on Oct. 7.

City staff and council members said their approval would start a process that could help ensure a smooth and orderly transition of park management into the state’s hands, while describing the alternative – letting the PDA financially unravel – as “crisis and collapse.”

The city council’s decision to move forward with a dissolution hearing follows a request for such from the PDA board during an Aug. 1 special meeting. In a unanimous vote, the PDA board approved asking city council to dissolve the organization, citing financial troubles and unviability of the current management model.

As per city code, the city council is responsible for setting a hearing no sooner than 60 days. At the hearing, the council will deliberate and decide on dissolving the organization.

“We’ve been considering this for a while,” said David King, the PDA board chair. “We’ve run out of options with the current tool,” King said. “It was a hard decision. It’s not something I wanted to do.”

“I think it’s the right business decision and the right decision for the community,” said Celeste Tell, interim executive director of the PDA.

Robert Birman, Centrum’s executive director agreed and said Centrum staff has been deeply involved in discussions.

“Given the financial distress of the current PDA, Centrum supports this decision,” said Birman. Birman serves as a ‘partner liaison’ on the seven-member PDA board.

The PDA board resolution approved on Aug. 1 cites various reasons for seeking dissolution and states that the strategic plan prepared by PROS Consulting in June 2024 “confirmed that the original and evolved business model as structured under the current State Parks lease is not viable.”

Indeed, the report details issues such as undercapitalization of the Lifelong Learning Center, lack of annual resources and taking on capital debt to build non-revenue generating resources which led to the PDA being financially overextended. The report lists the pandemic as the PDA’s death knell.

“For many years, the PDA has not been able to realize the vision of the Lifelong Learning Center, experiencing a series of financial challenges made worse by the COVID-19 pandemic,” said Celeste Tell, interim executive director of the PDA. “In an effort to turn things around, the PDA attempted to distribute liability by refinancing debt into revenue bonds, splitting off the Fort Worden Foundation (FWF), establishing Fort Worden Hospitality (FWH) and entering into long term tenant leases with maintenance, repair and capital responsibilities in lieu of rent. While well intended, this decision further exacerbated the PDA’s financial issues, leaving us without a revenue stream to maintain operational viability.”

At the end of 2023, the report indicates that the PDA had little more than $300,000 cash on hand and about $6.2 million in debt. That debt is connected to a municipal revenue bond that was issued in 2022, which rolled up previous bonds from 2021. Those funds stem from the Maker’s Square project, which repurposed three buildings used during World War I and II into arts and education facilities and the glamping project, which was never finished.

“In January, we kicked off the PROS Consulting Fort Worden Strategic Plan, which was finalized last month,” Tell said. “The plan includes a high-level analysis of past and current operations, partner and community relationships, and identifies future development opportunities. The PROS plan ultimately concluded that after 16 years the Lifelong Learning Center as currently implemented is not economically viable and requires rethinking and restructuring to ensure the future of the Fort Worden experience.”

Tell said it wasn’t yet clear how the issue of $6 million in debt would be resolved.

“We are in ongoing discussions with the bank and have been for many months,” Tell said.

King added that part of the dissolution process would include sorting out those details.

Given the PDA’s current financial predicament and the timing of the state’s two-year budget cycle, Birman said decision makers felt it was best to dissolve the PDA now, then spend the next year and half to two years exploring ways to reinvent a public private partnership at the park. In that time, Birman said, local stakeholders could use the PROS report to prepare a plan for the state’s next budget cycle.

Tell said, as a result of the PROS plan, the PDA formed a working group with the city, state parks, Fort Worden Hospitality and Centrum to chart a way forward.

“The working group quickly identified the need for a three-year bridge plan to realistically work toward implementing the longer-term PROS plan,” Tell said. “As the group was working through multiple scenarios for a three-year plan, it became clear that the PDA’s financial circumstances would prevent it from being an effective partner in any scenario, and that Parks should resume operations of the Lifelong Learning Center at Fort Worden for the near term.”

Despite the setback and the challenges with the existing PDA, Birman said he believes that a public-private partnership remains possible, however it will take careful planning.

“I still think, personally, that it can be done and the PROS report outlines different ways we can try this again,” Birman said.

If dissolution ultimately occurs, the current PDA lease would end and the Washington State Parks and Recreation Commission would resume operating the Lifelong Learning Center at Fort Worden. State officials say they anticipate resuming management by the fall.

After the initial transition, the state parks commission would begin a collaborative planning process in early 2026 to determine what the future of the upper campus at Fort Worden State Park will look like. State parks department officials say the goal is to maintain continuity of operations while the long-term plan is developed.  

For Centrum, Birman said, they’ll return to doing business with the state as they have done for decades.

“We have a 50-year relationship with state parks,” Birman said. “For us, it’s not new terrain. We’ve started conversations (regarding leases) with the state.”

In addition to Centrum, state parks officials say they will work with each of the current tenants to coordinate a transition that minimizes disruption on campus.  Those tenants include: Northwind Art, Peninsula College, Copper Canyon Press, Rainshadow Recording Studio, Port Townsend School of Woodworking, Madrona MindBody Institute and others.

Washington State Parks owns Fort Worden and in 2013 issued a 50-year lease to the PDA to manage and operate the 90-acre upper campus of the park.