The board of the Fort Worden Public Development Authority (PDA) put an aggressive timetable for dissolution in place on Aug. 27, saying money for operations has run out and it is essential it be shut down in an orderly fashion.

The official vote approved a timetable of tasks to be accomplished before the board and its staff turn off the lights and lock the doors for the last time. It won’t become effective, however, until the Port Townsend City Council votes to approve dissolution, which is expected to come following a public hearing on Oct. 7.

“There is not enough oxygen in the tank to continue on,” said David King, board president for the PDA, said at the meeting.

“There is not enough oxygen in the tank to continue on,” said David King, board president for the PDA, said at the meeting.

“This is the most dire we’ve been,” said Celeste Tell, PDA’s interim executive director, adding that as each week passes, it becomes ever more difficult to pay bills and make payroll. PDA staff said by Oct. 7, the organization will not be able to pay its bills or meet payroll.

While the PDA’s financial condition may be ‘dire,’ as Tell described, the tasks outlined by the board in the timetable are part of an orderly exit and transition of Fort Worden operations back to the Washington State Parks and Recreation Commission.

“Our primary goal is as smooth and clean of a transition as we can possibly make,” said Tell.

The items to be completed include data sharing agreements with the State Parks and the City of Port Townsend, final notices to tenants and vendors, collection of final tenant invoices, finalization of PDA accounts payable and other financial matters, tenant meetings, and a public open house slated for the week of Sept. 23.

“There is a lot baked into each one of these steps, and it develops every day,” Tell said. “Everything right now is on a day-to-day basis.”

During the Aug. 27 discussion, PDA board members also talked about the timing of their resignations, with King stating he plans to resign on Oct. 7, before the city council hearing.

“For me, the critical day is Oct. 7,” he said. “I want to be done on the date of dissolution.”

King recommended that his fellow board members do the same. King said his intent was to send a message to city council that the PDA boards wants dissolution and there won’t be a board with an “open ended tenure” left to sort things out should city council delay their decision, or if other matters become protracted.

“I want this to be a bit of a forcing function,” said board member Brad Mace. “I want to make sure there isn’t an easy solution to drag this out.”

“The morning of Oct. 8 there will be no staff,” Tell said, adding that attempting to continue beyond Oct. 7 was “a financial luxury we don’t have.”

Board member and city council member Libby Urner Wennstrom cautioned her fellow board members against an early exit, suggesting it might be better for them to stay on until after the hearing in the case that the council doesn’t dissolve the board or a board quorum is needed to settle certain matters.

King said if extenuating circumstances arise between now and Oct. 7, he might reconsider his decision.

The city council’s decision to schedule the Oct. 7 dissolution hearing follows the PDA board’s request 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 the lack of viability of the current management model.

The Port Townsend City Council voted Aug. 5 to schedule the 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.

City staff and council members said their approval to hold the hearing 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.”

“We’ve been considering this for a while,” King said. “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,” Tell said.

The request for dissolution follows years of financial struggles.

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.”

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 Tell.

She said in the 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 PDA had little more than $300,000 cash on hand and about $6.2 million in debt, according to the report. 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.

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.”

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

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.”

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.  

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.  

The public hearing for PDA dissolution is scheduled for 6 p.m. Oct. 7 on the second floor of Port Townsend City Hall, 540 Water St., in council chambers.

City Council meetings also are broadcast via Zoom, or participants may listen by telephone. Information for accessing the meeting will be posted in the council meeting agenda several days before the meeting at cityofpt.us/citycouncil/page/agendasminutesvideos. Zoom and phone participants are permitted to give public comments.