Three boaters get set to head out into Saratoga Passage from the Langley marina. State officials this week raised concerns about the city
Three boaters get set to head out into Saratoga Passage from the Langley marina. State officials this week raised concerns about the city's transfer of the property to the Port of South Whidbey.
— image credit: Brian Kelly

LANGLEY — Officials from the state Auditor’s Office have scuttled the sale of the Langley marina to the Port of South Whidbey.

State officials said Tuesday the city did not receive enough compensation from the port when they agreed to transfer the Langley marina to the port. As such, the contract covering the transfer of the property violates state law.

“It doesn’t meet their test,” City Administrator Walt Blackford told the city council Wednesday.

A letter from Jan Jutte, director of legal affairs at the Auditor’s Office, that outlined the auditor’s opinion arrived at city hall on Wednesday afternoon.

Jutte wrote that when two government entities transfer property, the side that gives up the property “shall be paid for its true and full value.”

Langley agreed to give the marina to the port in April, after five months of sometimes testy talks.

The city and port hotly debated the compensation issue for weeks. Langley said the marina property was worth $1.4 million, but port officials said it had no value because it would be too expensive for a private developer to comply with the regulations applicable to the land. Port officials also said they should be given credit for the money that would be spent to improve the marina in future years.

State officials disagreed with the port’s position.

“While it may be true that the regulations limiting development of the property would affect the property’s value, that does not mean the property has no value,” Jutte wrote.

“The city must receive consideration from the port, which could be money, services, other property or ‘relief from a burden,’” Jutte continued. “The improvements the port is committed to make to the harbor, while beneficial to the public, do not appear to be improvements the city is required to make.”

Councilman Robert Gilman had said in early March the value of the marina was about $1.4 million, while port commissioners said the amount of repairs needed at the marina would offset the potential value of the property.

At the time, Gilman stressed his concerns were “not about the money.” He repeatedly said the property had a value and that state law required compensation.

However, during final reviews of the contract between the city and the port, the compensation paragraph was deleted from the document and the city agreed to give up the marina without money changing hands.

According to the sale agreement, the city will continue to run the marina until January 2009, and will keep the revenue generated from the small boat harbor over that time span. Then the port will take over, but Langley will keep its right-of-way on Wharf Street.

City officials said this week that they remain committed to transferring the property.

“Don’t think that ends the process, it’s just a little hiccup,” Blackford told the city council.

“The city remains committed to make this work,” said Councilwoman Rene Neff.

The auditor’s opinion sends the parties back to the drawing board, however.

Mayor Neil Colburn said the city doesn’t have answers yet.

“I don’t know what the solution will be,” Colburn said.

Port officials said later they believe a new agreement with the city will be reached.

“I was greatly disappointed with the state’s decision,” commissioner Lynae Slinden.

Port Commissioner Geoff Tapert said the problem may be resolved by talking with officials again from the state Auditor’s Office.

“From what I read, the fundamental issue is we didn’t discuss the issue of value,” Tapert said.

“That is incorrect. Value was discussed ad nauseam about what we are offering and the city agreed,” he said.

“It’s clear we need to educate the auditor about the entire process and I personally believe we’ll end up with a valid agreement,” Tapert added.

Mindy Chambers, spokeswoman for the state Auditor’s Office, said the issue will likely be resolved.

“We can get to a good place on this,” she said.

Chambers said the state auditor is concerned that the agreement states there is no value to the marina.

“That’s just impossible,” she said. “Both parties need to lay it out for us specifically as to the port’s legal and financial obligations.”

Chambers said more information and documentation is needed before the state reverses course.

“We usually hit some bumps in the road in these situations that need to be worked out,” she said. “Our interest is to approve an agreement that protects and benefits everybody.”

Councilman Paul Samuelson, who had been the chief negotiator for the city on the deal, said Thursday that getting the auditor’s input was not a bad thing, because it makes sure the deal is good and legal in the long run.

“We have a 1 1/2 years till the transfer will occur. We have some time to find a creative solution,” Samuelson said.

“The city doesn’t need the money. The port doesn’t have the money or doesn’t want to spend the money. I really think we need to get back together and talk. It needs to be sorted out,” he added.

No new negotiations have been scheduled between the city and port.

“I’m still trying to reach the person who wrote the letter to ask for clarification and advice on how to perfect the agreement,” Blackford said.

Reporter Jeff VanDerford contributed to this story.

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