Port of South Whidbey looks to private investor to fund Langley marina expansion

Hungry to continue its expansion of the Langley marina but with little resources to do it, the Port of South Whidbey is now looking at a private/public partnership to fund additional phases of the project.

The port district is hoping to continue expanding South Whidbey Harbor; the next phase would be realigning Dock E (light orange) and adding the outmost section of Dock G. Actual slips would come later.

Hungry to continue its expansion of the Langley marina but with little resources to do it, the Port of South Whidbey is now looking at a private/public partnership to fund additional phases of the project.

The board invited Lighthouse Properties, a regional investment property management firm with holdings in Washington and Montana, to a meeting at China City on Thursday, schmoozing key company leaders with lunch and dazzling them with visions of what could be at South Whidbey Harbor. Though an agreement is far from secure, the luncheon seemed to be a success as the firm’s representatives left enthusiastic about the potential for a deal.

“This is a great spot,” said company president Robin Rosauer, about Langley and the possibilities for expanding the small harbor further.

Port commissioners also left the meeting optimistic that the two groups might hammer out a plan that would serve both group’s interests — Lighthouse Properties making a return on its investment and the port getting one more piece of its long-desired marina expansion completed.

“If nothing else, we’re learning more about marinas,” said Curt Gordon, president of the board, in an interview after the meeting. “But if something works, lets get something going in Langley, something more.”

City and port leaders have for more than 10 years discussed the prospects of an expanded marina, one that would lure boaters from throughout Puget Sound and transform Langley into a marine destination the likes of which might compete with cities such as Port Townsend on the peninsula, La Conner in Skagit County and Friday Harbor on San Juan Island.

In 2008, the port pitched an $8.2 million bond to South Whidbey voters for a 100-slip facility. It flopped and commissioners were forced to downscale their ambitions to a $1.7 million project completed in 2014. It added just 330 feet of dock space.

But the board never gave up it’s desires for a grander marina and the 2014 project was the first phase of the larger vision. The problem is, and always has been, available funding.

The port takes in about $500,000 a year in property taxes, and with its newfound stewardship of the Island County Fairgrounds, temporary though it may be, the district simply doesn’t have the millions needed for the rest of the expansion. Phase 2, which is not certain but envisioned by Gordon as a reorientation of the new dock and the addition of another 220 feet of dock, is loosely priced at $3.5 million.

“Seems awful pricey to me,” said Rosauer, during Thursday’s meeting. “Extraordinarily pricey.”

Flashing a toothy grin, Gordon agreed.

“That’s why we’re talking,” he said.

Lighthouse Properties has experience owning and operating marinas; it currently owns Liberty Bay Marina in Poulsbo, and had another on Lake Union years ago.

Rosauer and Ralph Swanson, the firm’s director of real estate operations, started off the meeting asking about ownership options, noting the need for collateral to finance such an investment with a bank. Gordon and Commissioner Ed Halloran indicated ownership of the existing or a future marina was unlikely, and probably illegal due to grant resources used on the 2014 project.

Commissioner Jack Ng could not attend the meeting so was not present.

Gordon and Halloran were open, however, to potential lease agreements. Under such an arrangement, Lighthouse properties might fund the next phase of expansion in exchange for set operational rights in which the firm would get all or portions of marina revenue as return. Other options might involve lease trades in which existing port assets would be operated by the group, such as the marina, and the port would operate land holdings purchased by the Lighthouse Properties, such as for a parking lot.

“You lease to us, we lease to you and we both get what we want,” Gordon said.

Rosauer addressed issues such as slip size and potential land acquisitions; he preferred slips for large boats as smaller boats can fit into them but not vice versa, and asked about the possibility of purchasing waterfront property from Freeland-based Nichols Brothers Boat Builders for parking. He also asked how firm the port was on design of the facility.

Port officials confirmed that the district just last month got a permit from the U.S. Army Corps. of Engineers for the existing design and build-out, and that there may be some wiggle room for modification. It’s valid for a period of five years.

Poring over a slew of overhead maps and design documents, Halloran expressed confidence that they could come up with a facility layout agreeable to all.

“If we took all of these and hung them up on a wall, then took a clean sheet of paper I’m sure we could sketch something that could work,” he said.

As for parking, all agreed that it will be necessary but Gordon said he recently met with a Nichols official and he was clear that they were not interested in selling. Rosauer said he doesn’t want to give up on the possibility and would like to investigate it futher.

The meeting ended with Rosauer expressing a strong interest in researching the partnership further, and specifically requested additional details, from design dimensions, existing slip fees and other information that will help determine financial feasibility.

In a later interview, Swanson said those details that would be key, as well as the potential for nearby land, which could be developed and serve as a backbone for lending.

“We have to be able to have collateral to finance a project like that,” he said.

He didn’t propose any specific plans, but said a land-based commercial enterprise will likely be needed to supplement and support a thriving marina. Swanson noted that Lighthouse Properties has parking and office space at its Poulsbo marina that it rents out to a range of businesses, from doctors’ offices to retail stores.

Once they receive the additional facility details requested, Swanson estimated it will take a few weeks to get back to the port with an answer.

 

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