The Port of South Whidbey has not yet lost sight of a controversial project that could bring workforce housing to the Whidbey Island Fairgrounds.

During a work session last week, Island County commissioners discussed two grants given to the Port of South Whidbey through the county’s Rural County Economic Development, or RCED, program that are set to expire at the end of 2025.

Executive Director Jim Pivarnik submitted a letter asking for one of the grants, which was awarded in 2022, to be extended by two years. The port spent approximately $39,000 of the $150,000 available, which is for a housing and development feasibility study at the fairgrounds.

The county commissioners unanimously approved the extension during a regular meeting this week.

During the meeting last week, Commissioner Melanie Bacon said she has heard concerns in the community about this project being a slippery slope allowing housing in other parts of the fairgrounds, even though port commissioners have maintained their interest is focused on placing the housing above newly built concession stands.

Pivarnik said the port would need the South Whidbey School District’s partnership if it decides to move forward with that plan, since it owns the nearby property, though he questioned if that was the right location for development.

Commissioner Jill Johnson said she was supportive of the grant extension as long as it’s tied to infrastructure improvements, a component of which may be housing.

On the other hand, Commissioner Janet St. Clair raised concerns about indefinite delays related to the school district’s lack of support and city zoning. Earlier in the meeting, she said it seemed to her there are a number of issues in the economic development investments county commissioners have made that are dependent on the city of Langley making decisions that then get “tied up.”

A few years ago, the city of Langley sent a letter to the county that was supportive of a zoning change at the fairgrounds; port commissioners asked to pause their request for the change in 2024, but decided to resume it earlier this year.

Pivarnik said the port needs to have a better relationship with both the school district and the city. He plans to meet with the school board soon.

The commissioners agreed it would be a good idea to get a progress report at the end of the first year of the extension.

The other grant, awarded in 2018 and totaling $688,000, was for various projects to be completed around the fairgrounds. About $445,000 has been spent so far, but Pivarnik asked for the grant to expire since the port found it didn’t have the financial capacity to continue with the multiple projects that still need to be done because enough matching funds could not be found.

Pivarnik said the port has been “poorly managed” for a lot of years and use of the fairgrounds is currently being reevaluated.

“Right now we’re losing about $100,000 a year in (the) fairgrounds,” he told the commissioners. “It’s not sustainable.”

As part of this, rents are rising for fairgrounds tenants, many of which currently pay less than 30 cents per square foot.

“I would never say we don’t want the county’s money, but I am embarrassed that we’ve mismanaged the project that you’ve awarded us, and I would be happy to come back with a proposal that makes sense,” Pivarnik said.

For example, heating the pole building doesn’t make sense when it’s not insulated, so it’s a grant item that had to be cut, he explained.

Bacon questioned why the port would say goodbye to $243,000 of county dollars while accepting grants from the U.S. Department of Agriculture. Pivarnik responded that the USDA grants are specifically for demolition of old bleachers and bathroom renovations.

Pivarnik said he’d like to continue pursuing three phase power at the fairgrounds for commercial kitchen operations, but that it’s a lot more costly than expected. He’d also like to improve infrastructure for the commercial kitchen to support local businesses, though selling their food at the fairgrounds outside of fair days requires a zoning change from the city of Langley.

Johnson said the county needs to be realistic about a timeline of implementation when awarding grants.

“What is becoming problematic is that we’re getting one-year timelines or two-year timelines, and that’s not achievable in today’s permitting world, and we need to be more upfront about how long it’s going to take to deploy this money,” she said.

The commissioners agreed to let the 2018 grant expire at the end of the year.