Transforming a 220-acre heavy industrial site into an inviting mixed-use neighborhood is an expensive undertaking. During the Master Planning process in 2008, the Port and City will define the needed infrastructure and early investment needed to launch this 20 to 30-year project. As those decisions are made, actual costs and timing of investments will become more clear.
On October 7, 2008 at the citizen-led Waterfront Advisory Group meeting the Port released the Preliminary draft Cost Comparison of the Rotated Street Grid and the Straight Street Grid. To view the Cost Comparison update, click here.
In June 2008, the Port Commission met and received an update and a formal redevelopment Proposal that could be used as a preferred alternative in the environmental analysis for this 20 to 30 year project. The Proposal includes recommendations to questions raised during public comment and agency review of the Draft Environmental Impact Statement about development density, road and trail alignment, phasing of the development and establishing a sustainable development strategy.
Late in 2006, the Port and City prepared some cost estimates based upon the Draft Framework Plan and early projections of key infrastructure needs. A summary of the preliminary analysis can be found here.
In the 2006 analysis, the Port and City estimates they would make an investment in 2006 dollars of more than $335 million over 20 years. The Port and City have explored sources for those funds that primarily depend on revenues generated from the incremental increased value of the development, while not creating any long-term dependence on either the City's or the Port's the general tax base.
The Port and City are building long-term financing models that will utilize short and long-term debt to bridge gaps between urban investment costs to stimulate development and long-term revenues. These investments will stimulate substantial investment by the private sector. The governments also are working together to create phasing plans for the development so that they can anticipate when spending is needed for each phase.
In an interlocal agreement, The City of Bellingham has committed to construct necessary public infrastructure on the site and create a regulatory framework that attracts private investment. In that same agreement, the Port of Bellingham has committed to undertake the cleanup of the property in its ownership and in the Whatcom Waterway, to build all marine infrastructure and to provide the City at no cost with the land for parks, public space and rights of way.
The financial modeling conducted during the summer of 2006 required that some land-use assumptions were made about the density and timing of development. Here are some of the financial modeling assumptions:
• Total Project Area: 220 Acres
• Parks: 31 acres
• Streets and Public Right of Way: 32 acres
• Housing: 3,000 units
• New Building Construction and Brick Building Re-use: 5.9 million square feet
• Residents: 5,700
It also projected the development would occur over 20-30 years. Actual land-use decisions about density and development will occur during the Master Planning process. The economic model numbers are simply a set of shared assumptions that allowed the Port and City to project their costs and revenues.
To ensure the City and Port financial modeling during the summer of 2006 was based upon the same understanding, both governments agreed to show the costs and revenues in 2006 dollars. Of course, in reality, future inflation will likely increase those costs and revenues. Both governments also agreed to show what they anticipated were the actual costs, without adding in the extra costs of borrowing money, using bonds or other long-term financing options. Keeping the model more simplified allowed the Port and City to gain a better "big picture" understanding of the costs and revenues from this project.
Completing the preliminary financial modeling also required that the Port and City make some assumptions about how much of the property would be kept in public ownership and how much would be sold to the private sector. The Port and City are committed to keeping the shoreline areas in public ownership, whether it is being used for parks and trails or water-dependent businesses. Recognizing the Port, the City, Western Washington University, the Bellingham-Whatcom Housing Authority and the TerrAquarium as public uses, approximately 151 acres or 68 percent of the 220-acre site will remain in public ownership in this economic model.
