FOR IMMEDIATE RELEASE
August 5, 2005 Contact: John Carter
Port of Bellingham
(360) 676-2500
(360) 739-0337
: John Carter
PORT – IN COOPERATION WITH COUNTY TREASURER – SEEKS LEGAL OPINION
Request for Declaratory Judgment Filed in Skagit County Superior Court
[Bellingham, Wash.] The Port of Bellingham will shortly file papers in Skagit County Superior Court seeking a Declaratory Judgment to resolve tax liability issues between the port and Whatcom County. Both public agencies have attempted to resolve these tax liability issues administratively, but have not been able to reach an agreement on an interpretation of the tax laws.Port Commissioners announced this action following an executive session legal briefing on the matter Thursday afternoon.
The Port has a number of land leases with tenants who have privately owned buildings on the Port property. Occasionally, some tenants fall behind in paying their personal property taxes for these buildings to Whatcom County. These same tenants frequently default in their rent leaving the building on Port property.
The Port contends that it receives title to the building as a result of a default provision in the lease and that the title is free of any tax lien. The Whatcom County Treasurer has taken the position that, when tenants do fall behind in their payments and subsequently default on their leases to the Port, the building is subject to a tax lien,
The Treasurer further contends that the tax lien stops the Port from demolishing the building and that the tax lien remains on the building until the tax is paid. The Port believes that the Treasurer can only get paid from a buyer of the building at statutorily mandated sale. The Port believes that if there is no buyer and the County declines to take ownership of the building, the lien is removed. .
The disagreement of opinion concerning the application of the tax laws was brought into focus because the Treasurer put a tax lien on an abandoned building on Port property in Blaine. This lien has kept the Port from leasing the property or demolishing the building for more than a year. The personal property taxes in question are owed by the former operators of the Harbor Café in Blaine, which went bankrupt in 2004. Rather than seeking payment from the former operators of the Harbor Café or becoming involved in their bankruptcy hearings, the County Treasurer instead put a lien on the building and its contents. With the cooperation of the Port, the Treasurer sold the contents of the building on July 29, 2005. The Treasurer has scheduled a sale of the building for August 12, 2005.
The Port is asking the Superior Court to resolve this matter since it has long-lasting implications to the Port or any other property owner involved in land leasing. The Port and the Treasurer have agreed to delay the sale until this issue is resolved.
Port attorney, Frank Chmelik said, “The Port and the Treasurer’s office have been in discussions for over a year. There is a basic disagreement between the Port and the Treasurer concerning the application of Washington law to this situation. Both parties have agreed that the Port and the Treasurer would benefit from the guidance of the Court on these issues. The Port will cooperate with the Treasurer in bringing this matter before the Court in as quick and efficient manner as possible.”
