The City of Port Townsend bought and imported at significant cost a nearly 70-year old building that had just failed a Canadian hazardous materials inspection. The presence of asbestos and lead in the troubled building has been disclosed only recently as the group behind the “affordable housing” project seeks a State Environmental Protection Act (SEPA) permit, and the projected costs of completing the building’s eight apartments break the $3 million mark.

This and other information that will be reported in upcoming articles came to light in response to another public records request filed by Port Townsend Free Press. Our past reporting has exposed the soaring costs of the project, subsidies hidden from taxpayers and knowledge by the City and project developers that the amount of the City’s loan to complete the project was inadequate from the start.

Cherry Street “Affordable Housing” To Cost More Than $2 Million, May 28, 2018.

The Tragedy of the Cherry Street Project, December 12, 2018.

What’s Happening With The Cherry Street Project?, October 29, 2019.

Asbestos and Lead

In May 2017, the City of Port Townsend purchased a mid-Twentieth Century wooden building that had been standing in Victoria, B.C. That building was later barged across the Strait of Juan de Fuca and settled onto stacks of wood, known as “cribbing,” off Cherry Street in Port Townsend. It sat on those stacks of wood for over two years until the Summer of 2019 when it was finally provided a permanent foundation.

The City gave more than an acre of land, valued at over $600,000, and a quarter of a million dollars to a non-profit group called Homeward Bound Community Land Trust. It was at the time a defunct organization with only one member. The public was told that the cost of rennovating the building and adding four small single bedroom units at ground level would be less than $500,000. Since then the City has loaned the group $834,000 and provided a nearly $500,000 additonal subsidy and other grants and services free of charge. An upcoming report will detail how the projected cost now exceeds $3 million, more than six times the original stated cost.

Because the building had been slated for demolition, a hazardous materials study was conducted in February 2017 by Island EHS of Victoria, B.C. Their investigation found asbestos insulation on pipes and elbows. Asbestos was also found in kitchen flooring. The levels of asbestos concentration significantly exceeded Canadian standards for environmental exposure. Removal of the flooring was deemed “high risk.”

Lead at unsafe levels was found in the interior wall paint and exterior trim.

When Port Townsend Free Press reviewed the City’s records more than a year ago, this hazardous materials report was not in any of the permit or correspondence files. It was turned over to the City only in September 2019 during the process of obtaining a SEPA permit, a necessary step before further work could proceed. Correspondence reviewed by Port Townsend Free Press shows Homeward Bound only disclosing the findings after being informed that its SEPA application must address any hazardous materials in the building. The report was provided in what appears to have been an attempt to assure the city that hazardous materials were not an issue. But upon receipt of the report, a city building official immediately noticed and informed Homeward Bound that the report indicated the presence of asbestos and lead. At that point, the correspondence in the SEPA permit file ended on this issue and it remains unresolved.

Homeward Bound has not responded to any questions posed by Port Townsend Free Press as to how long it has been aware of the presence of hazardous materials in the building and whether it has any plan for dealing with them. They did not answer our question whether the costs of asbestos and lead mitigation or removal are included in the original or latest budgets.

As of now, Homeward Bound has not submitted a complete SEPA permit request. We did not find any applications for other necessary permits to take the project beyond where it is now–an empty building needing major electrical, plumbing, carpentry, and civil engineering work before it is ready to be occupied.

The scope of work submitted by Homeward Bound in its November 12, 2019, presentation to City Council (see video and related documents by clicking here) states that the building will receive all new plumbing, drywall and kitchens. These are the locations where the dangerous levels of asbestos and lead were found. Demolition of those contaminated features will require special procedures and permitting and will be costly. Their scope of work notes asbestos in the subfloor that will be repaired. The submittal to City Council does not mention that the pipes and elbows to be replaced are all encased in asbestos.

Unsafe Conditions Within

The public has repeatedly been assured that, despite its age, the building is in excellent shape.

Those statements have been misleading, if not false.

During the first week of August 2019, city building official Angela Garcia and Assistant Fire Chief Brian Tracer entered the building and gained access to the upper floors via a ladder they found on site. She reported, according to an email in the City’s files:

“[W]e observed multiple hazardous conditions such as holes in walls and floors large enough for a person to fall into.”

Garcia requested that measures be taken to safeguard the building from unauthorized entry to protect anyone who may wander inside.

Three days after receiving Garcia’s request, Homeward Bound on its Facebook page posted photographs of its Board members putting up plywood sheets across the openings on the ground level. Homeward Bound stated this was being done “because our insurance company needed assurance that it wouldn’t be damaged while we carry on to Phase 2.” No mention was made of the City’s request.

Homeward Bound in its latest presentation to Council stated that it will have to replace floors, all electrical systems, all plumbing, all windows and all drywall–in contradiction to previous representations regarding the building’s condition.

Growing Problems with Neighbors

We have previously reported about problems being caused for the homeowner who lives in front of the building. She told us that Homeward Bound’s plans block her driveway. The SEPA permit file also reveals increasing concerns by Grace Lutheran Church, which has been a supporter of the project since inception.

A two-page, single-spaced letter from Pastor Coe Hutchinson dated September 17, 2019, details multiple inaccuracies in the SEPA application (e.g., getting the grade of slope wrong, pointing out that the planned exterior wheelchair ramp could not be going to the third floor and could not possibly be at a 12% slope). He also raised concerns about erosion that started when the building was moved in and much of the area scraped and excavated. “Water is running off Cass St. and down through the area used for parking by GLC. The runoff is not going into the current catch basin in the Cass St. right-of-way,” he wrote.

Those concerns have not been addressed in the past months. This author upon a recent visit observed the erosion damage from almost three years of failure to appropriately channel runoff.

Pastor Coe also raised concerns with what appears to be inadequate access to the building once it is occupied, including the possibility that a proposed gravel roadway from Cherry Street up the hill would  not handle all the building’s anticipated traffic, as well as use by GLC. (The alternative is paving, another considerable expense which does not appear to have been included in existing cost estimates, already grossly inaccurate. Homeward Bound, in its presentation to Council, was hesitant to include “street work” in its latest $1.83 construction estimate. More on that in an upcoming report).

Lastly, Pastor Coe shares that GLC is now facing a “parking dilemma.” Homeward Bound’s plans pose the possibility that they will lose parking they have been using for the past 50 years. This is a similar concern to that raised by the neighbor, mentioned above.

How serious are the issues raised by Grace Lutheran Church in its comments on the SEPA application?

Correspondence from Homeward Bound’s consultants in the city’s files shows an acknowledgment that conflicts with the neighboring church, including an unresolved water line issue, may hold up project permits. The SEPA permit application had been scheduled to be delivered by October 17, 2019. It has not yet been submitted.

A Long Way to Go

In its November 20, 2019, article on the soaring costs of the Cherry Street project, the Port Townsend and Jefferson County Leader reported that the project was “75% complete.” Just the fact that the project lacks at least $1 million with no source of additional funding in sight, should have been enough for the reporter to know this statement was false. But the reporter more likely misunderstood what was said by Paul Rice, Vice President of the Board of Trustees of Homeward Bound, in his November 12 presentation to the City Council. He stated that Homeward Bound was “75% of the way to permitting.”

The files reviewed by Port Townsend Free Press found nothing to substantiate that claim. Indeed, it appears Homeward Bound is already off its own timeline for permit application.

It is no wonder this has been and will continue to remain a troubled project, with no foreseeable upward limit on the taxpayer investment. It is now clear that the City purchased this building blindly, without inspection or a professional estimate of what it would cost to make the old structure up-to-code and habitable.  For years, both the City and Homeward Bound have known this project would cost far more than they had been telling the public or The Leader and the Peninsula Daily News.

Homeward Bound is headed for default on its loan from the City. It was granted a two-year grace period at the start of its forty-year loan term during which time it would not be required to make any principal or interest payments. That grace period expires in July 2020. Homeward Bound has not only indicated that it will be unable to make its first payment, but will be back to ask the City Council for $1 million or more in additional funding.

The public may be surprised because they have not been told the truth. But neither City leaders nor Homeward Bound trustees can claim to being caught unawares at this turn of events. They’ve long known this project was in trouble.

City files contain a printout of an email from Monica Bell, a former Homeward Bound Trustee, to her fellow Trustees, all members of City Council and other persons in the homeless services and affordable housing communities. She questioned the “deal” between the city and Homeward Bound and wrote that the person then serving as project manager, the person in the best position to know what lay ahead, had called the numbers then being given for the project’s cost “rushed, slapped together” and “completely bogus.”

Only now are taxpayers learning how true those words are.