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This Memorandum of Understanding is entered into by Kitsap County (“County”) and Olympic Property Group (“OPG”) to identify the guiding principles and actions to be undertaken to evaluate, and implement if feasible, a comprehensive program for public acquisition of up to 7,000 acres of open space and plan for the sustainable development of Port Gamble and its related uplands (“North Kitsap Legacy Partnership”). RECITALS WHEREAS, the Kitsap County Comprehensive Plan and Open Space Plan envisions a coordinated open space network that includes public access to saltwater shorelines, interconnected trail systems, sustainable forestry practices, as well as opportunities for recreation and enhanced protection for wildlife habitat; and WHEREAS, the North Kitsap Trails Association has been established to facilitate the creation of land and water-based trails and kayak routes in North Kitsap; and WHEREAS, OPG controls approximately 8,000 acres of real property within Northern Kitsap County (“OPG Property”). OPG’s property includes the National Historic Landmark District of Port Gamble, approximately three miles of salt water shoreline on Hood Canal and on Port Gamble Bay, and approximately 7,000 acres of commercial timberland that may be suitable for permanent public open space and recreational opportunities, as well as sustainable forestry activities; and WHEREAS, as a public entity, Kitsap County has limited financial resources and is interested in pursuing public/private economic development opportunities that provide jobs and is a viable tax base to support necessary public services; and WHEREAS, Kitsap County recognizes the importance of rural lands and rural character to its economy, its people, and its environment, as well as reducing the inappropriate conversion of undeveloped land into low-density development. WHEREAS, to carry out its mission as a publicly-held company, OPG is actively evaluating conversion to alternative uses or third party sales of its property. OPG’s interests include obtaining a fair risk-adjusted economic return for its owners, determining the long-term future of Port Gamble, and providing certainty for overall use and disposition of the OPG Properties in
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North Kitsap County. Port Gamble is not economically viable in its current state. OPG has made annual subsidies to maintain Port Gamble, such subsidies are not sustainable. Conventional commercial forestry is not economically nor socially viable in Northern Kitsap County; and WHEREAS, Kitsap County has an interest in enhancing the historical character of Port Gamble and by providing a pilot program for rural clustering techniques, consistent with the Growth Management Act, for Port Gamble’s associated uplands. This demonstration shall reduce environmental impacts through improved infrastructure that incorporates sustainable, low-impact development and energy efficiency techniques (water reuse, solar, geothermal, etc), as well as enhancing its economic vitality; and WHEREAS, as the single owner of approximately 8,000 acres of land in North Kitsap County, OPG is in a unique position to partner with the Kitsap County to achieve permanent public benefits, as well as fulfilling its mission of providing an appropriate economic return for its owners; and WHEREAS, Kitsap County and OPG share multiple common interests which could benefit from a public and private cooperative and innovative approach; and WHEREAS, the parties acknowledge a limited window of opportunity exists for Kitsap County and OPG, along with other interested agencies, groups and members of the public, to each secure permanent benefits consistent with their respective interests; and WHEREAS, without these joint efforts, OPG’s land disposition will be driven solely by market forces, which may include sales to third parties or other actions to dispose of its land portfolio in North Kitsap County; and WHEREAS, the process sent forth in this Memorandum will include extensive input from the general public and interested parties with a focus on open space, trails and recreation, shoreline and waterfront access and historic preservation; and WHEREAS, OPG and Kitsap County acknowledge this type of comprehensive, multiple-land planning, as set forth in this Memorandum and to be contained in a proposed development agreement, is an unprecedented new collaborative approach. The parties will use all reasonable efforts to further each party’s interests, but the parties acknowledge there is no guarantee of success. NOW, THEREFORE, Kitsap County and OPG intend this Memorandum of Understanding to identify actions and responsibilities necessary to evaluate and implement an overall plan for OPG lands in North Kitsap County.
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AGREEMENT 1. Overall Goals and Guiding Principles. Currently, the conceptual components of the North Kitsap Legacy Partnership are listed below and illustrated in Exhibit A. However, these components may change for political, environmental, practical, or economic reasons. All acreages below are approximate.
Hansville Block • No development of OPG’s Hansville 2,000-acre block. • Public ownership of the Hansville block. Option and “The Divide” Properties • Create a publicly owned open space and trail corridor from Arness Slough in Kingston to OPG’s Port Gamble block. • 104-acre publicly owned open space through the Arborwood project to the Heritage Park Option property. • Public ownership and no development of the Heritage Park Option Property (366 acres) and OPG’s “Divide” property (664 acres), in addition to the existing Heritage Park acreage (447) Port Gamble (Port Gamble Block, Port Gamble Townsite and Port Gamble Shoreline) • 3,000 acres (+/-) contiguous block in the Port Gamble land block (south of the townsite) in public ownership, no development. • 1.5 miles (+/-) of Port Gamble waterfront (south of the townsite), in public ownership, no development. • Permitting higher densities in and near Port Gamble to offset reduced or no density in Hansville, The Divide, and Port Gamble southern block properties. • Maintain and enhance the historic character and economic sustainability of Port Gamble, including the townsite (120 acres) and the adjacent uplands (1000 acres) • Port Gamble and the associated uplands development to be an economic center that: o Is designed to be as self supporting a community as possible (regarding daily goods and services) o Produces enough public revenues to pay for public services required to support the town o Embraces sustainable development and operating principles to
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the extent feasible Contiguous blocks of open space or forestland will be: • Owned by public or land trust, subject to a conservation easement outlining allowed and prohibited uses • Managed for limited forestry or timber production if desired by public or land trust • Used for connected public access for trails and other recreation • Used to promote and preserve wildlife habitat • Used for limited utility crossings or areas through reserved easements 2. Operating Principles and Public Involvement. Kitsap County and OPG will work collaboratively and in partnership in the development of a public involvement plan, as well as public information materials and presentations. The process will be inclusive with extensive consultation with affected interest groups, other agencies with jurisdiction and members of the general public. Decisions to implement this Memorandum will be transparent through a public process described below. The mutual commitments outlined in this Memorandum entail legislative actions, consistent with Kitsap County Code Title 21, with final determination by the Kitsap County Board of Commissioners. The parties recognize that OPG is a publically held company subject to certain rules and restrictions such as federal securities regulations, other regulations or company policies which will have to be observed through this process. 3. Cooperative Funding Investigation. OPG and the County will explore funding solutions to implement the North Kitsap Legacy Partnership. The parties will explore multiple financing options to acquire the public ownership of OPG properties noted in Section 1 of this Memorandum. Potential funding sources include, but are not limited to, phased sales of conservation easements (including the 1.5 miles of Port Gamble waterfront), public infrastructure funding such as sewer and water facilities, and density bonuses. The parties acknowledge success of the overall North Kitsap Legacy Partnership components will require some level of public funding and a cooperative and coordinated vision among many private, governmental and tribal groups. 4. Process. The County and OPG will convene appropriate meetings to determine the feasibility of completing the North Kitsap Legacy Partnership. This includes the legislative processes and hearings described in Sections 2 and 5 of this Agreement. Also, the parties will meet with other agencies, groups, and/or parties to determine the feasibility of required infrastructure, such as wastewater treatments, stormwater, potable water
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and transportation. This process will include a technical advisory committee discussed in section 5 below The parties also will explore sustainable practices and design, energy efficiency techniques, habitat protection and restoration and enhancement of marine environmental recreation and water quality. 5. Partnership Advisory Committee. The partnership will employ an advisory committee consisting of citizens, the County, state and local agencies, tribes, OPG and other interested parties with technical expertise to bring to the project. This committee will review existing environmental information and provide input to inform the initial development of sub-area details. This input will help the parties develop a preliminary design which will then be reviewed and further refined by the committee. After these refinements have been included, the sub-area design will begin full SEPA review as detailed Section 7.3 below. 6. Proposed Schedule. The parties propose the following schedule, which is subject to adjustment as additional information is obtained regarding funding and feasibility of the North Kitsap Legacy Partnership: Memorandum of Agreement between OPG and Kitsap County approved. May/June 2010 • Partnership Advisory Committee process May – August 2010 • Adopt Title 17 regulations regarding development agreements and Title 21 regulations regarding development agreement processing. July/August 2010 • Adoption of Large On-Site Septic (LOSS) ordinance and repeal of moratorium. July 2010 • Submittal of proposed development agreement, sub-area site plan, allowed densities, and capital facility needs. October 2010 • County SEPA Determination of Significance and EIS Scoping. October 2010 • Adopt County-wide non-motorized plan (trails, etc.). December 2010 • Adopt of Comprehensive Plan language regarding National Historic Towns, their components and candidate sites (such as Port Gamble). December 2010 • Release first draft Sub-Area Plan policies and development regulations. January 2011 Approval of population allocation to Port Gamble Townsite. March 2011 •
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• • •
Release second draft Sub-Area Plan policies and development regulations July/August 2011 EIS Complete. July/August 2011 Adopt of Sub-Area Plan, development regulations and approval of development agreement. December 2011
7. Legislative Actions. Kitsap County and OPG agree to follow the work items/deliverables outlined in this Section. 7.1 Development Agreement. Kitsap County and OPG, through the North Kitsap Legacy Partnership, agree to collaboratively work together on a Development Agreement to address, including but not limited to, the following items: • • Development agreement term of applicability. Cross-reference to concurrently adopted Comprehensive Plan revisions sub-area plan, development regulations and their associated environmental documentation for Port Gamble and its associated uplands that addresses: o National Historic Town Designation as authorized under the Growth Management Act (36.70A.520 RCW). o Rural clustering program. o Capital facilities plan. o Inclusion of low impact development techniques. o Inclusion of water reuse technologies. Agreed upon property valuation methodology of OPG Properties. A schedule and sequence of properties to be transferred to public ownership, as well as definition of public ownership. Agreement regarding appropriate land use activities on properties noted in Section 1 of this Memorandum. Agreement on the sale of such properties while agreement is in effect. Agreed upon low-impact forestry practices. Termination clause and associated conditions for such a termination.
• • • • • •
7.2 Comprehensive Plan/Sub-Area Plan Preparation. Kitsap County and OPG agree that comprehensive plan map and text amendments, as well as the development of a sub-area plan and associated development code are appropriate for the Port Gamble Townsite and its associated uplands (Port Gamble Block and Shoreline properties) and shall be considered by the County. The development agreement, as outlined in Section 6.1, shall address the specific components of the necessary amendments and sub-area plan development. This development agreement will also include evaluation
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of the shoreline designations of Port Gamble Townsite and shoreline in coordination with other County shoreline program revisions processes. 7.3 SEPA. Upon availability of substantial sub-area information, the County will review existing environmental documentation and make a threshold determination under the State Environmental Policy Act (SEPA) on the proposed project components outlined in Sections 6.1 and 6.2 of this memorandum. The Partnership expects an environmental impact statement will be required. OPG shall be responsible to fund the appropriate level of environmental documentation, consistent with Kitsap County Code Title 18. However, Kitsap County shall have ultimate responsibility for the SEPA process. 8. Suspension Period. OPG’s 8,000 acre North Kitsap ownership represents a significant portion of the company’s operating portfolio and source of ongoing revenue. The parties acknowledge that pressure exists between the company’s need to maintain ongoing operating revenue and the Legacy Partnership’s need to keep as much of the land ownership and mature timber available for public acquisition. 8.1 Therefore, between the execution of this agreement and January 1, 2011 (Suspension Period), during which time the transaction feasibility and acquisition targets will be more firmly defined, OPG agrees that: a. The company will not engage in any clear-cut timber harvests in the North Kitsap portfolio, and; b. The company will not market or sell any portion of its 8,000 acre holding with the exception of the approximately 142 acre block which houses the former transplant nursery and the 150 acre Chatham development. 8.2 At least thirty (30) days prior to the termination of the Suspension Period the parties shall meet to discuss the desirability and/or feasibility of extending said period. The company in good faith will consider extending the Suspension Period in the context of its business needs, but the decision to continue to forego or not the company’s timber harvesting, marketing and sales is in the company’s sole discretion.
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DATE: OPG Properties, LLC, a Washington limited liability company Jon Rose, President 19245 Tenth Ave. NE Poulsbo, WA 98370-7456
DATE: KITSAP COUNTY BOARD OF COMMISSIONERS
Josh Brown, Chair Steve Bauer, Commissioner Charlotte Garrido, Commissioner ATTEST: Opal Robertson Clerk of the Board
Approved as to form by the County Prosecutor’s Office
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