State lawmakers’ bipartisan budget includes a last-minute addition that would give six marina owners in Tacoma and the San Juan Islands a break in the rents they pay the state for waterfront.
The temporary change is buried in the 281-page budget bill that became public just after midnight Wednesday and passed hours later during lawmakers’ all-night special session.
It’s a potential six-figure hit to an account that funds state acquisition of waterfront and building of shoreline boardwalks and trails. Rep. Hans Dunshee, a protector of that account who looked into the budget change after The News Tribune asked him about it following the House vote, said it smacks of “cutting a deal for someone.”
The liberal Democrat from Snohomish now plans to ask Gov. Chris Gregoire to veto that section of the budget.
But developers Herb Simon and Ted Johnson, owners of beneficiary Foss Harbor Marina, say their rent is unfairly high and the budget change would move it closer to the better deals that competitors get. (The change also would benefit – to a far lesser degree – Foss Landing, which is owned by the general manager and a co-owner of the Elliott Bay Marina in Seattle.)
Marinas have debated perceived inequities in rents for decades. Some pay hundreds of dollars a year to the state Department of Natural Resources; others pay hundreds of thousands of dollars. Foss Harbor says it pays one of the highest at nearly $200,000 a year. The rent is calculated based on the value of the adjacent property, so rates are higher for Foss Harbor near the downtown museums than for, say, a marina near Browns Point that Johnson said competes for the same customers.
Supporters call this budget move a “pilot project” for two areas where the disparities between neighboring marinas are most stark, Tacoma and the San Juans, and said they hope it will lead to a statewide change. It had to be small to prevent an even larger loss of revenue to DNR, they say.
The only way to expand the concept statewide without such a loss for the state is to lower high rates and raise some low ones. Lawmakers have tried that – most recently, in an effort last year by Tacoma Sen. Debbie Regala and DNR, the agency run by Lands Commissioner Peter Goldmark.
“Every time we try to do this it fails, because the people who are going to have this raised come in and freak out,” said Sen. Kevin Ranker, an Orcas Island Democrat.
So Ranker hit on this new change, with support from other lawmakers including Sen. Derek Kilmer, a Gig Harbor Democrat, and Republican Sens. Randi Becker of Eatonville and Mark Schoesler of Ritzville.
“This doesn’t hurt anybody. It doesn’t raise it for anybody,” Kilmer said.
And it only would last in law for a year. But the idea of it as a model for statewide expansion worries some marina owners with lower rents.
“It’s another way of getting their foot in the door and satisfying the guy that has the squeaky wheel,” said Charles Draper Jr., owner of Salmon Bay Marina in Seattle.
For Draper, that squeaky wheel would be Foss Harbor Marina’s Simon, a University of Washington regent. “I mean, he’s got a lot of money – he’s got a lot more than I’ve got – and he’s got the lobbying power and the people who can push it through.”
Records show Simon has contributed to the campaigns of many Democrats in Olympia – with Gregoire and Kilmer receiving the most on a list that also includes Regala and even Dunshee – while also giving to key Republican leaders and budget writers.
Johnson points out marina rents have been seen as unfair since long before 2001 when he and Simon bought the Foss marina. “We are noisy about it because no one else is pushing on it. Someone has to take the initiative and try to do something about it,” he said. “This is not doing anybody any favors this is an attempt to find solutions to the entire problem.”
Draper and other port owners who would lose out under a statewide equalization say it stands to reason that owners pay more in areas with more expensive real estate. That includes places like downtown Tacoma, said Bill Bradbrook, co-owner of 706-slip Tyee Marina near Browns Point.
Bradbrook has no problem with the state giving Foss Harbor Marina a break, but a statewide leveling such as the one Regala and DNR proposed “comes close to putting us out of business,” Bradbrook says.
That plan would have roughly doubled his rent. Bradbrook said he has to pay rent on a breakwater that brings in no revenue.
The DNR proposal came out of a task-force report and would have lowered lease rates for some – by more than $28,000 for Foss Harbor – while raising them for others. DNR revenue would have been unchanged.
When it failed, lawmakers and Gregoire asked DNR to come up with a new plan, but the agency said it solicited ideas from people with an interest in the issue and didn’t get responses.
So lawmakers tried this new tactic, which hits no one in the pocketbook – except DNR.
“What I was trying to do this year with this budget proviso is put in there a not-so-subtle reminder to the agency that we need to address this problem,” Ranker said.
The change hadn’t been in any previous budget plan. Senate Democrats’ plan, which couldn’t muster the votes to pass the Senate, did call for adoption of Regala’s proposal.
Gregoire told reporters Thursday that she reserved the right to veto anything in the budget she hadn’t agreed to, such as last-minute additions. But doing surgery on budgets can be difficult and risks removing vital pieces.
The budget limits the change to marinas that meet certain public-access requirements and that are in the largest city “within the second most populous county of the state,” Tacoma, and “a county composed entirely of islands and adjacent areas of the mainland to that county.”
Why the circuitous language? The state constitution restricts lawmakers from making special legislation targeted at a single person or business, which lawmakers routinely find ways around.
“It would be (as if) to describe me as ‘legislators over 6 feet, 4 inches with beards between the ages of 57 and 58,’” Dunshee said.