Cheney foundation faces hurdles in its attempt to develop downtown Gig Harbor

Whether a forested tract of land at a busy corner in downtown Gig Harbor is developed into multiple high-end rental housing units hinges on the actions of the City Council — and great blue herons, if they come back to the site to nest next month.

  

The Ben B. Cheney Foundation submitted its land development application to the city at the end of December. It wants to clear the property and add 10 buildings with 35 high-end rental townhouse units with attached garages and parking to the site. It also wants to build three single-family homes on the waterfront across Harborview Drive.

Included on the combined 2.27-acre site would be a small public park at the corner and a public viewing platform midway up the property on Soundview Drive. Revenue from the rental units would generate income for the foundation’s charitable giving.

As proposed, the project isn’t compatible with city zoning regulations. That’s why the foundation asked the City Council to enter into a development agreement that would allow the project to move forward in exchange for a piece of waterfront property with a historic agricultural building, deck and marina. The city has entered similar agreements, including in north Gig Harbor for the Harbor Hill community.

But before the council can act on the Cheney foundation’s request, it has to decide how to proceed with an application submitted by a resident looking to derail the development.

Jeffrey Katke lives next to the forested land. He said he believes the city’s development agreement process violates state law.

He filed an application Nov. 1 that would prevent the Cheney Foundation from using the development agreement process in the way it hopes.

Katke says he has it on good authority that the city is using development agreements illegally: He’s being advised by Carol Morris, the city’s attorney for 14 years until 2008.

State law stipulates a development agreement can’t supersede city law, Katke said. That means the city can’t use these agreements to sidestep its zoning, he said.

But Gig Harbor code says the mayor and City Council can approve these development agreements to do just that, Morris said.

“The whole point of having development regulations is that everyone has to comply with them, right? And everyone knows what they are,” Morris said. “What Gig Harbor code allows is a developer to come in and change that,” through a development agreement.

The city’s legal team is reviewing the claims and expects to offer its analysis at a City Council meeting next month, planning director Jennifer Kester said. Katke is the first to challenge the city’s development agreement process, she said.

Katke proposes restoring the city’s development agreement to its 1999 state, when Morris wrote it into the code. That change would remove amendments from 2009 and 2013 that allow developers to deviate from zoning, public works and other development standards with an agreement if certain criteria are met.

This deviation is only allowed in north Gig Harbor’s Harbor Hill neighborhood and downtown where the Cheney Foundation wants to build.

The City Council amended its development agreement process in 2009. At the time, the change was only applicable in its planned community development zone, which is the Harbor Hill master planned community.

Developer Olympic Property Group requested and received the option to deviate from zoning in Harbor Hill twice, most recently in the high-density Heron’s Key senior living project under construction.

It also has a pending request with the city for another such agreement to build its Village at Harbor Hill — the last commercial area of Harbor Hill to be developed.

Katke’s request would affect those plans.

The City Council amended its code in 2013 to allow the expanded development agreement options downtown in an effort to spur development, Kester said.

Tacoma developer Michael Hickey, principal of Neil Walter Co., said the option for a development agreement is the reason the Cheney Foundation pursued the land downtown. Hickey is working with the foundation to develop the site.

The Haub family, which has longtime ties to the Gig Harbor and Tacoma areas, owns the site. German grocery store magnate Erivan Haub amassed the Gig Harbor land over the years with the intent to one day develop it, Hickey said.

That never happened, but Haub has a vision for downtown. He sought other families with local ties to buy the land and conditioned its sale on the land being developed collectively, Hickey said.

“He wanted to make sure whoever bought it would follow his dream,” Hickey said.

The foundation’s application is scheduled for council review Feb. 27. But the City Council might effectively decide its fate two weeks earlier, on Feb. 13, when it decides whether to act on Katke’s petition.

If the council agrees with him, the Cheney Foundation’s project cannot proceed. Current zoning would allow 10 homes on the forested land and fives homes between the waterfront parcels, Hickey said. If the foundation can’t develop the land as proposed, there is no incentive to proceed, he said.

Another option to achieve the higher density under city code is to request a zoning change, but Hickey wouldn’t commit to whether that is something the foundation would pursue.

“We feel strongly that a rezone is not necessary for this property and that the City Council will uphold their development agreement process,” he said in an emailed statement.

Even if the council denies Katke’s request and approves the Cheney development agreement next month, the project faces yet another hurdle: The nesting habits of great blue herons that have historically used the corner lot to rear their young.

The state designated the site as a nesting area for the birds. At least eight heron nests were identified on the wooded lot, with two other potential nests spotted.

The great blue heron is listed as a “state monitored species,” which means the state Department of Fish and Wildlife monitors the birds and manages their populations to prevent them from becoming endangered, threatened or sensitive.

Wildlife officials agreed to monitor the site through April to see if the birds return. If they don’t, the state will consider the site inactive, leaving management to the property owner’s discretion.

If the birds return, foundation leaders will regroup and decide how to proceed, Hickey said. The purchase agreement for the land makes the sale contingent on a resolution of the heron issue.

This story was originally published January 19, 2017 at 9:00 AM with the headline "Cheney foundation faces hurdles in its attempt to develop downtown Gig Harbor."