The city of Gig Harbor is in possession of the Masonic Lodge, located at 3025 96th Street NW, sandwiched between the baseball and sand volleyball fields and BMX tracks at Crescent Creek Park.
Purchased for $665,000 — constituting a $15,000 reduction in price to offset the cost of the city’s removal of a non-working oil tank — the acquisition of the building and the 1.10 acres of land it sits on means the city can now craft a master plan for Crescent Creek, representing a $50,000 line item in the city’s 2017-2018 budget.
But now, Gig Harbor City Council member Michael Perrow is crying foul.
At the Sept. 25 City Council meeting, Perrow claimed the Council was not given the opportunity to publicly and formally approve ratification of the sale and acquisition agreement, and that it was not clear whether there was contamination in the soil as a result of the oil tanker discovered on the property by Aspect Consulting.
Council members debated the semantics of what constituted an approval.
Perrow successfully lobbied three Council members to his side in a 4-2 vote to approve delaying the ratification of the agreement.
He also introduced a motion to request the city administrator deliver to Council a detailed outline of the events that took place, including all related documents, proposed steps that prevent the mistake from happening again, and an environmental remediation work plan to address the contamination.
Perrow requested this be presented to Council at the Oct. 9 meeting before a vote to ratify. The motion carried, 4-2.
City Attorney Angela Summerfield made clear to Council that the city now legally owns the Masonic Lodge.
“The city did have a valid contract in July,” Summerfield said. “This (ratification) just closes the loop on it.”
Mayor Jill Guernsey urged Council to approve ratification.
“We own the property, and tonight is the night that ratification would be appropriate,” Guernsey said.
Perrow accused Guernsey and City Administrator Ron Williams of creating the matter. He said the two, although not acting nefariously, decided to not follow the directives of the City Council back on July 10.
Guernsey said that in her defense she was not present at the July 10 meeting and in executive sessions where many of the decisions were made.
Guernsey recused herself on voting on a tie because “her ethics and personal character” were attacked. She also took great offense at being called unethical.
Council members Steve Ekberg and Tim Payne agreed that the intent was there by Council on approving the agreement, but formal action was never made. Ekberg and Payne voted with Perrow, along with Councilman Ken Malich, against ratifying the agreement.
Council member Rahna Lovrovich supported the mayor, voting for ratification.
“After having gone through our executive sessions, I came out with the full understanding that this Council intended to purchase the Masonic property,” she said. “As the mayor stated, she was not in town, and as mayor pro tem, I signed the majority of those documents. And had I for one second felt that we were not doing something that the majority of Council wanted, I think I would have asked some questions at that point.
“Yes, I think as Council member Ekberg stated, we may have overlooked a step, and I’m hoping we can fix that tonight.”
Final approval was given by Council on July 10, Williams said.
“I have counted three Council meetings along the way that City Council has approved offers and counter offers,” Williams said in a phone interview Monday. “It was the City Council that gave initial authorization for pursuing purchase of the property on April 24.”
Williams said ratification is not a legally significant contract element.
Ratification was brought forward to the Sept. 25 Council meeting, Williams said, to appease Perrow’s concerns. In Williams’ mind, ratification is a moot point since the purchase and sale agreement is already legally binding. Williams said that once a legal contract was in place, staff reported this to Council.
“No concern (by Council) was made (then),” Williams said.
Two residents during public comment questioned why there was not an appraisal done on the property. One resident claimed the property value was assessed at approximately $240,000. He questioned why the city paid $665,000.
Williams said because the city paid for the property in cash, and no bank was involved, an appraisal was not required.
Because the land consists of a flat topography, is already served by city sewer, and borders a park, residential, and is close to the waterfront, the value of the land is more in the range of $700,000 to $1 million, he said.
“The amount of money we were offering was well within the range — and quite below the range — of what the property would get on the open market,” Williams explained. “Both realtors and Council members (experienced in real estate) said we were getting a good deal.”
Phase 2 of the environmental impact assessment performed by Aspect Consulting found no contamination resulting from the non-working oil tank. According to the Phase 2 report, a sub-slab soil vapor sampling found that “vapor intrusion does not pose a risk to human health under current site conditions and planned tenant use at the property.”
Although the environmental impact assessment ensured the safety of the children at the Gig Harbor Preschool Co-op, which rents a space inside the property, in a Facebook post on Sept. 20 Perrow raised concerns about the condition of the soil at the site.
“While there is no indication the tank has or is leaking, there is no way to know it has not,” he wrote. “The final unapproved agreement provided a reduction of $14,000 off the sale price in consideration for decommissioning and/or removal of the tank, but the actual costs could be exponentially higher should there be underground contamination.”
Parks Project Administrator Katrina Knutson said removal of the non-working oil tank will occur within the next 30 days.