Spring 2007Bellingham Waterfront Project Update

A WaterfrontPoised forRedevelopmentBellingham’s community visionof a revived, vibrant waterfrontis moving toward reality.

With 228 acres of downtownwaterfront property poised forredevelopment, Bellingham isabout to embark on a projectthat will benefit the entireregion.

This spring the Port ofBellingham and City ofBellingham are working together to draft a long-range development plan that balances the community’sdesire for new family-wage jobs, new urban housing and improved public access to the waterfront.

During the summer the Port and City will complete an environmental impact statement for theentire project and, based upon what is learned from the EIS, they will complete a master plan anddevelopment agreement.

At the same time, the Port is gearing up to remove decades of contamination from Bellingham Bayand create about 30 acres of new marine habitat. This urban shoreline development will result in a

restored shoreline environment with new nearshore salmonhabitat.

The redevelopment began in 2001 when the Georgia Pacificpulp mill, one of the largest employers in the area, closedits pulp and chemical operations and eliminated hundredsof high paying jobs.

The Port and City led an 18-month community visioningprocess to learn what people wanted this industrial land

to become. The process resulted in a clear direction to preserve marine trades jobs and also redevelopa major portion of the property into a mixed-use urban area with schools, housing, offices, businessesand new opportunities for the city to grow – within its own boundaries.

In 2005 the Port acquired the 137-acres of property from Georgia Pacific, including a contaminated30-acre wastewater treatment lagoon. The Port and City entered into an agreement to jointly plan,permit and develop this property in a manner that keeps the community’s earlier vision at theforefront.

Developing the InfrastructureMost of the 228 acres was used for Georgia Pacific’s pulp, tissue and chemicaloperations. That means this property has none of the roads, sidewalks, utilitiesor amenities people expect in a mixed-use development. As part of theirinterlocal agreement with the Port, the City has agreed to provide most ofthe essential site infrastructure. Depending upon the final development plan,these costs could exceed $190 million over the next 20 years.

While the City anticipates regaining some of those costs through new tax revenue from the site, italso will rely on substantial State and Federal grants to make this development possible. In addition,the Port expects to spend more than $50 million to build a new public marina and boat launch, tocomplete site demolition and to build all marine infrastructure. These costs will be recovered throughuser fees and site development revenue.

Relocating the CollegeWestern Washington University is seen as an importantanchor tenant for this project. Nationwide, universities havea reputation for attracting adjacent private investment andnew business opportunities. Western will rely on state fundingand innovative financing opportunities to cover its cost ofexpanding to the waterfront. The Port and City believe thispublic investment will be multiplied by private investmentand innovation that will come from the desire to locate businesses adjacent to research and educationalopportunities.

State and Federal Support EssentialThe City and Port stand together in pursing this waterfront redevelopment, which we believe willbenefit our entire region. But the costs and risks are high. We rely on continued State and Federalsupport to match with our local public investment to make this project a reality.

Already the Bellingham Waterfront project was chosen as the state’s first LIFT recipient, allowing theCity to regain some of its upcoming infrastructure investment through tax increment financing. Thishas the potential to result in $1 million a year for 25 years.

We also have received State and Federal transportation and infrastructure grants, which are helpingus with the current planning, engineering and demolition projects, as well as with relocation of theBurlington Northern Railway line.

We are grateful to our State and Federal delegations and those who have partnered with them toprovide these grants and loans and look forward to proving in the years to come that this was a goodinvestment for our region.

Experience the SitePlease come and see our waterfront redevelopment project the next time you are in Bellingham Wewelcome the opportunity to take you on a tour. Just let the City or Port know that you are comingand we will show you our progress on taking the waterfront redevelopment from a vision to reality.

Jim Darling Tim DouglasExecutive Director - Port of Bellingham Mayor - City of Bellingham

(360) 676-2500 (360) 676-6979

They combined the new property with other Port and City holdings to ensure that the entire areawas planned at one time. While the planning area is 228 acres, the adjacent property that is affectedby the development of public amenities and economic stimulus is about 400 acres in total.

For Bellingham and Whatcom County, this represents an opportunity unprecedented in the community’shistory. Success is essential because the alternative could be decades of a fenced, contaminated non-productive property in the center of Bellingham’s waterfront.

Consider the PossibilitiesAlthough the master plan isn’t yet written, we already have some early project partners eager to bea piece of this vast redevelopment effort.

Marine Trades Innovation Zone:Today over 800 people in Whatcom County are employed inthe marine trades and these businesses are growing and expandinginto national and international markets. Our marine tradesbusinesses are valued by our community and are looking forroom to grow. We anticipate that our new Marine TradesCenter on this property will result in 250-500 new full-timejobs and will position Bellingham to be a state leader in thisexpanding industry.

Clean Ocean Marina:We are the only waterfront in the country, perhaps theonly one in the nation that is transforming the hugeliability of a contaminated industrial waste lagoon intoa state-of-the-art, environmentally friendly marina forabout 450 boats. We will remove 350,000 cubic yardsof contamination from our waterfront and will developnew shallow marine habitat in and around the marina.This project alone will create about 60 new local jobs.

Western’s Huxley College of the EnvironmentWestern Washington University plans to be one of the anchor tenants for this project, relocating itsHuxley College and several other community and business-oriented programs to the waterfront. Itenvisions creating new lab-to-market opportunities on this site for emerging technologies developedin its environmental and technology programs. In addition to attracting new business investment tothe site, Western’s expansion is projected to add 35 new full-time jobs.

NOAA’s Pacific FleetThe Port of Bellingham is working at a regional and nationallevel to meet NOAA’s needs by providing a new base for NOAA’sPacific Fleet of research vessels. We believe NOAA’s presencewill align with the community’s environmental values, willexpand Huxley’s educational opportunities and will attractadditional private business investment. Our economists estimatethis would add 128 direct jobs, from NOAA alone.

OtherAnother project partner that mirrors our effort to combineenvironmental stewardship with careful economic developmentis the TerrAquarium. Championed by a group of local andnational marine educators and aquarium experts, theTerrAquarium would add a regional destination to our waterfrontproviding education and tourism opportunities. Patterned afterthe Monterey Bay Aquarium, it is likely to add 142 new jobsto our economy.

A New Urban NeighborhoodIn addition to these projects, we envision urban housing being developed to meet all lifestyles andincomes. From condos to apartments, from private developers to housing authorities, we plan to meet

Bellingham’s growing housing needs right in the heart of ourdowntown.

We also plan for many new businesses, offices and shops alongour waterfront. When it is fully developed, about 20 years fromnow, we estimate these mixed uses will add another 700 to 1,000jobs. The construction and cleanup of the site during the next20 years should employ 600 workers annually.

The ChallengesCleaning up the ContaminationBellingham’s waterfront has a rich history of industrial and marine uses. Like any other industrial area,these historic uses have left behind sites with varying levels of contamination on land and in thewater.

The Port of Bellingham will take the lead in cleaning up and mitigating this contamination. But theprice tag is high and the permitting and actual cleanup work will take several years.

Thankfully the state Department ofEcology with its Model Toxic ControlAct fund stands ready to partner withthe Port with essential matchingdollars to help make thiscomprehensive cleanup a reality.

The Port will sign a consent decreethis spring and immediately beginwork on engineering and permittingfor the cleanup.

The Port estimates the cleanup coststo be upwards of $84 million andanticipates recovering its costs fromland sales and leases as the sitedevelops.