PRESENTATION TO BEGIN SHORTLY

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PRESENTATION TO BEGIN SHORTLY
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Working With Private Developers
By Stephen W. Horenstein

• Presented at the WPPA Facilities Engineering
  Seminar

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Washington Port Districts' Authority and Powers

• Port districts are municipal corporations
  governed by Title 53 of the Revised Code of
  Washington.
• State statutes authorize "industrial development"
  and other activity by port districts in Title 53.

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Washington Port Districts' Authority and Powers

• Port district purposes expressly include
  industrial improvements and industrial
  development.
• A port district's general power to condemn and
  acquire property relates to industrial and
  manufacturing activities within the district, as
  well as piers, wharves, docks, harbor
  improvements, freight and transportation
  facilities, passenger traffic, air transfer and
  terminal facilities, and related activities.
• A port district may improve its lands by
  dredging, filling, bulkheading, providing
  waterways or otherwise developing such lands for
  industrial and commercial purposes.

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Washington Port Districts' Authority and Powers

• A port district may lease real and personal
  property owned and controlled by it, for such
  purposes and upon such terms as the port
  commission deems proper. Leases may not be for a
  period of more than fifty years, but options for
  extensions for up to an additional thirty years
  are permitted.
• 5. Within an industrial development district, a
  port district may acquire land by purchase or
  condemnation to make it suitable and available
  for industrial uses and purposes. Properties
  acquired under this authority may be sold,
  subject to covenants ensuring the continuing use
  of the property for the purposes of the
  industrial development district chapter. The sale
  must be in furtherance of the port district's
  plan of harbor improvement or industrial
  development, and the sale may be by competitive
  bid or negotiation.

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Washington Port Districts' Authority and Powers

• A port district may engage in economic
  development programs.
• A port district may construct, improve, maintain
  and operate public park and recreation facilities
  when they are necessary to more fully utilize
  boat landings, harbors, wharves and piers, air,
  land, and water passenger and transfer terminals,
  waterways, and other port facilities authorized
  by law pursuant to the port's comprehensive plan
  of harbor improvements and industrial
  development.
• A port district may sell property of more than
  10,000 in value, after finding that the property
  is no longer needed for district purposes
  pursuant to RCW 53.08.090 and 53.08.091.

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Legal Constraints on Exercise of Authority

• General Constitutional Constraints
• A municipal corporation in the State of
  Washington is prohibited by Article VIII, Section
  7, from engaging in certain public-private
  partnerships for the reasons that the arrangement
  is either (1) an illegal gift of public funds or
  (2) lending of credit to a private party.

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Legal Constraints on Exercise of Authority

• Constitutional Provision Specific to Port
  Districts
• But, another section of the constitution
  (Article VIII, Section 8) expressly provides that
  port districts are governed under another rule.
  This section provides
• The use of public funds by port districts in
  such manner as may be prescribed by the
  legislature for industrial development or trade
  promotion and promotional hosting shall be deemed
  a public use for a public purpose, and shall not
  be deemed a gift within the provisions of section
  7 of this Article.

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Framework for Evaluating a Potential Deal

• Is it within Port's express/implied authority?
• Is it consistent with constitutional limitations
  on authority?

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Other Legal Considerations

• Port Districts' Duties to the Public
• Open Public Meetings, etc.
• Required Public Process and Public Perception
• Management of a Public Asset
• Zoning and Environmental Compliance
• Other agencies' permit authority over proposed
  projects
• Port is a developer for project purposes

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Port's Mindset

• Somewhat bureaucratic/hierarchical in
  decision-making process
• Staff is responsible to an elected body
• Engages in public bidding for most purposes
• Typically has long-term view of even its own
  projects
• Typically somewhat risk-adverse

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Developer/User's Mindset

• Entrepreneurial
• Understands land use permitting but not agency
  processes
• Often has a short-term view
• Time-value of money is important
• Sometimes publicly held with responsibility to
  shareholders
• Does not have deep pockets
• Sometimes flaky

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Pointers for Negotiating with Private Developers

• Port Districts and Developers do not live in the
  same financial world
• Port Districts must be sensitive to interests
  that private developers are not used to
  considering.
• Public Process Required
• There is no "private" in the public-private
  relationship when it comes to process.
• Public perception is also important (compared
  with following the minimum process required by
  state law).

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Pointers for Negotiating with Private Developers

• Don't forget the local jurisdiction with land use
  authority
• There is a difference between dealing with the
  City or County on an agency-to-agency basis and
  coming to the City or County as a developer.
• Choosing a Private Partner
• Need integrity, a track record, sensitivity to
  public agency issues.
• Must wear well in a public setting.

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Pointers for Negotiating with Private Developers

• Choosing a Team
• Have specialized expertise to deal with the
  creative opportunities.
• There should not be a mismatch between the
  developer's team and the port district's team.
• Some Mechanisms for Pursuing Projects
• Development Agreements under Growth Management
  Act
• Port's economic development authority
• Community Renewal Law
• LIFT/tax increment financing

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Questions? Comments? Need Materials?
Stephen W. Horenstein Steve.Horenstein_at_millernash
.com Direct 360.737.1470 Miller Nash LLP 500
East Broadway, Suite 400 Vancouver, Washington
98660