Oak Harbor to proceed with Fakkema Access Road project – for now

— Created December 22, 2021 by Kathy Reed

By Kathy Reed

Oak Harbor City Council members have approved a one-year contract extension for an engineering plan for the Fakkema Access Road project. 

The Dec. 14 vote was a procedural one for the extension of the professional services agreement for engineering and design for the project with Harmsen LLC, not on the final road project. The funding and cost of the Fakkema Access Road have been called into question by Whidbey Weekly publisher/owner Eric Marshall, who is also a member of the Oak Harbor Planning Commission.

The city council had delayed the vote for a week, after Marshall appeared before the council Dec. 7 to ask why the city is spending $481,500 to build an access road along the east side of its property at State Route 20 and Fakkema Road. The road will provide access to the developer of an adjacent parcel of land, which is owned by Amerco Real Estate, and where work is currently underway to build a U-Haul rental and storage facility. 

But the issue is more complicated than accessing an adjoining parcel of land, according to Marshall, who was appointed to the Planning Commission in 2020.

“I first learned of the Fakkema Road project prior to the Oct. 27, 2020, Planning Commission meeting,” he said. “It was listed as a line item on the Capital Improvements Plan (CIP) in our packet. I questioned it during the meeting and was told the road was going to provide access to a privately owned, for-profit business. I questioned how much of the $481,000 price tag was being passed onto the business owner and the answer received was ‘zero.’  At that point the project was slated for 2022.

“I have called Oak Harbor home since 1980,” Marshall continued. “I know the property in question and its history. It struck me as odd that the city would be spending nearly a half million dollars to put in an access road to nothing. I wondered, ‘What needs to be accessed?'”  

“The Fakkema Access Road project proposes to construct a new public road to improve the accessibility and development potential of 53 acres at the north edge of the City,” Sabrina Combs, Communications/IT Manger for the city, told Whidbey Weekly via email last spring. “This road was identified as a future road in the City of Oak Harbor’s 2016 Transportation Comprehensive Plan. 

“The U-Haul development submitted a pre-application to the City November 2018 and a formal application September 2020,” she continued. “This development is proposed over several of these parcels. Local residents and all SR20 users will benefit from the safety improvements resulting from the construction of the Fakkema Access Road. Multiple parcels and property owners will benefit from a development potential with the construction of this road.”

In 2016, at the time the road was identified in the comprehensive plan, the affected area included 11 parcels of land, four of which are owned by the city and are home to what will eventually be developed, according to the city, into Centennial Oak Grove park. 

It is unclear how many people owned the remaining seven parcels at the time the project was proposed. Today, however, five of those seven parcels are owned by 20 Oak Harbor LLC, one is owned my Amerco Real Estate and one remains privately owned.

“20 Oak Harbor LLC and Amerco Real Estate are all the same company, essentially,” Marshall told the council. “They have the same governors, they are out of Arizona. Amerco is a publicly traded company on NASDAQ; it was founded in 1945, it has over 22,000 employees, it reports over $755 million in sales. Their CEO and one of their principal governors, Edward Shoen, is worth at least $7.86 billion as of 15 June, 2021. He owns over 81,000 units of Amerco stock, worth over $6 billion.

“Of those pieces of property out there, we are going to build an access road for a multi-billion dollar company,” he continued. “They don’t need our money, they don’t need that road – if they want that road, they can build it themselves.” 

While city council members were not familiar with the parcels’ ownership, they were familiar with the project and its cost. But further discussion at the Dec. 7 meeting revealed the price tag for the project had increased significantly.

“So the current budget we have is $701,000,” said David Goldman, the city’s finance director. “It’s been updated since the Capital Improvements Plan was published last year, so I think there was a budget amendment earlier this year that upped the budget. The funding sources include [transportation] impact fees, funding from the streets fund and a small amount from city funds, but the majority of the funding is coming from transportation impact fees.”

Council members also questioned whether it is unusual to have a developer bear at least part of the cost of road construction.

“Where is the line between the city requiring the developer to pay for this stuff that benefits them and their business and to us to get help?” asked Mayor Pro Tem Beth Munns. “It just seems like we’re missing the boat if they’re not being charged to help develop this.”

“I think the impetus on this thing was the economic development; normally we would require this,  said Project Engineer Brett Arvidson. “This road is considered very minimal. Matter of fact , we’ve had discussions with the developer about making it bigger and more accessible for the trucks and we said we’ll be glad to do more for you ,but you’re going to have to pay for the upgrade because this is not a fancy street by any shape or form. So to me, the issue was yeah, we were trying to promote development in the area and we’re making that investment. I wasn’t party to the decision to move it forward  on a policy basis, but yeah [cost is] normally born by the developer.”

Whidbey Weekly did reach out to U-Haul via email for comment, but has not received a response.

When the project was first introduced in 2016, it was anticipated the city could get grant funding from Island County .09 Funds in the form of a Rural Economic Development Grant. The city applied for the grant in 2019, but it was not approved by Island County commissioners, who said the proposed development didn’t provide enough jobs.

Council members decided to postpone action on the issue for one week and took up discussion on the Fakkema Access Road once more at their Dec. 14 meeting.

Staff went over the history of the parcels for council, telling them three developers had shown interest in the property between 2016 and 2018, but had decided cost of road construction was prohibitive. The land falls within the U.S. Navy’s Accident Potential Zone (APZ) as well, which limits its development to low density, commercial endeavors.

City staff told council members the road was not just necessary for economic development to the area, but because it is a matter of safety; the Washington Department of Transportation prohibits direct access to Highway 20 from the parcels in question.

“The road is a safety enhancement to eliminate the need for adjacent properties to go directly to Highway 20,” said David Kuhl, Oak Harbor development director. “We wanted to provide access to the city-owned land for the park, which are four parcels. And so rather than come off of 20, come off a back road we’re proposing and so you’re not going to have traffic conflicts coming off of Highway 20. 

“Same issue with address to public safety need for coming off Highway 20 for this particular parcel that U-Haul is proposing,” he continued. “It’s right there on Highway 20 at a high speed section. It’s 50 miles an hour through that area, also there’s limited sight distance. If you’ve gone out there it’s really kind of a tricky area to see around. There’s a lot of high conflict things happening out there with the merge lane and a deceleration lane, an acceleration lane, passing lanes, so there’s a lot of activity going on out there. Also, there was a fatality there at that area once and so that’s on the record. So there’s a lot of mitigating factors that we need to take into account and that’s why we want to build this road.”

Kuhl told the council the road project would be able to eventually serve as a north-south circulation route for the city, allowing people to avoid Highway 20 altogether.

Furthermore, Kuhl said U-Haul’s development of the property is based on the city’s plans to build the road.

“U-Haul has designed, permitted and had approved plans based on the city building the north section of Fakkema Access Road,” he said. “This developer has already come forward, we’ve approved their site plan and so they’re currently under site construction. They’ve submitted building plans and the building plans are ready for approval.”

Kuhl said the U-Haul facility will be built in two phases. The first is currently under construction and will use the Fakkema Access Road. The second phase calls for U-Haul to build its own road extension to the south that stretches to Case Road, which raised some questions from council members.

“Isn’t Case Road a private road?” asked councilor Jim Woessner, citing concerns about future costs. “And so we’re going to end up building a road onto a private road that then we’re going to have to take on, upgrade and [maintain]? I mean, it’s an underdeveloped road presently.”

“Case Road is currently a private road so that would be definitely a consideration for the future,” agreed Alex Warner, city engineer. “As we’re looking at this as developing the roadway network in the city, we have to start where we are developing from the north. It would be a continuation of the development to the south and at some point in the future, Case Road would need to be made public.”

“And have we verified that Case Road, or the easements on Case Road, are wide enough, or do we have acquisition and everything else to deal with there?” asked Woessner. “Obviously it doesn’t do us any good to start a plan if we don’t have an idea of how to finish it.”

Council member Jeff Mack wanted to know what the city’s actual obligation is to U-Haul.

“We’ve gotten into this thing, so how deep are we, what do we really have to do and what do we want to do?” he asked. “So could someone please clarify that for me?”

“It’s my understanding that we have issued permits on this, that they bought the property with the city’s plans to build this road being made public and that the permits issued contemplated this road being built by the city and not asking them to require them to contribute to it,” said Interim City Attorney Hillary J. Evans. “So, at this point we don’t have any promises made, per se, to the developer, we can decide not to do it. If we decide not to do it, they could very likely file a lawsuit against the city and if that’s something you want to discuss I would recommend we do that in an executive session. But certainly, it’s your choice whether or not you want to build this road, whether you want to fund this road, but in terms of the way it impacts this particular developer and this development could result in liability.”

Council members said they would like to find a way to share the cost with the developer.

“I would like to see the city negotiate to share the cost,” said newest council member Bryan Stucky. “I mean you look at the CIP, it’s $481,500 for construction, yet last week we hear it could be $700,000-plus. I’m not insinuating they should pay 100 percent, because there are city parcels there. Whether we use it for a park or something else, we’re still benefitting, so you know as a comment, yeah, I’m okay approving the extension, but before we sign the contract and build the road, I would really like to see us negotiate to have a cost-sharing process.”

“We certainly do not want to be the community that says we’re going to do something and then doesn’t do it,” said Woessner. “I think a lot of us are in line in the fact that we have committed $481.000 to this project, that was the number we committed and we probably need to be the city that keeps our commitments. Hopefully the developer understands that, that we’ve got a budget established for this and that’s what we have to work with and uh, you know, there’s nothing else there.”

“Just because it’s on the CIP doesn’t mean it always gets done,” said Munns. “But we need the feasibility study, the engineering to finish, to find out is this really going to stay at the amount we thought, or not. I think our attorney has said that we’re not exactly having to do it, we haven’t signed that agreement, it’s just in our [CIP] this is what we’d like to do. This is what we’re planning, but if the costs get too much, then, no. And we’re only building part of the road; if they want the whole road, they’re gonna have to do it.”

The council passed the service agreement extension unanimously.

Marshall said while he has been frustrated in his efforts to get answers, he is still glad he brought the matter to the council’s attention.

“Each time this project was questioned the response given was ‘Council has already approved this project several times and not one of them (council members) have ever questioned it,'” he said. “I was curious as to why Council never questioned this road and what their reasoning for approving it was, so I asked them all about it via email.  I received answers from City Administrator Blaine Oborn but not from any council members. I sent follow up questions and, again, no response from council. I decided to attend the next council meeting and share with them what I had learned about the property through some simple research. I thought it was important for Council to hear at least one of their constituents had concerns about this road.”

Should council approve a bid on the project early next year, construction on the Fakkema Access Road could begin in the spring.