HomeMy WebLinkAboutord2026-006Whatcom County COUNTYCOURTHOUSE
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n ^,� Bellingham, WA 98225-4038
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Agenda Bill Master Report
File Number: A132026-104
File ID: AB2026-104 Version: 1 Status: Substitute Adopted
File Created: 01/20/2026 Entered by: MMiterko@co.whatcom.wa.us
Department: Finance Division File Type: Ordinance
Assigned to: Council Finance and Administrative Services Committee Final Action: 02/10/2026
Agenda Date: 02/10/2026 Enactment #: ORD
2026-006
Related Files:
Primary Contact Email: atan@co.whatcom.wa.us
TITLE FOR AGENDA ITEM:
Ordinance establishing the 32nd Street Property Acquisition Fund and establishing an initial
budget for the 32nd Street Property Acquisition Fund
SUMMARY STATEMENT OR LEGAL NOTICE LANGUAGE:
Ordinance establishing the 32nd Street Property Acquisition Fund to account for revenues and
expenditures related to the acquisition of the property and tenant improvements necessary to
make it operational. The 32nd Street Acquisition Fund seeks an initial budget of $8,700,000 as
described in Exhibit A. Please see attached.
HISTORY OF LEGISLATIVE FILE
Date: Acting Body:
Action:
Sent To:
01/27/2026 Council
INTRODUCED Council Finance and
Administrative Services
Committee
Aye:
5
Boyle, Buchanan, Galloway, Rienstra, and Scanlon
Nay:
2
Elenbaas, and Stremler
02/10/2026 Council Finance and Administrative
SUBSTITUTE
Services Committee
RECOMMENDED FOR
ADOPTION
Aye:
5
Boyle, Buchanan, Galloway, Rienstra, and Scanlon
Nay:
2
Elenbaas, and Stremler
02/10/2026 Council
SUBSTITUTE ADOPTED
Whatcom County Page 1 Printed on 211112026
Agenda Bill Master Report Continued (AB2026-104)
Aye: 5 Boyle, Buchanan, Galloway, Rienstra, and Scanlon
Nay: 2 Elenbaas, and Stremler
Attachments: Memo, Proposed Ordinance, Substitute Ordinance, Notice of Action Proposed on 1.27.2026
Whatcom County Page 2 Printed on 211112026
Docusign Envelope ID: 317270FA-3C80-4DB3-A58F-05FE875D1884
PROPOSED BY: Executive
INTRODUCED: January 27, 2026
ORDINANCE NO. 2026-006
ORDINANCE ESTABLISHING THE 32ND STREET PROPERTY ACQUISITION FUND AND
INITIAL BUDGET
WHEREAS, the County has been evaluating the need for operational office space with
a focus on the Northwest Annex facility complex for several decades; and
WHEREAS, in 2021, the County Council authorized the creation of a project budget
fund to design and construct a new facility complex at the current location of the Northwest
Annex facility; and
WHEREAS, cost escalations in labor and materials related to the Northwest Annex
facility project in conjunction with a number of capital priorities have prompted the County to
look for alternatives; and
WHEREAS, a suitable property has been found at 333 32"d Street, Bellingham,
Washington that is available for purchase that will satisfy the needs of the County as an
alternative to building at the Northwest Annex property; and
WHEREAS, funding is needed to accommodate the purchase of this property and to
perform tenant improvements necessary to make the building operational for County
purposes; and
WHEREAS, funding is available in the NW Annex Redevelopment Fund, the Hovander
Park Building Improvements Fund, the Capital Facilities Reserve Fund, the Public Utilities
Improvement (EDI) Fund, and the Real Estate Excise Tax (REST) II Fund; and
WHEREAS, Section 6.80 of the Whatcom County Home Rule Charter allows for
project -based capital budget appropriation ordinances that lapse when the project has been
completed or abandoned or when no expenditure or encumbrance has been made for three
(3) years.
NOW, THEREFORE, BE IT ORDAINED by the Whatcom County Council that a new
fund is hereby established effective immediately, titled the 32"d Street Property Acquisition
Fund. This fund shall be used to account for the revenues and expenditures related to the
acquisition of the property and tenant improvements necessary to make it operational; and
Docusign Envelope ID: 317270FA-3C80-4DB3-A5BF-05FE875D1884
BE IT FURTHER ORDAINED by the Whatcom County Council that the 32"d Street
Property Acquisition Fund is approved with an initial project budget of $8,800,000 as
described in Exhibit A.
ADOPTED this 10thday of February 2026
ATTE T� .°�( — �'O•• Cf
f) : COUNTY •.
Cathy Hal a6CW1 Tgthp�Council
H1NG
APPROVED AS TO rORM:
Approved by Email/B Waldron/A Tan
Civil Deputy Prosecutor
WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Slpn•d by:
Kay, ee a oway, Council Chair
WHATCOM COUNTY EXECUTIVE
WH COM COUNTY, WASHI GT
Satpal Sidhu, t
unty Executive
(�) Approved ( ) Denied
Date Signed:
Docusign Envelope ID: 317270FA-3C80-4DB3-A5BF-05FE875D1884
EXHIBIT A
Supplemental Budget Request
Administrative Services Facilities Management
St,on 1 rn y ss%? 1 Fund Cost Center Originator: Rob Ney
Year 2 2026 Add'I FTE ❑ Priority 1
Name of Request: Purchase of Real Property at 333 32nd Street
X
Department Head Signature (Required on Hard Copy Submission) Date
Costs:
Object
4362.1000
Object Description
Rents and leases
Amount Requested
($25,000)
4362.1000
Rents and leases
($75,000)
6190
Direct billing rate
$40,000
6960
Water and sewer
$24,000
6970
Gas
$28.000
6980
Electric
$118,000 I
6990
Solid waste
$8.000
7060
Repairs and maintenance
$222,000
7070
Minor remodeling
$554,899
7350
Buildings and structures
$7.805,101
8397.C.32402401
Transfers in
($900,OOD)
8397.C.35151000
Transfers in
($3,000,000)
8397.C.32422400
Transfers in
($1,000,000)
8397.C.38051000
Transfers in
($1,200,000)
8397.C.35131000
Transfers in
($2,600,000)
Request Total
$0
1a. Description of request:
The County has desired to replace the Northwest Annex Facility for several decades. In 2020, and with
the hopes of Creating a "shovel ready project" that might attract State or Federal funding, the County
began investigating the Northwest Annex Redevelopment project. In December of 2021, the Council
authorized $5.1 Million in funding for designing a new Campus Facility at the Northwest Annex site which
included 3 new office buildings (Northwest Annex Redevelopment Fund Project Based Budget Ordinance
2021-087.) The proposed site plan/campus would create three new buildings, associated parking and
stormwater facilities. Building 1 would be fully built out and was a 2-story 51,000 sf office building to
replace the existing Northwest Annex Building and would house Planning and all of Public Works (moving
the Civic Center occupants to the new location). A second 25,000 square foot office building "shell" would
be built to take advantage of economies of scale in pricing and would be primarily used as storage to
replace the out buildings being lost in the existing Northwest Annex complex. A third building pad would
also be assumed for a future third, undefined/un-designed 28,000 sf building. All associated parking and
stormwater for all three buildings would be included with building 1 construction. Unfortunately, the cost
for this construction (roughly $63 million) far exceeded the County's available budget for this project.
On March 25, 2025, the Executive's office presented to Council updated financial analysis regarding the
County's capacity to fund major capital projects. This analysis, conducted with the expertise of financial
consultant Doug Merriman, evaluated the previous funding assumptions, which relied predominantly on
debt financing secured by Real Estate Excise Tax (REET) revenues and funding from the County's portion
Friday, January 16, 2026 Rpt Rpl Suppl Regular
Docusign Envelope ID: 317270FA-3C80-4DB3-A5BF-05FE875D1884
Supplemental Budget Request
Administrative Services Facilities Management
s, .o v 5j27 Fund Cost Center Originator: Rob Ney
of revenues from the Public Utilities Fund (EDI). The County simply could not afford the new construction
projects on the horizon.
The Council requested the Administration pursue resolution of the need for a new Sheriff Office. In
November of 2025, the Administration met that with the lease of the 4600 Ryzex Way Building. Although
that building will not be occupied until mid-2026, the long term need for this building has been satisfied.
During this time, Western Washington University reached out to the County on available office space they
had at their Administrative Services Building at 333 32nd Street. This property was evaluated and quickly
became an option for the replacement of the Northwest Annex and relocation of PDS/portions of PW.
After several months of negotiations, the Executive entered into a purchase and sale agreement with
WWU, contingent on Council approval. The County and WWU negotiated to rent back a portion of the
building to WWU for the first two years.
333 32nd Street is a two story 29,992 sf building located near Sehome Village and the former Sehome
Cinemas with convenient 1-5 access. Currently, Western occupies the top floor and a portion of the first
floor.
The agreed price is the assessed valuation for 2025, which is $8,056,584. The cost/sf for this purchase is
roughly $269/sf compared to the $660/sf of the new construction option.
In the short-term, purchasing this building is the most expeditious way to address the facility needs for
staff currently occupying the NW Annex building and takes significant pressure off of the CIP in 2027 and
beyond. In the longer term, after WWU vacates the second floor, this building will allow the County to
relocate some Public Works staff from the Civic Building, or other offices or departments, freeing up
space to address the growing needs for additional space for several departments or offices located in and
around the County Courthouse, and ultimately accomplishing the same goals that Building 1 of the NW
Annex redevelopment project would achieve.
The total project, including estimated tenant improvements, is $8,800,000. Please see the attached
Exhibit A for additional information.
The staff and customers of the Planning Department, Engineering Services division of Public Works, and
other county departments that may be located in the building.
1b. Primary customers:
The County has been trying to relocate the occupants of Northwest Annex for 30 years. This is a cost-
effective alternative to the construction of the Northwest Annex Redevelopment project.
If the decision on this purchase is deferred, and absent an alternative solution for staff currently in that
building, significant maintenance is needed to keep the current NW Annex building occupiable (repairs
could be as much as $2.5-$4M)_
2. Problem to be solved.
The County considered rebuilding the Northwest Annex is a Campus setting, with three new office
buildings. That proved to be unaffordable.
3a. Options / Advantages:
The County considered rebuilding the Northwest Annex is a Campus setting, with three new office
buildings. That proved to be cost ineffective.
This is a relatively inexpensive option that solves a long term need for the County.
3b. Cost savings:
Very cost effective per square ft
Well maintained
Newer and modern, meaning lower cost/sf for maintence
Convenient 1-5 access
Friday, January 16, 2026 Rpc- Rpf Suppl Regidor
Docusign Envelope ID: 317270FA-3C80-4DB3-A5BF-05FE875D1884
Supplemental Budget Request
Administrative Services Facilities Management
Sup;'- ,o a 5327 Fund Cost Center Originator: Rob Ney
Training center to accommodate large public meetings (e.g. planning commission)
The cost savings are relative to building new. This is roughly one -quarter of the cost.
4a. Outcomes:
If approved, the County would own the property around the first of February 2026. A small tenant
improvement is expected to provide a permit counter. Further tenant improvements will be coordinated
between the occupants, facilities, and information services.
4b. Measures:
When title has been transferred to the County.
When the project is complete and within the specified budget.
5a. Other Departments/Agencies:
N/A
5b. Name the person in charge of implementation and what they are responsible for.
Rob Ney, Facilities Director & Hans Howard, Special Projects Manager
6. Funding Source:
$2,500,000 Redirected the Northwest Annex Redevelopment Funding (SOURCE) (No Companion)
$3,000,000 Capital Reserve Fund (Companion Supp. 5355)
$1,000,000 EDI (Companion Supp. 5357)
$1,200,000 Redirected from the Hovander Park Building Improvement Fund (SOURCE) (Companion
5317)
$900,000 (REET II) (Companion Supp. 5356)
$100,000 Revenue Account (No Companion)
The Parks Department intends to make future requests during the CIP Process to replenish the Hovander
Park Building Improvement Fund at a later date.
Friday, January 16, 2026 Rpt: Rpr Suppl Regular