Shelter Bay lease decision stresses community

The question on whether to approve the terms for a new lease for the land under the Shelter Bay development has divided the community between “Yes” and “No.”

Both sides share something in common: Fear.

Residents who favor the lease say it is the “best and final” offer by the Swinomish Indian Tribal Community and fear that if it is not approved, they could lose their homes in 2044, when the present lease expires and fear their homes would lose value in the meantime.

The people opposed to the new lease terms say they fear that if it is approved, they could lose their homes when the rent goes up so high they can’t afford to pay it. They want their neighbors to hang tough and get the tribe back to the negotiating table.

Both sides have been working hard to present their arguments in hopes of prevailing when an “advisory vote” of homeowners is taken on July 15. If 50 percent of the homeowners plus one more homeowner approve, the Shelter Bay board and the Swinomish Indian Senate will begin crafting the language of the actual lease, which must be approved by both parties as well as the Bureau of Indian Affairs, and for some lots, the individual tribal member land owners.

For weeks there have been emails, letters, and various community presentations aimed at swaying the vote.

The “Friends of Shelter Bay” have sent out post cards to residents urging a “Yes” vote on July 15 and put up an informational website, friendsofshelterbay.com.

The group on the other side has also been sharing information. A well-known real estate agent took out a full-page ad in today’s newspaper to explain the “No” side’s position and demonstrate the potential impact on housing costs if the lease terms are approved.

Shelter Bay was formed in 1968, when the developer, Alan Osberg, signed a 75-year lease with the Swinomish Indian Tribal Community. That lease will expire in 2044.

Two years ago the Shelter Bay board approached the tribe about the possibility of extending the lease.

After much talk, the Tribal Senate came back with a proposal to cancel the old lease and enact a whole new one, with terms that would base the new rent on the value of the “finished subdivision,” rather than the raw land value, which is the basis of the current rent.

Some sources say the finished subdivision is everything but the houses, and includes all amenities including the marina, clubhouse, pool and golf course. Others claim it applies to the infrastructure only, meaning streets, water and sewer lines.

While “finished subdivision” value is specified in the tribe’s proposed lease terms, the tribe has not defined what “finished subdivision” includes.

“There are many, many details that will need to be addressed in writing a new master lease, if the Shelter Bay residents vote to continue the lease renewal process,” said Stephen LeCuyer, a Swinomish tribal attorney. “I anticipate that the precise meaning of the term ‘finished subdivision’ in the context of this master lease may well be one of those details.”

With the present lease expiring in 29 years, a new lease signed today would extend the expiration date by 45 years, to 2089.

From the perspective of the people who want to go ahead with a new lease, the extra time would allow the community to remain intact.

Should the lease expire in 2044, according to a document prepared by the tribe, the land and infrastructure would revert to the landowners. “Shelter Bay residents and landowners would be free at that time to discuss a new master lease or individual leases,” the document states.

Besides the extra time, another certainty in the new lease is that the rent will raise significantly starting in 2023. The rent on most of the 870 lots would double in 2023 under the proposed new lease terms.

A document prepared by the tribe shows the rent ramping up to about 14 times higher than today’s rate by the end of the lease term in 2088.

But either way, according to the tribe’s figures, the rent would go up that much by 2088, even if the present lease expires in 2044 and homeowners negotiate individual leases. That’s because the rent in both cases would be based on 7 percent of the “finished subdivision” value.

By replacing the lease now, by the tribe’s reckoning, the homeowners wouldn’t see an increase until 2023, and thereafter, the rent would ramp up gradually, avoiding a huge immediate “sticker shock” that would occur should a new lease go into effect in 2044.

The “Yes” folks are resigned to paying more. Resident Ken Olsen said recently he doesn’t believe the tribe has any incentive to negotiate further and, as he put it, “it’s their land.”

Olsen and his like-minded residents believe a new lease will lend stability to the neighborhood and keep home values from falling.

But Joan Schaeffer, who is in her mid-80s and wears one of the “No” shirts, said, “I’m fighting for my home.” She says many seniors on fixed incomes will be priced out of their homes when the rents go up.

The fear is that the new lease, based on the higher “finished subdivision” value, would cause once affordable Shelter Bay to lose its luster with home buyers of modest means. They say prices would rise to the level of houses on property that is owned by the homeowner.

The “No” folks fear home values will plummet and eat up their nest eggs under the new lease terms. They want the community to take more time in hopes the tribe will continue negotiations.