Shelter Bay lease

In 1968, Allen Osberg, a Seattle construction company owner, negotiated a 75-year master lease with the Bureau of Indian Affairs to benefit the Swinomish tribe and tribal members. Osberg’s Shelter Bay Company marketed sub-leases for the developed lots, installed utilities and built community facilities and the marina. The master lease and

individuals’ sub-leases will expire in 2044. At the end of the leases any improvements that are not removed will become the property of the BIA to manage on behalf of the tribe and tribal members.

The Shelter Bay board asked the tribe for a 45-year extension of the current lease to 2089. The Swinomish tribe responded not with a lease extension as requested, but with a “best and final” offer for a totally new lease “agreement” that would cancel the current master lease. Unable to accept the tribe’s new terms, the community voted to continue the negotiation process.

The Shelter Bay board formed a Lease Advisory Group and retained the services of several appraisers, economists, and attorneys who recently presented their findings to the community. One of the startling conclusions was that the tribe’s newly proposed lease terms, including an increased “rent” schedule, would make Shelter Bay economically unsustainable.

Accepting the new proposed lease ensures the ultimate demise of Shelter Bay. In other words, the tribe’s proposal was a bad economic deal for any investors.

Today, it appears the time and expense the Shelter Bay board spent may have been unnecessary. Home sales in Shelter Bay have been brisk despite passing the date of the 30-year mortgage financing “deadline.”

Twenty-seven years remain before the current master lease expires. No doubt Chairman Cladoosby and tribal staff will change, and there may be substantive changes in federal Department of Interior and BIA policies.

The SB Board should formally reject the tribe’s “best and final” lease offer and request to continue negotiating an extension of the current Master Lease agreement retaining the existing terms and conditions.

Both the original master lease and sub-leases were fair to both sides at the beginning, and they remain so today.

There is plenty of time for further analysis and proposed solutions to ensure economic stability in Shelter Bay. The rents and the terms of the master and sub-leases must work in the marketplace and not jeopardize the public health, safety and welfare of the residents of the Shelter Bay community.

Bruce Elliot

La Conner