Viking Avenue condos get second chance

POULSBO — Kitsap Bank has one year to find a developer for the proposed Valhalla Village condominium project off of North Viking Avenue, or lose the project completely. The Poulsbo City Council voted 5-2 on Wednesday to approve a one-time, one-year extension of the site plan, which was first given council approval in 2006.

Since the project’s initial approval, the council had also amended the Critical Areas Ordinance requires a larger buffer between buildings and wetlands. Under pre-2007 rules, the project can be built on nearly all the 2.8 acres with a 40-foot buffer. Under new rules, the project would have been limited to 1.91 acres of development with 150-foot buffer.

Until the one-year extension runs out, Valhalla Village is grandfathered in the pre-2007 ruling.

Last June, two years after Kitsap Bank took over the project, the bank asked the council for an extension on the project, saying it needed more time to find a new developer.

The council, however, voted to deny the extension in July, on the basis the bank didn’t prove it was actively seeking a developer.

The project is “not environmentally up to our standards,” Mayor Becky Erickson said in July, and reiterated this in a recent interview.

“If the bank finds a willing customer for this particular property, I would sure like to moderate some of the design. I have concerns,” Erickson said. “However, it was a lawful development when it was applied for.”

The site, which sits on Viking Avenue south of Highway 305, near the entrance to Stendahl Ridge neighborhood, borders Category 1 wetlands on the eastern third of the property.

The original developers had five years to apply for building permits, planning 20 single-family detached units on 2.83 acres. However, they were foreclosed on before any action was taken. The bank sued the council in August, petitioning a land use appeal under the old rules, again requesting an extension.

Councilmembers Jeff Bauman, Jeff McGinty, Connie Lord, David Musgrove and Ed Stern voted for the extension because they were unsure how the council could decide whether the petitioner had good cause, calling the city code “vague criteria.” And because the project was approved under the old rules, the updated Critical Areas Ordinance did not apply.

However, councilmembers Linda Berry-Maraist and Jim Henry voted against the extension, staying with the council’s earlier decision that the bank was not actively moving on the project.

Henry said he understood the city did not want to become embroiled in a lawsuit, but “sooner or later someone has to stand up.” He feared this would cause a precedence for other developers who would ask for an extension.

“It’s insulting,” he said.

In June, Kitsap Bank alluded to the tough economy as the reason why they had no developers yet.

“I am sure you understand the state of the current real estate market and the need for additional time to complete a development like this one,” Larry Grohn, a senior vice president at Kitsap Bank, told the council in June.

Jim Carmichael, president of Kitsap Bank, said in an interview they will continue to try to market the property with this extension.

“We have been trying since we’ve owned the property [to find developers],” he said.


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