Friends of Centrum:

You may know, Fort Worden has been in the local news a lot at this year-end. It is important to know that the matters do not pertain to Centrum directly in any way, but as an organization, we may be among the largest stakeholders in the outcome.

Here is the background:

• By late summer (2024) the Public Development Authority (PDA), which manages part of Fort Worden, faced insurmountable financial challenges, including a $6.2 million debt to Kitsap Bank, and was set to dissolve.
• By early October, State Parks planned to resume Fort Worden management. However, in pursuit of its debt repayment, on October 4 Kitsap Bank asked Jefferson County Superior Court to appoint a Bellevue WA-based firm as General Receiver (“Receiver) to take control over PDA assets and facilitate a resolution of outstanding PDA debts and liabilities. Within its mandate, the Receiver had until December 4 to accept or reject the PDA’s Master Lease with State Parks. Accepting the Master Lease would mean the Receiver felt it had a solid business plan for new management of Fort Worden. Rejecting the lease would mean the Receiver did not believe the terms of the lease were workable, which most likely meant Fort Worden would revert back to the management of Washington State Parks.
• During October and November, State Parks, Centrum, the City of Port Townsend, and Fort Worden Hospitality – which manages food and lodging services – had numerous cooperative meetings with the Receiver as it undertook the work of trying to reorganize the PDA’s business model for Fort Worden in a way that might be financially sustainable.
• All the Fort Worden-based parties were caught by surprise when, just hours before the Thanksgiving weekend, the Receiver asked the Court for a 90-day extension until March 3, 2025. The extension was granted. Unfortunately, no advance notice of this proposed extension was given to State Parks, the City of Port Townsend or any of the Fort Worden entities. Had they been notified of the proposed extension, State Parks and the City would have presumably challenged it. State Parks, joined by the City, therefore subsequently filed motions on December 13 asking the judge to reverse his decision on the extension. You can read the State’s motion here.
• Centrum, in effect, joined them. Centrum filed a supporting response expressing the harm the 90-day extension would cause. You can read our response here.

Here are the stakes:

Centrum is scheduled to open registration for its 2025 residential music and art programs in January. Centrum’s residential youth programs start in March. The uncertainty created by the extension of the Receiver’s deadline to commit to the master lease until March makes it impossible to open our program. In addition, that uncertainty also makes it impossible for Centrum to begin taking reservations for its spring and summer programs, including Chamber Music, Water World, Voice Works, Choro, Ukulele, Red Hot Strings, Fiddle Tunes, our Writers Conference, Jazz, Blues, and our Dance This workshops that draw over 1,600 participants from across the U.S. and abroad and cater to more than 10,000 audience members.

Without clarity before early March about how Fort Worden will be managed, what buildings will be available, how lease expenses will be distributed, and what food and lodging services will cost (if available at all), Centrum cannot open registration as planned.

We understand the delay may also force Fort Worden Hospitality out of business. Centrum cannot put on our programs without an experienced hospitality provider. The Receiver has not indicated if, when or who might step in, how long it would take for an entity unfamiliar with Fort Worden facilities to get up to speed and offer services, or what those services will cost.

Longer term, with the Fort’s instability and uncertainty, Centrum’s planned multi-million-dollar investments in Fort Worden buildings are on hold. That includes the rebuild of small 1940s cabins used by 100% of our artist-faculty and artists-in-residence, and improvements to other buildings that would, over time, provide $20 million or more of donated funds to upgrade these state-owned buildings. 

Centrum is the largest customer at Fort Worden, generating roughly 20 percent of all food and lodging revenues, in addition to rental income for Makers Square and significant contributions to maintenance and restoration costs for facilities we lease. Centrum hopes to remain as the anchor tenant at Fort Worden State Park for decades to come. This has been our home and is central to our identity for 50 years. You’ve helped make this so, and for that we are thankful.

But Centrum is by no means the only entity affected by the delays. There are over two dozen important community educational partners at Fort Worden, such as Northwind Art, the Port Townsend School of Woodworking, Madrona MindBody Institute, Rainshadow Recording, KPTZ, and Copper Canyon Press. All contribute to local life, and local economics. A recent economic impact study concluded that Fort Worden as a whole offers a positive economic impact of $50 million and supports 368 local jobs. You can read that report here.

There are no easy answers, but Centrum and the other parties cannot wait for critical decisions to be made months from now.

Preliminary Outcome:

A December 20th hearing was held during which time the court judge heard from all of the parties and upheld the State’s objection and (in doing so) ruled the Receiver as having legally rejected the PDA Master Lease. The 90-day extension for making this decision was eliminated. The judge expressed concern for the future of Fort Worden and observed the plain need for any Master Leaseholder to live up to the substantial maintenance needs at the park which is required under the terms of the Master Lease, and said that he would balance competing demands of the parties (to pay attorneys and dispense the limited assets of the PDA to its creditors, presumably) at a hearing in early January. This order legally allows the State Parks Commission to now negotiate lease terms directly with the campus tenants; a position that Centrum favors, however, the existing Master Lease will need to be officially terminated if/when Parks wishes to sign new leases with the tenants, including Centrum. The Master Lease has been rejected, but not yet terminated. Parks is meeting with the Bank on January 7th for a discussion about next steps as a result of the December 20th hearing.

We favor keeping Fort Worden Hospitality in operation in 2025 to facilitate all of the public events at Fort Worden, and to preserve local jobs. State Parks may need to decide if/when to contract with Fort Worden Hospitality, and for how long, as part of their considerations for the near term operations at the Fort.

The December 20th hearing was a step toward clarity and definitive action, which was sorely needed in this case.

Creativity and ingenuity are required to forge a sustainable path for Fort Worden, and if you share that goal, please let the parties know you want an immediate resolution. 

Thank you for your continued support and concern.  For timely updates, please visit https://centrum.org/blogs/, where we will post updates as they become available.