Letters to the Editor

Letter to the editor | Status of ‘good-faith negotiations’ between PenMet and ZTM

ZTM offered to buy PenMet’s acreage at Madrona with a 50 year restriction that it be used solely as a golf course. Here’s what ZTM’s attorney stated in his letter dated November 22, 2024:

“(ZTM wishes)…to negotiate the purchase of PenMet’s ownership interest in Madrona Links Golf Course, for the purpose of establishing the future of the golf course as a privately owned public course dedicated solely for golf course use for the next 50 years (and) ZTM…is prepared to offer a fair and reasonable price for PenMet’s property.”

PenMet’s attorney wrote a heavily researched 16 pages to ZTM’s attorney responding to ZTM’s offer. More than 3 pages of that letter are spent attacking ZTM’s appraisal of the 14 acres at $8.105M. I have no opinion on the accuracy of ZTM’s appraisal for the singular reason that I don’t need to have any opinion. To me, this is a pointless discussion since ZTM’s offer is to purchase the acreage owned by PenMet offering “…a fair and reasonable price for PenMet’s property.”

PenMet’s attorney’s response to ZTM’s offer states:

1. ZTM would experience a “windfall” after the 50 year restriction lapses: A “windfall” is defined as “an unexpected, unearned, or sudden gain or advantage.” Is it “unexpected” to sell a property after 50 years of ownership at a gain? Is it “unearned” to operate and maintain a property for 50 years and then sell at a gain? Is it “sudden” to realize a gain after 50 years?
2. PenMet’s Board must unanimously vote to approve the sale: True
3. PenMet’s Board must declare the property to be sold as “surplus property”: True, but more on this below.
4. PenMet must sell the surplus property by open bidding: True

#3:  RCW 35.61.132 states that the property to be sold must be “… declared surplus for park or other recreational purposes …” PenMet’s attorney asserts that the mere fact that ZTM is willing to put a 50 year restriction on the property limiting its use to a golf course is proof that PenMet’s acreage cannot be declared “surplus property.” Its use is being limited to “… other recreational purposes.” I find this assertion questionable. First, property can become surplus for a variety of reasons. Some examples:

1. Inadequate financial resources to properly use and maintain the property (this may apply in this case)
2. Inadequate internal skill sets with staff to properly use and maintain the property (this also may apply)
3. Development around the property that inhibits the use of the property
4. The property may become simply more than PenMet needs

And, almost any property can be used for “parks or other recreational uses.” Even the backyard of a private residence can be a playground for kids. If you agree with PenMet’s attorney’s assertion, a metropolitan park district could never sell real property. That interpretation is clearly inconsistent with RCW 35.61.132 because it specifically authorizes the sale of real property.

PenMet’s attorney, in support of his assertion, says that the use restriction “… then clearly (shows) the property is still necessary for park and recreation purposes …” The attorney has inserted the word “necessary” in his statement, but it’s not in the statute.  The Board does not need to determine if PenMet’s acreage is “necessary” for anything. They can simply declare it to be “surplus” and sell the property.

PenMet’s attorney is also concerned that the 50 year use limitation would come with no enforcement power. He then states that PenMet could “… seek a court order” which enforces the restriction, but dismisses that as an inadequate remedy. Isn’t a court order the normal way that any contract provision is enforced? What power could be granted to anyone other than the courts to enforce the rights and obligations of any contracting party? In addition, the restriction could be recorded putting any prospective buyer on notice of the restriction which would dramatically reduce the market value of the property.

PenMet’s attorney’s final words: “Therefore, PenMet Parks rejects this proposal.” Is this acting in good faith?  How about a counter-proposal?

PenMet’s Offer To Purchase ZTM’s Parcel

PenMet did make a new offer for the 14 acres which it describes on its website as follows:

… ZTM would transfer the property to PenMet Parks and some funds to correct the deferred maintenance. In exchange, PenMet Parks would release all of its claims against Tyson/ZTM for deficiencies at Madrona Links Golf Course. The National Golf Foundation estimates the actual costs at approximately $6-$7 million. Read more here.

The phrase “some funds” needs a little further definition. In this case “some funds” equals $3,510,000. So ZTM gives PenMet their 14 acres and, in addition, pays them $3,510,000 and then they go their separate ways. Again, is this a good faith offer?

Craig McLaughlin

Fox Island

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