In-depth report: Yelm’s acquired 640 acre deed, associated loan debt

• Editor’s note: The Yelm City Council Study Session of April 6, 2021, encompassed a discussion of what to do with the land the city will possess free and clear when the L.I.D’s bond payments for the Killion/Yelm Ave. West roadway intersection improvements have been concluded in 2024.
• Yelm’s council was fully briefed on this January 7, 2020, a summary published by the city here.
• Yet last week, Councilor Wood asked 1) who owns the property right now, 2) how did Yelm come into possession of the 640 acre deed? The mayor said the 640 acres and debt was retained by the city when an L.I.D. taxpayer defaulted, without saying why.
• Mayor Foster signed a Deed in Lieu of Foreclosure without telling council or getting their approval, yet why he did so was again not addressed!
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• BRIEF SUMMARY FOR CLARIFICATION:
• On December 29, 2017, without consulting nor receiving proper authorization from the city council, Mayor Foster unilaterally signed a contractual Agreement for Deed in Lieu of Foreclosure on behalf of the City of Yelm. This agreement gave the property owner, DDD Washington LLC, two years to pay the back taxes, interest, and any fees, or 100% forfeit to the city the 640 acres and loan debt balance owed to the Local Improvement District (L.I.D.). DDD defaulted for non-payment as of December 31, 2019, and the city subsequently reported the parcel became an asset of the L.I.D. as of January 3, 2020. The City of Yelm owns the parcel 100%, yet is encumbered by and responsible to reimburse the remaining loan debt to the L.I.D. by 2025, before any disposition of the property can be initiated by the city.
• The City of Yelm is listed as the owner and taxpayer, with the L.I.D. assessment against the real property. Balance owed = $1.5 million + interest.
• The Agreement for Deed in Lieu of Foreclosure signed by Mr. Foster.
• The City of Yelm L.I.D. loan and payment schedule, with remaining balances.
• The council adopted the 2020 amended budget Dec. 15, 2020, with $496,205 expended for the L.I.D.
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THIS ENTIRE ISSUE WAS COVERED ON THIS BLOG JANUARY 15, 2020, AS FOLLOWS:

Regarding the city’s recently acquired 640 acres parcel, the Yelm City Council received a briefing from Community Development Director Grant Beck at the January 7, 2020 Study Session. While an introductory overview, the council received little information on how contentious this L. I. D. (Local Improvement District) became when former Mayor Harding led the charge in 2006 on behalf of the Thurston Highlands developers, who went bankrupt in late 2008. This 2006 council-approved L. I. D. put a portion of the cost of road improvements at the then-proposed Tahoma Blvd./Yelm Ave. W. intersection onto the backs of adjacent property owners.

“Thurston Highlands developers Doug Bloom & Steve Chamberlain asked the city for help in funding road improvements necessitated by traffic impacts from their Tahoma Terra developments.

The city advocated the L.I.D. property owners’ land values would substantially increase due to proximity to the developments.

Property owners in the impact zone of Tahoma Terra were forced to pay a City Council imposed L. I. D. covering 46% of the costs of road improvements to Yelm Ave. West, Killion, & Tahoma Blvd. via mandated property taxes, or almost one-half of the cost of the road improvements, work that should have been borne totally by the developers.

Then, property values fell after the 2008 downturn and property owners who were forced into the L. I. D. carried an undue debt load for the roadwork. Read more

Mayor Foster unilaterally contracted an Agreement for Deed in Lieu of Foreclosure [Dec. 2017] to a delinquent L.I.D. taxpayer, and when they defaulted according to this contract [Dec. 2019], they left the city a deed for 640 acres, plus a $2,194,320 million loan debt, which is paid to 2024-2025.

This defaulted L.I.D. taxpayer, from a very high-profile family in Seattle, was an owner of three major parcels of undeveloped land in the far western portion of the Thurston Highlands development, made a decision to part with one of their parcels (640 acres), for which they were multiple years behind on property taxes/interest payments. For some unexplained reason, Mayor Foster signed a clandestine contract for a Deed in Lieu of Foreclosure on December 29, 2017, leaving the city with the land plus over $2 million in debt IF/when the land-owners defaulted. This was all set-up to get them out from under what they owed the city, so of course they were going to default! Council requested explanations from Foster since June 2018, only to be told to wait until the end of 2019 to see if the land-owners would eventually make their payments in full. If in default on December 31, 2019, the city would take on the land and the L. I. D debt. That occurred, so on January 7, 2020, the council began to get their minds around what Mayor Foster had fostered onto the city’s back and budget.

Councilor Carmody asked, “Where did the Deed in Lieu of Foreclosure come in?”

Carmody did not get a response and Mayor Foster’s silence was palpable. He KNOWS he was the one who negotiated the contract, without council’s approval.

Why has the council not demanded a straight answer from Mayor Foster?

The Yelm City Council needs to demand an answer from Mayor Foster as to why he agreed to this contract of a Deed in Lieu of Foreclosure and accompanying $2+ million L. I. D. debt WITHOUT COUNCIL’S AUTHORITY.

The mayor’s authority for expenditures without council’s approval is a maximum of $35,000. The laws/regulations of the state and city do not convey to the mayor the authority to unilaterally negotiate and sign this agreement, according to: + the RCW [42.30.070, “No governing body of a public agency shall adopt any ordinance, resolution, rule, regulation, order, or directive, except in a meeting open to the public.”] and the Yelm Protocol Manual [2.02 A 1e, Summary of Council Duties and Responsibilities as Provided in, but not Limited to, the Washington Administrative Code and Revised Code of Washington, Establish Policy, Approve contracts].

Bottom line:

• Yelm Ave. West, and Killion property owners were unduly burdened by the city in 2006!
• This blog covered the extremely controversial council sessions that brought this L. I. D. into fruition. Click here
• The Yelm city council keeps asking why the city has this debt, as Councilor Wood did on April 6th, yet has never pressed Mayor Foster for his explanation.