Fort Worden Public Development Authority: Our Next Five Years July 2019 1
Why are we here? • The PDA has arrived at a crucial stage in its development • Five years of success: how can we sustain it over the next 5 years? • Complex issues, in a complicated setting, requiring creative solutions • Relationships & community involvement are key to a shared future 2
A unique organization… The PDA is not a: The PDA: • Department of the city or county • Is a special purpose public entity with a lifelong learning mission • Part of State Parks • Manages 95 acres & 100+ year-old • For-profit business buildings leased from Washington • Non-profit organization State Parks • Must follow same rules as a city (open public meetings, no gift of public funds, etc.) • Must be financially self-sustaining 3
A unique organization… The PDA has a triple bottom-line: The PDA manages: 1. Operate the Fort’s hospitality and • 60,000 square feet of meeting food & beverage services spaces, 396 beds and 4 food outlets 2. Preserve and renovate historic 73 • A legacy of $100 million in deferred buildings capital needs 3. Fulfill lifelong learning mission— • Diverse interests, tenant partners, and be community serving groups and public needs 4
A unique organization… Revenue in 2018: $6.36 million PDA has no: • Endowment • Taxing authority • Government subsidy 5
A unique organization… Manages an historic, national 2018 operating expense: treasure and operates a large hospitality business • 1.5 million visitors a year • 15 tenant partners — nonprofits and creative enterprises • 87 full-time staff with benefits • 73 historic buildings Maintains annual capital budget (depending on funding) 6
A busy first five years… Hospitality Services: Historic Preservation/Development: • Installed Wi-Fi and internet • Collaborated/completed Building 202 • Built in-house food & beverage business • Renovated lodging units • Acquired housekeeping services • $5+ million leasehold improvements • Developed new marketing channels • Designed Makers Square & Glamping • Increased occupancy • Assumed all maintenance responsibilities • Expanded visitor shoulder season • Prepares annual maintenance and capital improvement plans with WSP 7
A busy first five years…(con’t) Lifelong Learning/Partner Support: Economic and Community Development: • Eliminated Discover Pass requirement in • Increased City LTAC & Sales taxes Campus (sales of over $250K annually) • Furthers City’s tourism & economic • Developed partner earnback on lease goals rates (nominal increase in 5 years) • More local control at Fort • Improved partner/group services • Growth as major employer in county • Collaborative marketing • Hosted community events • Established FW Foundation • Initiated sustainability programs 8
The next five years: some serious challenges … Hospitality Services: Historic Preservation/Development: • Hospitality income will plateau • Crumbling infrastructure & buildings in (peak season capacities reached) disrepair; • Limited capacity for growth in residential • Historic property constraints programming and group visitation • The high cost of building renovation and • Lack of “hotel” style units maintenance • Workforce housing needs • Emergency repairs • Access to capital for building maintenance and improvements 9
The next five years: some serious challenges… Lifelong Learning/Partner Support: Economic and Community Development: • Increasing costs to Partners and groups • Need to develop new partnerships, for non-residential programming events and activities • Ability to recruit new Makers Square • Reliance on state funding for capital tenants or partners needs • Partner and group income vulnerable in • Need for strengthened relationships an economic downturn and collaboration with state, city and community 10
Priority capital expenditures, next five years WSP Responsibilities: PDA Responsibilities: • $3M Fix failing water lines • $14M Makers Square • $1.5M Fix failing sewer lines • $1.6M Glamping • $3.4M O-Row lead & paint • $1M Boilers and HVAC repairs • $2.75M Fix failing roofs • $450K Employee housing • $1.68M Campus fire alarm system • $2M NCO housing improvements • $1M Electrical undergrounding • $250K Major kitchen equipment repairs • $500K Road & sidewalk repairs • $200K Bathrooms in Bldgs 16 & 225 • $???? Replace PTMSC pier • $200K Electrical upgrades in mtg rooms $14M+ TOTAL • $2M Replacement of Lock System • $21M+ TOTAL 11
What if the PDA fails? • State Parks unlikely/unable to resume management • Meanwhile, buildings and grounds deteriorate • “Lifelong Learning” mission may be abandoned • For-profit concessionaire best solution—would significantly raise prices • Restricted community access if operated by concessionaire • Potential loss of local public control over a major community asset • Loss of economic driver for the city and county 12
Our long-term success depends on our ability to… Hospitality Services: • Weather external influences and economy fluctuations • Provide seasonal workforce housing • Develop system efficiencies in operations Historic Preservation/Development: • Sustain funding for building renovations and adaptive reuse • Maintain strong partnership with State Parks for building and infrastructure repair • Build cash reserve for emergencies Lifelong Learning/Partner Support: • Support programmatic growth and innovation • Expand residential programming in shoulder seasons • Recruit new partners that are mission aligned • Develop FW foundation fundraising 13
Meeting priority PDA capital needs through 2023 will require… • 5-7% annual growth in operating budget from $6.36M in 2018 • 3% annual growth in occupancy rate 2016: 42.1% 2017: 47.6% (not including dorms) 2018: 56.2% • Significant increase in contributed income $10M in capital fundraising $5M in operations fundraising Access to capital financing 14
Our Vision for 2023 • Thriving partners able to evolve and grow their programming • A vibrant and thriving Makers Square • Dynamic new partners and off-site partnerships for diverse, creative programs • Improved marketing attracting more meetings, events and other group visitation • Continued improvements in expanded facilities and services • Growth in philanthropic and other funding sources for priority capital improvements 15
Why success is important: the Fort’s promise • Brand position statement, developed with valuable input from staff, partners, community and PDA board : Surrounded by sea and mountains in historic Port Townsend, Fort Worden is a national treasure that enriches lives by engaging people in the arts, ideas, wellness, nature, community and play. • The position statement highlights: • Our “lifelong learning” charter • Our unique character of this special place • Our intimate, symbiotic connections between the community and Fort • Our support for diverse and engaged partners 16
Solutions for moving forward & a call to action…. • Develop and execute vital operational plan for Makers Square • Collaborate with partners in developing new, market-driven residential programming • Recruit new partners who generate significant visitation, especially overnight visits • Grant longer term partner leases with discounts for partners who generate overnight stays and who invest in facility capital improvements • Continue emphasis on group sales and lifelong learning focus • Develop and conduct a regional pubic awareness and marketing campaign • Develop and execute Fort Worden Foundation fundraising plans to increase contributed revenues • Leverage outside capital investment 17
Thank you! Your thoughts? Questions? 18
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