ZYLSTRA LAKE UPDATE

Legislative Impasse Puts Major Funding Source in Limbo

When the state legislature adjourned in July without passing a Capital Construction Budget, all funding for the Washington Wildlife and Recreation Program (WWRP) was put on hold—including a grant that would have allowed the San Juan Preservation Trust-San Juan County Land Bank partnership to complete its $3 million acquisition of Zylstra Lake Preserve on San Juan Island.

Now that this funding source is on indefinite hold, where does that leave the project?

READ MORE …

After selling off a 30-acre portion of the property in late 2016, we were thrilled to learn last January that the Zylstra Lake project was awarded a $1 million federal coastal wetlands grant (thanks to indispensable support from the University of Washington’s Friday Harbor Labs). A high ranking in WWRP’s “Water Access” category put Zylstra in a strong position to receive state funding for an additional $1.1 million grant, subject only to the state legislature’s approval of a capital budget.

Upper Zylstra Lake | Photo: Andrew O’Neill

To purchase Zylstra Lake, the SJPT-Land Bank partnership entered into an agreement in December 2015 that required a loan financed by the sellers of the property. In August 2016, a 30-acre parcel that included a farmhouse and outbuildings, known by many as “October Farm,” was divided and sold to a private party for $825,000. The proceeds from this sale were applied to the outstanding balance on our loan. With this sale, the Preservation Trust and Land Bank had anticipated that the $1 million federal grant, along with a $1.1 million WWRP grant pending from the state, would cover the remaining balance.

Now that the lack of a state capital budget has put an indefinite hold on the funding of this grant, the County Land Bank has offered to step up to bridge this timing gap and pay off the balance still outstanding on the seller’s note —a full year in advance. Not only will this provide the matching dollars needed to trigger funding of the federal Coastal Wetlands grant, but it would also eliminate a year’s worth of interest that would otherwise be owed by the SJPT-Land Bank partnership.

“We are making the payment that’s due in December,” said Lincoln Bormann, Director of the San Juan County Land Bank, at a recent Land Bank public meeting on Orcas Island. “We will then expect to be fully reimbursed by the grants when they are funded.”

“We are optimistic that the WWRP grant will come through,” said Tim Seifert, Executive Director of the San Juan Preservation Trust. “Unfortunately, we just don’t know when that will be. In the current political climate, nothing is certain. There’s still some possibility that the grant fails and the Preservation Trust would have to raise private funds to complete this project, but for now we’re confident that state legislature will ultimately follow through on its commitments.

“The public benefits of this project really resonated with the WWRP water access grant review committee,” Seifert added, pointing to its high ranking. “While this delay could end up derailing many other important projects around the state, we’re feeling like Zylstra Lake is in good shape, thanks in large part to the commitment of our County Land Bank.”