Harcourt Developments close to major deal in Washington

Irish property player Harcourt Developments is in the final stages of negotiating a deal to redevelop up to 20 acres of waterfront in Bellingham port in Washington in the northwestern US.

The Pat Doherty-led developer, which was behind Belfast’s Titanic Quarter urban regeneration project, was one of four bidders that submitted proposals for a similar scheme to the Port of Bellingham authority last year.

Bellingham and Harcourt began formal talks a number of months ago. The port's executive director, Rob Fix, confirmed that the pair are close to a deal. "They are by no means completed, but they are fairly far along," he told The Irish Times.

Port of Bellingham, which is a state authority, wants the site of an old Georgia Pacific paper mill on a site on the harbour’s waterfront, close to the city’s centre, redeveloped as a mixed, residential, commercial and retail area, along the lines of the Titanic Quarter.

If agreement is reached, Harcourt will buy the land from Port of Bellingham, and redevelop it in keeping with zoning and planning guidelines already laid down by the US city’s authorities.

The Georgia Pacific site consists of close to 11 acres, but Mr Fix said the talks with Harcourt involve up to a total of 20 acres. However, he explained the transaction will be structured so that the Irish company does not acquire all of the property at once.

Instead, the port will initially release “two to three acres” to Harcourt. If the company is successful with that, it will release further parcels of land up to 20 acres.

The negotiations between the two are focused on a purchase price for the land, development schedules and performance criteria for Harcourt’s work. The port authority has told local media that the Irish company will have to perform on the initial tranche if it is get the entire land bank.

Mr Fix said the authority was not in a position to put a value on the land as the talks are ongoing and it was commercially sensitive. Some local reports speculate it could cost around $100 million to clean up the site and redevelop it.

Harcourt was chosen over three other developers that submitted proposals for the site, including a local group, Uniting Creatives/Four Pillars and a high-profile Portland, Oregon-based developer, Williams & Dame.

The port’s executive director explained Harcourt’s experience with the Titanic Quarter, where it redeveloped large parts of Belfast’s docks and waterfront, was similar to what the authority was seeking for Bellingham. “We liked their proposal,” he said.

Officials from the port are scheduled to visit Belfast and Park West in Dublin to see Harcourt’s work first-hand.

However, the authority has come under fire for choosing Harcourt. A number of critics pointed out the Irish company has ended up in litigation over projects in Las Vegas and more recently, on Jersey.

Earlier this year, Harcourt told the island’s high court that it lost out on potential profits of €119 million when the Jersey Development Company dropped its contract for a development known as Esplanade Square.

The Jersey company said Harcourt failed to show it could bankroll the development, which consisted of up to 400 homes, as well as offices and shops.

Harcourt’s last available accounts show it had €70 million in net assets at the end of 2012. The developer had debts of €800 million, a proportion of which was due to the National Asset Management Agency .

The accounts state the loans due to the State agency were all secured against properties generating enough income to service those debts. Harcourt also said that it had renegotiated its Nama liabilities and expected to have repaid them by mid-2016.

Along with Titanic Quarter and Park West, Harcourt owns hotels in Antigua, London, Manchester, Jersey and Donegal, as well as shopping centres and industrial sites in the Republic.