Port of Bellingham sues waterfront developer after contract defaults, extension requests

The Port of Bellingham filed a lawsuit against Harcourt Developments, the company responsible for constructing three unfinished multi-million-dollar residential condo buildings along Bellingham’s waterfront.

The company defaulted on its development contract, known as the Master Development Agreement (MDA), according to port officials. Harcourt then asked for an extension of its development timeline, which the port denied due to the notice of default.

Harcourt Developments, a Dublin, Ireland-based development company, has not responded to repeated requests for comment from The Herald. But in a letter sent to the port from Harcourt on Nov. 2 responding to the notice of default, Harcourt denied the port’s findings.

A rendering shows the expected design of the luxury Waterfront Living condos in Bellingham, Wash. The first two buildings were expected to be completed by the end of 2023 but the developer defaulted on its contract.
A rendering shows the expected design of the luxury Waterfront Living condos in Bellingham, Wash. The first two buildings were expected to be completed by the end of 2023 but the developer defaulted on its contract.

“A controversy exists between the Port and Harcourt as to whether (i) Harcourt is in default under the Restated MDA; and (ii) Harcourt’s default excuses the Port’s performance under the Restated MDA, including, without limitation, the Port’s denial of Harcourt’s request for Master Development Schedule extension,” the lawsuit states.

The lawsuit is now seeking declaratory judgment and attorney’s fees from the court.

“Based on the status of default and Harcourt’s failure to meet the schedule they provided in the restated and amended MDA in 2021, the Port denied Harcourt’s extension request. The Port is currently seeking a ruling from Whatcom County Superior Court as to the reasonableness of the Port’s denial of that request in light of Harcourt’s default,” Port of Bellingham spokesperson Mike Hogan said in a statement to The Herald.

One of the unfinished apartment buildings as seen on Nov. 3, 2023, on the Bellingham waterfront.
One of the unfinished apartment buildings as seen on Nov. 3, 2023, on the Bellingham waterfront.

The port notified Harcourt on Oct. 20, 2023, that the company was found to be in eight individual contractual defaults, including failure to complete its first two residential buildings within the contract’s timeline and violation of required environmental standards.

Harcourt was originally selected in 2015 as the lead developer for about 19 acres of the Waterfront District but has lost future development rights for additional property there as a result of the defaults. The company was expected to complete its three residential buildings by the end of 2023, but now has no timeline for completion.

One of the unfinished apartment buildings as seen on Nov. 3, 2023, on the Bellingham waterfront.
One of the unfinished apartment buildings as seen on Nov. 3, 2023, on the Bellingham waterfront.

“Moving forward, the Port will focus on working with local developers to redevelop the historic Boardmill Building into a boutique hotel and conference center and Phase 2 of the Millworks affordable housing project,” Hogan said in a statement. “The Port will also expand The Portal container village in 2024 and continue to improve public access to the water and further activate the downtown waterfront with bigger and better events.”

Harcourt’s first project in the Waterfront District involved the purchase and renovation of the Granary Building site. Then, in 2018, the company purchased two additional acres of land near the Granary Building to construct the three luxury condo buildings. Their initial development agreement with the Port was previously restated and amended in 2021 to reflect the impacts of the COVID-19 pandemic after Harcourt did not meet the originally agreed-upon timing and performance requirements for development.