CRESCENT BAR – The Grant County PUD announced last week that its board of commissioners will approve this Tuesday, Feb. 21, a plan that will lead to higher rents for residents and businesses on the island.

So far, the news has only added fuel to the controversy that has engulfed the island for the past couple of years. The other two parties involved in the leases have said they will not consider new rents without long-term leases.

The residents have even indicated this may lead to legal action in addition to that which is pending.

Crescent Bar Island is property of the federal government and is managed by the PUD as part of the operation of Wanapum Dam. In 1962 it signed a lease with the POQ so that the island might be developed for recreational use.

The POQ sub-leased the land to developer Fred Peterson, but not before doing some development of its own, such as the marina and the buildings that make up a small commercial district. Eventually the sub-lease ended up in the hands of Crescent Bar Inc.

Peterson developed the island for residential use, with two park model trailer parks and one condominium complex. CBI continued where Peterson left off. The result was about 400 permanent residences as the lease to the POQ was nearing its end.

When the PUD announced the POQ and the residents would have to leave at the end of the lease (March 31 for the residents, May 31 for the POQ), the POQ made plans to leave.

The residents did not. They dug in their heels and have been fighting ever since. The PUD would not consider a new long-term lease with anyone, and the residents filed a lawsuit against the PUD in federal court in Spokane.

That case has been dragging along slowly, with delay after delay. Judge Justin L. Quackenbush has scheduled a hearing, supposedly to hear arguments, on March 19, just 12 days short of the residents' deadline.

According to publicist Sarah Morford of the PUD, the commissioners have planned their Tuesday action as a contingency. They apparently suspect Quackebush will not order the residents off the island with such a short period to vacate.

Quackenbush has been sympathetic to the residents' cause so far, starting with the proclamation that they have a case for damages, if nothing else.

Morford said Tuesday's commissioner vote will authorize staff to seek an independent appraiser to help determine fair market rents to the residents. Then PUD staff will go to the POQ and announce the change.

Hold on, POQ commission President Curt Morris said last week. The POQ has no deal with the PUD after May 31, and he recalled that the PUD “told us to get out.”

In addition, Morris said there has been no communication between the PUD and the POQ. The first he heard of new rents was in a newspaper account.

Morris said the POQ is always interested in projects that could benefit the POQ, even Crescent Bar. But, he added, there will be no interest in Crescent Bar without a new long-term lease.

Morford said the PUD believes the POQ will have no choice if Quackenbush continues the litigation forward after the 19th. The POQ will likely be lumped in with everybody else.

Maybe so, Morris said, but he does not believe the judge or the PUD can make the POQ pay more without a new deal. If the judge keeps all the current players in the case, Morris believes, it will be “as is,” with the PUD unable to do anything.

Meanwhile, the legal team for the residents, through a letter from the Crescent Bar Lease Committee, is saying the residents don't have to pay a thing more than they are paying now. They don't have a deal either.

And, according to the legal team, the sub-lease from the POQ to the CBI holds CBI harmless for any rate increase between the PUD and the POQ.

“This arrangement continues through the 2023 term if the 1979 lease is extended that far,” the legal team told residents last week.

The residents have contended all along that CBI had a deal with the POQ and PUD through 2023. Quackenbush has said legal documents appear to bear that out.

The residents claim, in their lawsuit, that agents of the PUD promised leases until 2052. Quackenbush has said it appears promises were made.

Last week, Morris brought up the 2023 year. He said the POQ may be interested in a new deal if it extends that far. It would be more interested if it extended to 2052.

But there's a catch. The money the PUD wants “would have to be right.” He said the POQ won't make any deal it doesn't believe the residents will support on the other end.

Some of those residents live on social security only.

As things stand now, the legal team believes the residents don't have to support any increase. If the PUD presses, the legal team said, the residents will file a motion for a summary judgment “in our favor on the Port's obligation to extend our current lease, on the same terms, until 2023.”

The way Morris sees things, the PUD will get nowhere by setting new rents on its own. He said a three-way negotiation between the PUD, the POQ and the residents for a new lease agreement is probably the way to go.

The legal team agrees. That's what the residents asked for in the first place.

“Of course, we are willing to sit down at the table with the Port and the PUD and discuss our pending motions and overall case,” the committee wrote to the residents. “We are serious about trying to settle the case but will not agree to an increase in rent unless the PUD and Port are willing to negotiate an extension of our lease.”

In December, the three home owner associations on the island formed a holding company that bought CBI. Now the PUD leases to the POQ, which leases to the CBI (the residents), which leases to the residents.

Before the legal action began, the residents offered the PUD a deal that would raise rents to a total of $1 million a year in exchange for an extension. The rent total is nowhere near that now, with some residents paying as little as $34 to live on the island.