Hospital to sell Bayview property with odd history

The property has dropped significantly in value since its purchase 13 years ago.

Officials at the cash-strapped WhidbeyHealth Public Hospital District are planning to sell a piece of property in Bayview with a strange and controversial history.

The 4.56 acres of undeveloped land that the hospital purchased 13 years ago for nearly $2 million currently has an assessed value of just $150,000, though officials aim to get much more.

The hope is that funds from the sale will offset the cost of the hospital district’s recent purchase of a $750,000 property adjacent to the hospital in Coupeville, according to Conor O’Brien, community relations director for the district.

“It’s one of the things we are looking at as part of our financial strategy as we try to recover,” O’Brien said, adding that officials are looking at a range of options for cutting property-related costs.

On Wednesday, the hospital district board of commissioners voted to make surplus the Bayview parcel, which is zoned as “rural center.” Designating the property, located on Highway 525, as surplus is the first step in selling the property.

The history of the district’s ownership of the property is nebulous.

O’Brien said hospital leaders don’t know why the parcel was purchased in 2008. Nobody who was in the administration at that time still works for the hospital, so there’s nobody who can explain, he said.

A 2014, a South Whidbey Record story reported that the property was purchased without an appraisal, which state officials said was legal but of questionable wisdom. The assessed property value at the time was $600,000, but the district purchased it from Verlane Gabelein for $1.98 million.

A county official said it was purchased without a soil test, which is vital in determining the value of a property in areas without sewer systems.

A hospital spokesperson in 2014 said the property was initially intended to be the site of a hospital clinic relocated from Clinton, but that never happened.

Since its purchase, the assessed value of the property tanked. It dropped to $500,000 in 2016 and then suddenly to $130,000 in 2018. The value edged up to $150,000 in 2020.

Island County Chief Deputy Assessor Jason Joiner pointed out that the district purchased the property at the height of the real estate market, just before the big crash.

The sudden drop in assessed value in 2018 was because the land is being assessed as a regular residential property instead of commercial land, which is more valuable because it can accommodate intense non-residential and mixed-use development, Joiner said.

That likely happened, he said, because there hadn’t been any sales of comparable, rural-center-zoned parcels to base the assessed value on.

Joiner opined that it’s a currently a good time to sell property, and the hospital may get a good price for it.

The property, which is across the highway from the Goose Grocer, is next to the area where the nonprofit group Goosefoot Community Fund and community partners are hoping to develop an affordable housing project.

While O’Brien said expanding the housing project would be a great use for the property, it appears unlikely Goosefoot would be able to afford the purchase.

“Goosefoot would certainly be interested in this property for our workforce housing efforts, but we also understand the hospital’s need to maximize their resources at this time,” said Sandy Whiting, executive director of Goosefoot.

“If there are any housing advocates out there with the resources to purchase this property, please contact Goosefoot,” Whiting said.

As for the property in Coupeville, the hospital doesn’t have any immediate plans for it, though the hospital’s long-range master plan discusses future expansion, O’Brien said.

The hospital purchased it from long-term-care facility Regency Coupeville, which was formerly Careage of Whidbey.

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