It’s taken some 36 years, but it appears the city and the state are closing in on a deal involving an acre of land located on the northwest corner of the Washington State Ferries’ Eagle Harbor maintenance yard.

Negotiations between the city and WSF will continue next week after the state agency appears to have made another concession Wednesday.

The latest development may lead the city to having two viable choices – either an extended lease on the property or a $2 million cash settlement – for the community to consider.

The initial settlement offers, made to city officials last month by WSF chief David Moseley, were clarified further this week during email exchanges between Interim City Manager Brenda Bauer and Moseley.

Bauer said during Wednesday’s council meeting that Moseley informed her while answering several queries from her that the state will be willing to renegotiate the 20-year lease agreement with the city.

The lease agreement was reached in 1995 and will expire in 2015, but Bauer said it appears the state is willing to extend it if the city decides it wants to accept the land as a settlement.

“I received an email at 4:22 p.m. from Moseley who said that after a conversation with a state representative,” Bauer said, “if the community wants to negotiate beyond 2015 we should start immediately [because] he is willing to negotiate for a longer lease.”

After considerable discussion, the council agreed that the lease negotiations should start with at least a 20-year agreement as the baseline in order to attract serious potential business operators to the property.

The lengthy squabble between the two public agencies began in 1974 when the State Shoreline Board gave two and one-half acres to the city as a condition for Harbor View Condos being built. In 1995, WSDOT exercised its power of eminent domain to condemn the acre of land that it had leased to a private boatyard operator.

There have been a couple of failed attempts to have the property used again as a haul-out facility, most recently in 2006.

Ironically, there is a degree of urgency regarding the latest settlement offer because of the state’s economic crisis, especially if the city decides to accept the cash and not the land. It would be wise, Bauer and the council agreed, for the city to make its decision by the end of next month so the state could complete its part of the deal by the end of the year.

The city also wants to have community member weigh in on both options and have scheduled two 7 p.m. public meetings in Council Chambers later this month. On Sept. 27, the meeting will center on maritime uses that could be seeded by the $2 million settlement; on Sept. 28, ideas and proposals for use of the land will be aired.

“The process has already begun with a lot of interest shown by the public,” said council member Barry Peters. “And we should encourage citizens to let us know their ideas and proposals.”

Meanwhile, Bauer, after discussions with the council’s ad hoc committee (Lester and Mayor Bob Scales) on the issue, will renew contact with Moseley in an attempt to clarify WSF’s two settlement offers. The goal is to solidify the options and address several issues, such as any problems the presence of the Wyckoff Superfund Site in the area may cause, so that when they are presented during the meetings the public will understand the criteria and parameters for each.

Councilor Debbi Lester, who has been actively attempting to get WSF to return the leased land to the community for several years, said the city needs to get the state’s offers in writing, preferably before the community meetings.

“We need to know what strings are tied to both the money and lease options and then get them in writing,” she said.

Bauer said Moseley indicated that if the city accepts the $2 million buyout the city would have to release any claims to the lease and agree to use the money for only water-related uses.

Most members of the council have said it’s important to keep an open mind on the two options in order make a decision that reflects the public’s interests. But the issue has been around long enough for residents to have strong opinions about it.

For example, Lester has indicated her preference for a haul-out facility on the land, while Peters has said several times that the $2 millions might be best served by creating a city marina with 20 or 30 boat slips in an effort to encourage visits by boaters.