The City Council decided to take $2 million and cut itself out of a muddy legal dispute over the land in the Washington State Ferry Maintenance Facility in Eagle Harbor.

Councilors Barry Peters, Bob Scales, Bill Knobloch and Kim Brackett voted for the cash settlement instead of the offer to lease the 0.9-acre west of the maintenance yard.

The decision is shackled with over 30 years of history, legal settlements, and months of negotiation to resolve a 15-year-old memorandum of agreement (MOA) between the city and WSF.

By taking the money, the city is agreeing to waive any rights to the land, which lease proponents had sought to be used as a boat haulout facility. The money doesn’t have to be used for a water-based project, though a plan to upgrade the city’s dock off Waterfront Park was the only proposal for the money made public during negotiations.

The agreement will “resolve all actual and potential claims between the City and WSDOT arising in any way out of the MOA and a 1975 Declaration of Covenants … in lieu of WSDOT performing the project activities referenced WSDOT will transmit two million dollars to the city.”

The 1974 Shoreline Hearing Board decision declared a covenant that the land will be used for marine industrial use, intended for a community accessible boatyard. The MOA reflected that both WSDOT and the city understood the strong desire within the local community for a private or commercial site like a boatyard.

Councilor Debbi Lester said she was shocked to see the 1974 language in the agreement since WSF Assistant Secretary David Moseley had repeatedly stated the offer was to settle the 1995 MOA only.

“All along WSF didn’t acknowledge the 1974 decision and then it shows up in the contract,” said Lester. “You should know what you are giving up and that wasn’t what we were intending to give up. I didn’t want to be bought out, but I was only one of three council members.”

She said that the council didn’t see the agreement document until a few hours before Wednesday’s meeting. Her concern was that the public wasn’t able to review the document before it became part of the decision, which threatens transparency.

Elise Wright, a representative of the group (Bainbridge Island Concerned Citizens) that fought for the 1974 covenant, said she was frustrated the council took a vote to give up rights that belong to the community.

“My concern is that WSF can go back to the Shoreline Hearing Board to rescind the covenant, since the City of Bainbridge Island expressed it has no more interest in a boatyard,” said Wright. “In spite of all of the public comment and input, the city is representing itself as saying a boatyard is not what this city wants.”

BICC has sought legal advice from an attorney, Wright said, but has not made a decision on taking action to enforce the 1974 covenants.

She said it would be unfair to ask BICC to step up after all these years, and wished the city would have stood up for the covenants that are still pertinent.

Councilors Hilary Franz and Kirsten Hytopoulos decided the most equitable decision was to choose neither the cash nor land.

“I think the appropriate decision is to do neither because this is an outstanding wound for the community,” said Hytopoulos. “On behalf of the community, my question is whether the $2 million can actually settle that issue for the community.”

Scales said he wasn’t willing to put the city at risk of leasing to a private operator, and thought the money is a greater benefit than doing nothing.

Knobloch felt the site carried too many risks and the city should use the money as a capital asset for the benefit of the community – not to be placed in the general fund.

Peters has long been an advocate to use the $2 million for a community benefit, and felt the footprint provided by WSF isn’t feasible for a boatyard.