Developers, Builders Lament ‘Missed Window’ with Building Moratorium in Birchfield

While a pair of Onalaska water districts remain entangled in a bureaucratic spiderweb, the ongoing stalemate is causing headaches for more than just public officials and newspaper reporters.

“We’re going to miss a window,” said Andy Alexander, standing inside of an under-construction house he’s trying to sell in the Fox Run subdivision. “We lost part of a building season, and we stand to lose another entire building season if (Water-Sewer Districts) 2 and 5 can’t get together and figure it out.

The plot is one of the lots Alexander purchased in Fox Run, the subdivision that’s part of the Birchfield development that makes up District 5. While the house on that lot is currently on track to finish construction and be sold, he owns four other lots where development is on hiatus due to an ongoing moratorium on building permits.

“The moratorium has stopped all development inside of Fox Run, which is where we own 100 percent of our lots,” Alexander said.

The moratorium, which has now dragged on for more than six months, was put in place by Lewis County after neighboring District 2 voided its agreement to provide sewer service for District 5. District 2 has refused to renew service until District 5 provides detailed financial records and resolves conflict-of-interest concerns.

Those concerns center around the fact that commissioner Virgil Fox — Birchfield’s creator and developer — is both a commissioner and creditor of District 5. The district owes him more than $200,000 for water infrastructure he sold to the agency.

Recently, Lewis County convened a meeting between the two districts, which made little headway toward resolving the stalemate. Meanwhile, those who own lots in Birchfield are stuck with property on which they can’t build.

“Every other week, I get someone who says, ‘This is awesome, let’s come out (and build),’” said Mike Ayers, who owns four lots in Birchfield and has built other homes in the community with his construction business. “And I say, ‘Well, I can’t.’”

Alexander and Ayers are a part of a group called Forward Fox Run, an informal collection of about 10 landowners, developers and builders who have been hurt by the moratorium. Greg Lund, a well-known realtor with Century 21, is one of its lead spokesmen, and he said he’s shocked the moratorium has dragged on this long.

“We thought this was basically just a misunderstanding, and it would be easily resolved,” he said. “We thought people would sit down rationally around the table and work this out. It’s been bizarre.”

According to Lund, at least five or six people have been ready to build houses in Birchfield, but have been stalled or moved onto other sites due to the moratorium. Not only has that hurt the developers, but it’s prevented sales and property tax revenue from being generated for the county, as well as the Onalaska school district and fire districts.

“People don’t like risk. A house is a big purchase,” said Larry McGee, another Forward Fox Run member. “My wife and I did not buy seven lots just for fun. We want to build nice houses and sell them.”

The issues leading to up to the moratorium are complex and date back years, starting with the long-running feud between Fox and fellow commissioner Deborah Hilliard. April Toups, the district’s third commissioner, resigned abruptly last week after less than a year on the job, leaving the longtime antagonists stalemated again.

Meanwhile, District 2’s demand that the conflict of interest be settled has led to calls for Fox’s resignation, which many see as the easiest solution. Forward Fox Run put out a proposal with Fox in mid-December that would have brokered his resignation, while altering the terms of the loan the district owes him. It would have slightly cut the loan and lowered monthly payments, while raising the interest rate. In the county-brokered meeting in late January, District 2 commissioners and Fox’s fellow District 5 commissioners said that proposal was a non-starter, as the loan negotiation was itself a conflict of interest.

To the developers, that outcome was frustrating, as they believe the proposal was put forward in good faith, but received no response until commissioners were pressed on it in a public meeting.

“If they didn’t like the interest rate, it was a starting point for a conversation that’s never happened,” Lund said.

Added Alexander: “Instead of responding, they demonized him for it.”

While the Forward Fox Run group doesn’t want to wade fully into the political fights that have enveloped the district, its members are largely sympathetic to Fox, who — despite the ongoing conflict of interest issue — they feel has tried to do his best to build a good community.

The narrative around Birchfield has largely been one of failure, a proposed 2,700-home community reduced to a 90-lot subdivision that currently has only about two dozen homes. But Lund said the bounceback of the economy has finally brought momentum to the area, one of the few places in Lewis County where so much development opportunity is available.

“We’re breaking ground as soon as the county can give us a permit,” he said. “I’m negotiating an offer on the other side of the street. Things are happening, and people are buying and there’s activity.”

The group is frustrated that the moratorium stifling that momentum has been imposed not because of a system failure, but because of bureaucratic disagreement.

“This is a politically driven moratorium,” McGee said. “It’s not driven by engineering factors. So it’s very frustrating.”

Despite irritation with the districts, the group’s members credited Lewis County leaders for their attempts to end the spat and broker an agreement. Forward Fox Run also asserted that the district’s infrastructure is in good shape, despite some concerns to the contrary. Fox — the developer and commissioner at the center of the controversy — offered a tour Thursday of the district’s water and sewer pumping stations, at the behest of the developers. Fox declined to comment on “political” matters.

The developers say just allowing them to build could go a long way toward resolving the district’s financial issues. Lund said that he’s secured commitments for at least eight new connections if the moratorium is lifted, which would allow the district to collect nearly $50,000 in hookup fees.

Ayers, meanwhile, said District 2’s refusal to provide new sewer hookups is unprecedented to him as a builder.

“I’ve never ever in any situation, working with different counties, communities, different water-sewer, different building departments, had it more difficult to give people money for service,” he said. “I’m like, ‘Tell me how much for the hookup, I’ll write you the check today.’ … They’re like, ‘Oh no, we can’t do that.’”

To District 2, the conflict-of-interest concerns remain the impediment, overshadowing issues of lost revenue or stalled development.

“District 5 has a commissioner who has continued to engage in ethics codes violations of Washington for 15 years and continues to do that,” District 2 commissioner Kevin Emerson said in the January meeting between the districts. “We have a moral responsibility to the people we represent to abstain from engaging in ethics violations.”

The Forward Fox Run group doesn’t find that argument so convincing, noting that District 2 was in business with District 5 for years while Fox’s issues were well-documented. And they believe that Fox’s desire to stay stems from his passion to make sure Birchfield is successful.

“You think — just resign — but this is his baby,” Lund said. “He has put so much investment and a vision, and he really truly looks at this and says, ‘If I step down, I want some assurance that the moratorium is going to be lifted.’”

McGee called Fox “a friend I really care about,” saying that he just wanted to make sure the system was taken care of for the residents of Birchfield.

Meanwhile, Ayers added that Fox’s “heart is in it more than comes across.” Still, he said, Fox isn’t the only one suffering from the ongoing moratorium.

“We’ve all got our butts out here in one way or another, and it’s not just Virgil,” he said.