Malaga standoff continues as Smith clashes with Port over ILA signing

WENATCHEE — A brief but pointed exchange at the Chelan-Douglas Regional Port Authority meeting on March 24 underscored the continuing stalemate between the Port and Chelan County over a proposed interlocal agreement tied to the Malaga tax increment area — and revealed a growing strain between the two agencies.

Chelan County Commissioner Shon Smith appeared during the public comment period, accompanied by county public information officer Jill FitzSimmons, who recorded his remarks on a cellphone from across the room. Smith was not listed on the agenda.

It marked the second time in recent months that Smith has addressed the Port directly on the issue. In January, he delivered what he described as a “wet copy” of the agreement for consideration. At that time, Port commissioners responded that they had not yet reviewed the document.

On March 24, Smith returned with a direct question: whether the Chelan-Douglas Regional Port Authority intended to sign the agreement, which Chelan County commissioners have already approved.

Smith laid out his observed timeline of the agreement’s development and said nearly two months had passed without a response after the county signed and returned it.

“I think the county’s hand is still extended,” Smith said, describing the agreement as something both sides had worked toward and presented publicly.

Port commissioners did not dispute the timeline but said it was incomplete.

Commissioner JC Baldwin responded that the Port had been prepared to act on the agreement earlier this year, but paused after additional legal action involving the county.

“One thing in your timeline that you forgot to mention,” Baldwin said, “was the day we were set in our meeting to sign your ILA… you slapped us with another lawsuit.”

Ward Media confirmed at that time that a new lawsuit had been filed, listing Chelan and Douglas Counties and the Wenatchee Valley Fire Department as plaintiffs against both the individual Ports and the combined Regional Port Authority.

That secondary lawsuit, which you can read here, holds many of the same claims the County attempted to use in their defense when the Port sought and won an injunction in November against the moratorium the County tried to place on the creation of TIF areas.

In December, the court rejected the County’s motion for reconsideration, even accompanying that judgment with a letter written by Judge Brian Huber specifically addressing an inflammatory claim by the County that he personally had given a “judicial stamp of approval” to the TIF and rejecting that characterization.

Baldwin said the Port has since remained in a holding pattern, waiting for those legal challenges to be resolved before moving forward.

Another commissioner reinforced that position more directly. Commissioner Donn Etherington listed specific conditions previously communicated to the County, including dismissal of ongoing litigation and related actions.

“Until those issues are done,” Etherington said, “there’s no basis to have a conversation to move forward on the ILA.”

Smith responded that Chelan County’s participation in litigation was intended to preserve its legal position, not undermine negotiations, and pointed to language in the agreement indicating the county would dismiss its claims after execution.

The exchange highlighted a fundamental disagreement: whether legal challenges should be resolved before or after the agreement is signed.

For the Port, entering into a revenue-sharing agreement while the underlying tax increment area remains under legal challenge presents a risk and even a quandary: Why would they enter into a governance agreement regarding something that one side thinks should not exist?

For the County, dismissing those challenges before an agreement is finalized would remove what it views as necessary protections. But the protections that would be removed are only those that it says it would drop anyway if the Port were to just sign the ILA.

The discussion remained measured, but the tension in the room was evident as both sides reiterated positions that have been publicly stated for weeks.

Smith and FitzSimmons left the meeting immediately following the exchange, and the discussion did not continue.

Later that day, Chelan County posted the video recorded by FitzSimmons of Smith’s remarks on social media, reiterating its position that the Port has declined to sign the agreement and disputing the Port’s characterization of the legal timeline.

The Port has not yet indicated when it may revisit the agreement, though commissioners said the issue would be discussed further in executive session.

Andrew Simpson: 509-433-7626 or andrew@ward.media