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additional acres in the Port Ludlow area were available for
future development.13 Facilities at the Port Ludlow community
include a marina, a full-service restaurant, a convention center,
a sales office, and an 18-hole golf course. In 1985, Village
Resorts, Inc., a resort management company, leased these
facilities. The property transferred to the Partnership remained
subject to this lease.
By 1984, the wastewater treatment plant at Port Ludlow was
operating well in excess of capacity. The Department of Ecology
imposed a moratorium on new sewer hookups until certain interim
improvements were made and an expansion plan was approved. The
Department of Ecology dropped the moratorium in May 1985;
however, sales of petitioner’s existing lots were still not
permitted until expansion of the sewer was completed. In 1985,
petitioner estimated that the expansion project would be
completed by the end of 1988 at a cost of between $2 and $5
million. Phase I of the sewer expansion project was completed in
1989 at a cost of approximately $2.5 million.
As a result of the sewer problems, Port Ludlow experienced
heavy financial losses and was forced to close the resort during
the winter of 1984-1985.
13The 2,500 acres of undeveloped property were not appraised
by the parties’ experts in connection with the Port Ludlow
community. Instead, this property was valued either as
timberland or development property, which was previously
discussed.
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