DNR Tideland Leases: Who is managing who?

Arcadia Point Seafood: 2006 - Our offer is equal to 20%.
Arcadia Point Seafood: 2013 -We'll offer you 15% for a
far more convenient parcel, near home and existing farms.

DNR: 2015 - How about 10.25%?
Okay.

~1 acre of state owned tidelands

planted with geoduck and no lease.

Settlement in 2010: $192,000

Harvest value in 2014: ~$1,300,000

(click to enlarge)

I never promised you a shellfish garden, but thanks for the roses.
A recent document request has provided Arcadia Point Seafood's lease proposal from DNR for tidelands in Mason County it and Seattle Shellfish were found to have been trespassing on in 2009. According to statements in applications, it may have been going on since 1988 but because of how statutes in Washington are written, all the state could collect on was activity which had occurred in the prior three years. Growers kept revenues from perhaps as many 3 harvest cycles. For encroachment on 1.2 acres, Arcadia Point Seafood and Seattle Shellfish settled with the state for $192,000 (be patient - DNR's servers are slow). They were allowed to retain possession of their geoduck planted on a bit more than 1 acre, which with geoduck at or above $14/pound, resulted in an estimated $1,300,000 at harvest (see below for how APS estimates their harvest amounts from tidelands). A complete survey of the area having been trespassed on may be found here.

Tidelands Arcadia Point Seafood

was responsive to. 

Will you respond to my offer?

In 2006, prior to the discovery of trespassing on state tidelands, Arcadia Point Seafood participated in "requests for offers to lease" tidelands for growing geoduck from DNR. Responses to those requests included Taylor Shellfish with Kent Kingman, Discovery Bay Shellfish, Seattle Shellfish, and Arcadia Point Seafood, among others. In 2007 a second request was made by DNR. (The 2006 maps may be found here and the 2007 maps here.) Arcadia Point Seafood was the successful "responder" to the proposal on Dickenson Point. 

Thurston County: You almost made it. Mason County: Don't worry about it.

In 2008 APS began seeking out other leases in the Dickenson Point area, being successful with the Thiesens and McClures, the former being adjacent to the north line of the state tidelands. It was a long process with many objecting to the industrial operations, some believing they did not fit in with the residential character of the area. But APS and Taylor Shellfish had money, motivation, and knew how to spend it in the right places. Those permits, while granted, resulted in the Shorelines Hearings Board noting "...it was a very close call.." on requiring a cumulative impacts analysis and Thurston County's  commissioners noting: "The Board shares many of the Coalition's concerns...about the impacts of geoduck aquaculture on the shorelines of Thurston County". It is far different than in Mason County where geoduck farming needs no permit at all. In fact, they have recently leased almost 20 acres of tidelands to Seattle Shellfish, being told they will receive an estimated $3 million from the lease. Maybe.

DNR - "You've won."

Arcadia - "Never mind. I have a better idea."
(and guess which county it's in)

Remind me of what I said in 2006 again?

In the successful response of APS they were seemingly more than generous, and made a point to show how much so. In their "Cost Proposal" they estimated the state would be receiving an estimated 20% of the "gross wholesale revenue" (see above image for their calculations). APS estimated from 40,000 square feet they would be harvesting 90,000 pounds (1.5 geoduck per square foot *40,000 * 1.5 pounds each). (The full response from APS may be found here.)

Seasons change and so did I, you need not wonder why. 
In 2013, seven  years later, after their harvest under the lucrative settlement with the state was complete, APS was contacted by DNR. Along with the other successful "responders" they were asked how they felt about executing on their proposal. APS, realizing the opportunity presented by locking up the contiguous state tidelands with those they already had under lease from private tideland owners, less than 300' from the owner's home, in Mason County where no permit would be needed, had a different response than the others. From notes taken by DNR their change in heart is explained, as well as their offer:

Arcadia Seafood requests the Dickenson Point site be put on hold due to local controversy, and ongoing work of the County Shoreline Hearings Board.  Arcadia point does want to lease this site "in a year or so," but feel "now is not the time."   They would consider to lease an alternate site at Arcadia Point.  The Arcadia site is part of an ownership dispute between Arcadia Point Seafood and DNR that was resolved by settlement agreement.  The site is located at Arcadia Point and fronts the proponents upland property.  Arcadia has indicated, if DNR decides it will only lease one site or the other Arcadia Point Seafood would prefer to farm the Dickenson Point site.  Regarding the lease term, Arcadia is concerned the 10 year lease will only supports a single crop cycle.  For the Dickenson Point site, the proponent proposes rent be amended from 12% of gross and $1,200 per/ac/yr. base rent to 10% and $1,000/ac/yr.  For their private leases, Arcadia pays 15% for multi cycle leases and 10% for single cycle leases; cost of managing single cycle leases is more and there for the royalty to the landowner is less.  Also, in Thurston County, cost and scope of permitting is more difficult than Mason County.  Arcadia proposes a 15% rate at the Arcadia Point site.  Also, Arcadia Point Seafood wishes to review DNR's current BMP's before agreeing to a lease.

DNR: We know you offered 15% but will you take 10.25%?

APS: You drive a hard bargain, and my wife won't be happy, but okay.

In 2015, DNR has suggested a different rate. A lower rate. On May 15 they sent their proposal to APS which included the new, lower rate. (The complete proposal sent to APS may be found here.)

SECTION 4 RENT

4.1 Annual Minimum Base Rent. Tenant shall pay to State the annual minimum base rent in the amount of One Thousand Two Hundred and Twenty Three Dollars ($1,223.00). The annual minimum base rent shall be due and payable in full on or before the Commencement Date and on or before the same date of each year thereafter. In addition to the annual minimum base rent, Tenant shall also pay a production based rent as detailed in Section 4.2, below.

4.2 Geoduck Rent Adjustment.(a) Production Based Rent. When the Tenant commences harvest of cultured geoduck, Tenant shall pay to State, in addition to the annual minimum base rent, a quarterly Production Based Rent. The Production Based Rent shall be computed as follows: the total quarterly volume of geoduck harvested in pounds multiplied by the current average wholesale price per pound, multiplied by the royalty rate of Ten point twenty five percent (10.25%) percent.(b) Quarterly Reports and payment of Production Based Rent. At the same time Tenant submits its quarterly aquaculture production report to the Washington State Department of Fish and Wildlife, Tenant shall submit a copy of the same report to State along with the Production Based Rent as calculated in Section 4.2(a). The quarterly aquaculture production report must include the poundage or other unit of measure and price received for geoduck harvested and sold. If Tenant makes no sales in any quarter, Tenant shall so report.

Commissioner Goldmark did not promise the shellfish industry a shellfish garden. 

Peter Goldmark was elected as the Commissioner of Public Lands in 2008 due, in part, to perceived pressures from the shellfish industry to turn over the few remaining public tidelands there are for them to grow geoduck on. In 2015, as election time ramps up, once again the shellfish industry is pressing the Commissioner directly, and indirectly through politicians, to do what people did not want in 2008 - turn those tidelands into geoduck farms, locking the public out. Commissioner Goldmark never promised the shellfish industry a shellfish garden. Especially one the state only receives 10.25% from.