Two senators have asked the acting state auditor to investigate the Commissioner of Public Lands for an “artificially low” deal with the Navy restricting shoreline development in the Hood Canal.

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Two Washington state senators have asked the acting state auditor to investigate Commissioner of Public Lands Peter Goldmark for an “artificially low” deal with the Navy restricting shoreline development in the Hood Canal.

State Sen. Tim Sheldon, D-Potlatch, in a letter to Acting State Auditor Jan Jutte Thursday, wrote: “As reported by The Times, Commissioner Goldmark agreed to an artificially low price on a lease of state aquatic bedlands in the Hood Canal.”

State Sen. Mark Miloscia, R-Federal Way, also signed the letter.

In June, The Seattle Times reported that Goldmark’s Department of Natural Resources (DNR) accepted a $720,000 offer in 2014 from the Navy for 50-year control of 4,804 acres of Hood Canal seafloor.

But an earlier, independent, state-approved appraisal valued the lease at $1.68 million.

The $720,000 value allowed the Navy to avoid congressional scrutiny of the deal. Goldmark agreed to that price despite state law requiring DNR obtain fair-market value for the seafloor.

“That’s corruption,” said Miloscia, chair of the senate’s Accountability and Reform Committee. Formerly an Air Force contract officer who dealt with appraisals, he said reducing the earlier appraisal to “avoid federal statute … is, in my mind, unconscionable.”

On Friday, Sandra Kaiser, a DNR spokeswoman, said the state’s appraisal practices were upheld by a Jefferson County Superior Court judge.

If the auditor doesn’t investigate, Miloscia said, his committee will.

Thorndyke Resource, developer of a pier project on the Hood Canal’s western shoreline, sued the state and Navy to overturn the lease, which created a restriction along Hood Canal seafloor that stopped the pier project.

Times reporting showed the Navy has quietly targeted projects, rating them according to perceived threat level. Meanwhile, area developers say they were unaware their work was being monitored.

The Navy cited multiple development proposals as “encroachment threats,” including the pier project, within its “sphere of influence.” The military suggested commercial boating, seaplanes and tourism could hamper the military’s operations in the interest of “national defense.”

“I’m worried that the historic uses of our shoreline and waterways will be harmed by these unilateral actions by the commissioner’s office,” Sheldon said. “The commissioner’s job is to adhere to all the duties of the constitution.

“I think that includes getting a fair price for something.”


In June, the Navy and DNR told The Times they could not comment on the appraisal because of pending litigation.

The Jefferson County judge wrote that the appraisal was not “arbitrary, capricious or unlawful” when she dismissed a case against the state in May.

Thorndyke has appealed that decision to the Washington State Court of Appeals.

“It’s a factual issue and could not be resolved on summary judgment” the way the judge did, said Svend Brandt-Erichsen, Thorndyke’s attorney. “It’s been frustrating to not get to the merits, to actually have the actions taken by the Navy and the DNR reviewed.”