CASCADIA STATE INFRASTRUCTURE AUTHORITY 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501 Telephone: (360) 407-8200 Facsimile: (360) 407-8201 www.csia.wa.gov
April 21, 2025
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND FIRST-CLASS U.S. MAIL
Mr. Garrett Dunlap, President Dunlap Creek Ranch Inc. 18500 Guide Meridian Road Lynden, WA 98264
Re: Good-Faith Offer for Acquisition of Permanent and Temporary Easements — Regional Flood Resilience and Stormwater Management Program, Lower Nooksack Pump Station Network
CSIA Capital Project Number: CP-2025-NPS-004 Affected Parcels: Whatcom County Parcel Nos. 380220-108400 and 380220-108401
Dear Mr. Dunlap:
1. Introduction and Statutory Authority
This letter constitutes a formal good-faith offer from the Cascadia State Infrastructure Authority ("CSIA"), a Washington State governmental instrumentality created pursuant to Chapter 43.99N of the Revised Code of Washington ("RCW"), to acquire certain permanent and temporary easement interests in real property owned by Dunlap Creek Ranch Inc., a Washington S-corporation ("Dunlap Creek" or "Owner"). CSIA is writing to you in your capacity as President of Dunlap Creek and the authorized representative of the Owner with respect to the parcels of real property identified herein.
This offer is made in full compliance with the requirements of RCW Chapter 8.25 (the Uniform Condemnation Procedures Act) and all applicable provisions of Washington State eminent domain law governing good-faith offers for the acquisition of real property interests by public entities. CSIA has endeavored to ensure that this letter and the accompanying materials satisfy all statutory notice and procedural requirements, and that the offer of compensation set forth below reflects the fair market value of the easement interests sought, as established by an independent, professionally prepared appraisal.
CSIA is the governmental instrumentality vested with condemnation authority pursuant to Chapter 43.99N RCW for the purpose of acquiring property interests necessary for regional water, wastewater, and stormwater infrastructure within the State of Washington. CSIA exercises this authority in furtherance of the public health, safety, and welfare of the communities it serves, and in accordance with the constitutional protections afforded to private property owners under Article I, Section 16 of the Washington State Constitution and the Fifth and Fourteenth Amendments to the United States Constitution.
Notwithstanding its statutory authority to acquire property interests through eminent domain, CSIA's strong and abiding preference is to acquire the needed easement interests through voluntary negotiation with affected property owners. This letter is intended to initiate good-faith negotiations with Dunlap Creek toward that end. CSIA is committed to working cooperatively and transparently with you and your representatives to reach a mutually acceptable agreement that fairly compensates Dunlap Creek for the property interests required by the Project described below, while respecting the ongoing agricultural operations on your property.
This offer letter was prepared by CSIA's outside counsel, Calderwood & Harkness LLP, with offices at 999 Second Avenue, Suite 4200, Seattle, Washington 98104, on behalf of CSIA and at the direction of CSIA's Executive Director, Martin R. Calloway. All inquiries regarding the legal aspects of this offer may be directed to Angela Fontaine, the responsible partner at Calderwood & Harkness LLP, whose contact information is set forth at the conclusion of this letter.
2. Project Description
The project for which CSIA seeks to acquire easement interests on Dunlap Creek's property is the Regional Flood Resilience and Stormwater Management Program — Lower Nooksack Pump Station Network (the "Project"), designated as CSIA Capital Project Number CP-2025-NPS-004.
The general scope of the Project involves the design, construction, and long-term operation of a network of four (4) pump stations situated along the Lower Nooksack River corridor in Whatcom County, Washington. The four pump stations will be connected by approximately 6.2 miles of 24-inch and 36-inch high-density polyethylene ("HDPE") force-main pipeline to the existing Nooksack Regional Wastewater Treatment Plant outfall. Together, the pump station network and force-main pipeline system will provide critical flood resilience and stormwater management capacity for the Lower Nooksack corridor, an area that has experienced significant and recurring flooding events in recent years that have caused substantial damage to agricultural lands, residential properties, transportation infrastructure, and public utilities.
The total estimated capital cost of the Project is Forty-Eight Million Dollars ($48,000,000). The Project is funded through two principal sources. The first source is a Washington State Capital Appropriation enacted through Senate Bill 5140 during the 2025 legislative session, which provides Thirty-One Million Two Hundred Thousand Dollars ($31,200,000), representing approximately sixty-five percent (65%) of total Project costs. The second source is the proceeds of CSIA Series 2025A Revenue Bonds in the principal amount of Sixteen Million Eight Hundred Thousand Dollars ($16,800,000), representing approximately thirty-five percent (35%) of total Project costs, underwritten by Harborstone Capital Markets LLC. The combination of state appropriation and revenue bond financing reflects the regional significance of the Project and the commitment of both the Washington State Legislature and CSIA's Board of Directors to addressing flood vulnerability along the Lower Nooksack corridor.
The overarching purpose of the Project is to establish a comprehensive, resilient, and integrated regional flood management and stormwater conveyance system serving the communities, agricultural operations, and critical infrastructure of the Lower Nooksack corridor. The Project will reduce flood risk, improve stormwater management capacity, protect water quality, and support the long-term economic and environmental sustainability of the region.
CSIA's Executive Director is Martin R. Calloway, who has overall responsibility for the Project and has authorized the issuance of this good-faith offer. The Project Manager is Teresa Villanueva, who serves as the day-to-day point of contact for property owners affected by the Project and who will be available to meet with you to discuss any questions or concerns you may have regarding the Project and the proposed easements.
3. Identification of Property Interests Sought
CSIA seeks to acquire the following easement interests on real property owned by Dunlap Creek Ranch Inc., as more particularly described below.
3.1 Permanent Easement — Pump Station No. 3 (PS-3)
CSIA seeks a permanent easement burdening approximately 2.1 acres of land on Whatcom County Parcel No. 380220-108400, located at Hannegan Road at the Nooksack River crossing in Whatcom County, Washington. The affected parcel is currently owned by Dunlap Creek Ranch Inc. and comprises approximately 94 acres of dairy farmland situated along Hannegan Road. The parcel is actively utilized by Dunlap Creek for dairy farming operations, including livestock grazing, feed crop cultivation, and related agricultural activities.
The purpose of the permanent easement is to authorize and permit CSIA to construct, operate, maintain, repair, improve, and replace Pump Station No. 3 ("PS-3") and all appurtenant facilities, equipment, structures, utility connections, and infrastructure on the easement area, together with permanent rights of ingress, egress, and vehicular access across the Owner's property to and from the easement area for all purposes related to the pump station and the Project. The permanent easement will be a non-exclusive easement that runs with the land and will be recorded in the official real property records of Whatcom County, Washington.
A complete legal description and easement plat depicting the precise boundaries of the proposed permanent easement area will be provided to the Owner together with the draft Permanent Easement Agreement, which is enclosed with this letter in substantially final form. The legal description and easement plat are based on a boundary and topographic survey of the affected parcels prepared by Ironclad Surveying & Land Services LLC, under the direction of Karen Whitfield, Professional Land Surveyor (PLS). CSIA reserves the right to make minor adjustments to the easement boundaries in connection with the final survey and design engineering, and any such adjustments will be presented to the Owner for review prior to finalization.
3.2 Temporary Construction Easement
In addition to the permanent easement described above, CSIA seeks a temporary construction easement burdening approximately 1.6 acres of land on portions of Whatcom County Parcel Nos. 380220-108400 and 380220-108401. The temporary construction easement area encompasses workspace, staging areas, and pipeline installation access corridors necessary for the construction of PS-3 and the associated force-main pipeline corridor segment that traverses the Dunlap Creek parcels.
The purpose of the temporary construction easement is to authorize and permit CSIA and its contractors, subcontractors, agents, and representatives to enter upon and use the designated portions of the Owner's property for construction staging, material laydown, temporary equipment storage, temporary vehicular and equipment access, pipeline installation activities, and all other activities reasonably necessary for the construction of PS-3 and the associated pipeline segment. The temporary construction easement will also authorize the temporary installation of erosion and sediment control measures, construction fencing, temporary utilities, and other temporary improvements necessary for the construction activities.
The term of the temporary construction easement will commence upon the date of recording of the Temporary Construction Easement Agreement in the real property records of Whatcom County and will expire upon the earlier of (a) the date on which CSIA certifies that construction activities within the temporary easement area are substantially complete, or (b) twenty-four (24) months from the date of recording. CSIA anticipates that construction activities within the temporary easement area will be completed within approximately twelve (12) to eighteen (18) months from commencement, but has included the twenty-four (24) month outside date to account for potential weather-related delays, permitting contingencies, and other circumstances beyond CSIA's reasonable control.
Upon completion of construction activities and expiration or earlier termination of the temporary construction easement, CSIA will undertake full restoration of all temporarily disturbed areas to their pre-construction condition, including regrading, topsoil replacement, reseeding, and repair or replacement of any fencing, drainage structures, irrigation infrastructure, or other improvements that are disturbed or damaged during the construction period. The specific restoration standards and procedures will be set forth in detail in the Temporary Construction Easement Agreement.
CSIA recognizes the importance of Dunlap Creek's ongoing livestock and dairy farming operations and is committed to implementing reasonable measures to protect those operations during the construction period. The Temporary Construction Easement Agreement will include provisions addressing the management of livestock access, the maintenance of safe and adequate fencing around construction areas, dust and noise mitigation, the protection of water sources and drainage systems, the scheduling of construction activities to minimize interference with planting and harvesting cycles, and such other protections as may be reasonably necessary to limit disruption to the Owner's agricultural operations. CSIA's Project Manager, Teresa Villanueva, will work directly with the Owner to develop a construction coordination plan that addresses these concerns.
3.3 Pipeline Corridor Easement (Separate)
CSIA also anticipates the need to acquire a permanent linear easement across Whatcom County Parcel No. 380220-108401 for a segment of the force-main pipeline corridor that is part of the Project's approximately 6.2-mile pipeline connecting all four pump stations to the Nooksack Regional Wastewater Treatment Plant outfall. This pipeline corridor easement would authorize and permit CSIA to install, operate, maintain, repair, improve, and replace 24-inch and/or 36-inch HDPE force-main pipeline and all appurtenant facilities, valves, cleanouts, and access points within the designated pipeline corridor on the Owner's property.
The compensation for this pipeline corridor easement is currently being determined by Northwind Valuation Group LLC based on a linear-foot valuation methodology that takes into account the corridor width, depth of cover, and the impact of the pipeline easement on the Owner's continued agricultural use of the surface lands. CSIA will present a supplemental good-faith offer for the pipeline corridor easement upon completion of that valuation. In the interim, CSIA wishes to initiate negotiations with respect to the permanent pump station easement and the temporary construction easement described in Sections 3.1 and 3.2 above, and will address the pipeline corridor easement in a separate but coordinated negotiation process.
The Owner's retained agricultural use rights over the surface of the pipeline corridor, together with minimum depth-of-cover requirements, restrictions on deep tillage or excavation within the corridor, and related terms, will be addressed in detail in a separate Pipeline Corridor Easement Agreement that CSIA will prepare and present to the Owner in connection with the supplemental offer.
4. Good-Faith Offer — Compensation
4.1 Basis of Offer
The offer amounts set forth below are based on an independent appraisal of the fair market value of the easement interests sought, prepared by Jocelyn Trueblood, MAI, a certified general real estate appraiser with Northwind Valuation Group LLC, located at 505 Lakeway Drive, Suite 220, Bellingham, Washington 98229. Ms. Trueblood is a Member of the Appraisal Institute (MAI) and is certified by the Washington State Department of Licensing as a Certified General Real Estate Appraiser. The appraisal was completed and dated as of March 14, 2025.
The appraisal was prepared in accordance with the Uniform Standards of Professional Appraisal Practice ("USPAP"), as promulgated by the Appraisal Standards Board of the Appraisal Foundation, and utilizing the Uniform Appraisal Standards for Federal Land Acquisitions (commonly known as the "Yellow Book") methodology as a matter of CSIA best practice. Although the Yellow Book standards are not legally mandated for state-level acquisitions in Washington, CSIA has adopted the Yellow Book methodology as its institutional standard to ensure the highest level of appraisal rigor and transparency in all property acquisitions conducted by the Authority.
A copy of the complete appraisal report, or the portions of the appraisal report relevant to the Dunlap Creek parcels, is available for the Owner's review upon request, consistent with the requirements of RCW 8.25. To request a copy of the appraisal, please contact Teresa Villanueva, Project Manager, at the address and contact information provided in Section 6 below, or contact CSIA's outside counsel, Angela Fontaine, at Calderwood & Harkness LLP.
4.2 Offer Amounts
Based on the independent appraisal described above, CSIA hereby offers the following compensation for the easement interests sought:
The compensation offered for the permanent easement for PS-3 in the amount of Three Hundred Fifteen Thousand Dollars ($315,000) reflects the appraised fair market value of the permanent easement interest, taking into account the before-and-after value of the affected parcel, the highest and best use of the property, the impact of the easement on the Owner's remaining property, and all other factors required to be considered under Washington law and applicable appraisal standards.
The compensation offered for the temporary construction easement in the amount of Thirty-Two Thousand Dollars ($32,000) reflects the appraised rental value of the temporary use of the affected areas for the anticipated construction period, together with any temporary diminution in value or disruption to the Owner's use of the adjacent property during the construction period.
The total offered compensation for the PS-3 permanent easement and the temporary construction easement is Three Hundred Forty-Seven Thousand Dollars ($347,000).
As noted above, the compensation for the pipeline corridor easement across Parcel No. 380220-108401 is currently being determined by Northwind Valuation Group LLC based on a linear-foot valuation methodology. CSIA will present a supplemental good-faith offer for this easement upon completion of that valuation, which is expected within approximately thirty (30) to forty-five (45) days of the date of this letter.
4.3 Payment Terms
Payment of the full amount of the agreed-upon compensation will be made at closing by wire transfer of immediately available funds to an account designated by the Owner or, at the Owner's election, by cashier's check drawn on a federally insured financial institution.
Closing of the easement transactions will occur following execution of the applicable easement agreements by both parties and satisfaction of customary closing conditions, including but not limited to (a) delivery of a title insurance commitment and policy from Cascade Basin Title Company (Diane Ashworth, Title Officer) insuring CSIA's easement interests, free and clear of all liens, encumbrances, and exceptions not approved by CSIA; (b) delivery of all executed easement instruments in recordable form; and (c) completion of any required environmental, permitting, or regulatory approvals. CSIA will bear all costs of title insurance, recording fees, and survey costs associated with the easement transactions.
CSIA's target date for the execution of all easement agreements relating to the PS-3 permanent easement and the temporary construction easement is August 15, 2025. CSIA acknowledges that this target date is subject to the progress of negotiations and the Owner's reasonable review and consideration of the proposed terms. CSIA will work cooperatively with the Owner and the Owner's representatives to achieve a closing date that is mutually acceptable.
5. Statement of Owner's Rights Under RCW 8.25
In accordance with the requirements of RCW Chapter 8.25, CSIA hereby advises the Owner of the following rights:
Right to Independent Counsel and Appraisal. The Owner has the right to obtain independent legal counsel and an independent appraisal of the property interests that are the subject of this offer, at the Owner's own expense. CSIA encourages the Owner to consult with an attorney experienced in eminent domain and real property law to review this offer, the enclosed draft easement agreements, and the Owner's rights and options.
Availability of Appraisal. CSIA will make available to the Owner, upon written or oral request, a copy of the appraisal report upon which this offer is based, or the portions of that appraisal report that relate to the Dunlap Creek parcels, as required by RCW 8.25. The Owner's review of the appraisal is an important part of the negotiation process, and CSIA encourages the Owner to request and review the appraisal.
Right to Negotiate. The Owner has the right to negotiate the terms of the proposed easement agreements and the amount of compensation offered. This offer represents CSIA's initial good-faith offer based on the independent appraisal, but CSIA is prepared to consider any counteroffer, supplemental information, or alternative appraisal submitted by the Owner. CSIA is committed to engaging in meaningful and productive negotiations to reach a fair agreement.
Condemnation Authority. If the parties are unable to reach agreement on compensation or other terms following good-faith negotiations, CSIA possesses the statutory authority to initiate condemnation proceedings pursuant to Chapter 43.99N RCW and applicable provisions of RCW Title 8, including but not limited to RCW Chapters 8.04, 8.12, and 8.25. CSIA wishes to emphasize, however, that its strong and consistent preference is to reach a voluntary agreement with the Owner, and that the initiation of condemnation proceedings would be a measure of last resort undertaken only after all reasonable efforts to negotiate a voluntary acquisition have been exhausted.
Just Compensation in Condemnation. In the event that condemnation proceedings are initiated, the Owner would be entitled to just compensation for the property interests taken, as determined by a court of competent jurisdiction or by a jury, in accordance with Article I, Section 16 of the Washington State Constitution and applicable provisions of Washington law. Just compensation is generally defined as the fair market value of the property interest taken, together with any damages to the Owner's remaining property. The Owner would also be entitled to such other rights, protections, and procedural safeguards as are provided under Washington's eminent domain statutes.
No Surrender of Possession Without Compensation. The Owner is not required to surrender possession of the property or any interest therein until just compensation has been paid to the Owner or deposited with the court in accordance with applicable law. CSIA will not enter upon or take possession of any portion of the Owner's property for Project purposes without the Owner's prior written consent or a court order authorizing such entry.
6. Response Period
CSIA respectfully requests that the Owner respond to this offer within thirty (30) days of receipt of this letter. Based on the anticipated delivery date of this letter, CSIA requests a response on or before May 21, 2025. The Owner's response may take the form of an acceptance, a counteroffer, a request for additional information, or a request to schedule a meeting to discuss the Project and the proposed easement terms. Any form of response is welcome and will be treated as the beginning of a productive dialogue.
The Owner's response may be directed to either of the following contacts:
CSIA Project Manager: Teresa Villanueva Project Manager, Nooksack Pump Station Program Cascadia State Infrastructure Authority 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501 Telephone: (360) 407-8247
Email: teresa.villanueva@csia.wa.gov
CSIA Outside Counsel: Angela Fontaine, Partner Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 Telephone: (206) 749-3100
Email: afontaine@calderwoodharkness.com
CSIA welcomes the opportunity to meet with the Owner and the Owner's representatives — whether at the Dunlap Creek property, at CSIA's offices, at the offices of Calderwood & Harkness LLP in Seattle, or at any other location convenient to the Owner — to discuss the Project, the proposed easement terms, the appraisal, and any questions or concerns the Owner may have. CSIA's Project Manager, Teresa Villanueva, and CSIA's outside counsel are available to accommodate the Owner's schedule.
If the Owner has retained legal counsel to represent Dunlap Creek in connection with this matter, CSIA respectfully requests that the Owner provide the name and contact information of such counsel so that all further communications may be directed to the Owner's attorney in accordance with customary professional practice. Upon notification that the Owner is represented by counsel, CSIA's counsel at Calderwood & Harkness LLP will communicate directly with the Owner's attorney regarding all substantive aspects of the proposed transaction.
7. Enclosed Documents
Enclosed with this letter for the Owner's review are the following documents:
1.  Project location map and pump station site plan identifying the location of Pump Station No. 3 (PS-3), the temporary construction easement areas, and the pipeline corridor on the Dunlap Creek parcels (Whatcom County Parcel Nos. 380220-108400 and 380220-108401).
2.  Preliminary easement area depictions showing the approximate boundaries of the permanent easement and temporary construction easement areas on the Dunlap Creek parcels. These depictions are preliminary and are subject to final survey by Ironclad Surveying & Land Services LLC. Final legal descriptions and easement plats will be incorporated into the executed easement agreements.
3.  Summary of appraised values from the Northwind Valuation Group LLC appraisal dated March 14, 2025, prepared by Jocelyn Trueblood, MAI. As noted above, the complete appraisal report is available for the Owner's review upon request.
4.  Draft Permanent Easement Agreement — Dunlap Creek Ranch Inc. (PS-3), in substantially final form for the Owner's review and comment. This draft agreement sets forth the proposed terms and conditions of the permanent easement for Pump Station No. 3.
5.  Draft Temporary Construction Easement Agreement — Dunlap Creek Ranch Inc., in substantially final form for the Owner's review and comment. This draft agreement sets forth the proposed terms and conditions of the temporary construction easement, including site restoration requirements and protections for ongoing agricultural operations.
6.  General information brochure regarding CSIA's acquisition process and the Owner's rights under Washington law, including a summary of the Uniform Condemnation Procedures Act (RCW Chapter 8.25).
8. Closing
CSIA sincerely appreciates the Owner's willingness to consider this offer and to engage in what CSIA hopes will be productive and mutually respectful negotiations. CSIA understands that the acquisition of easement interests on privately owned land is a significant matter for any property owner, and CSIA is committed to treating the Owner fairly, transparently, and with the respect that Dunlap Creek and its operations deserve.
As stated throughout this letter, CSIA's strong preference is to acquire the needed easement interests through voluntary negotiation rather than condemnation. CSIA believes that a negotiated agreement is in the best interests of both parties and of the community at large, and CSIA is prepared to work diligently and in good faith to achieve that outcome.
CSIA recognizes the importance of Dunlap Creek's dairy farming operations to the Owner, to the local agricultural community, and to Whatcom County. CSIA is committed to minimizing disruption to those operations during and after construction, and to ensuring that the terms of the easement agreements provide meaningful protections for the Owner's continued use of the property for agricultural purposes. CSIA's Project Manager and engineering team have extensive experience working with agricultural property owners on similar infrastructure projects, and CSIA will draw on that experience to develop construction plans and easement terms that are sensitive to the realities of dairy farming operations.
CSIA looks forward to working cooperatively with Dunlap Creek Ranch Inc. to advance the Regional Flood Resilience and Stormwater Management Program for the benefit of the Whatcom County community, and to reaching a fair and mutually satisfactory agreement regarding the easement interests described in this letter.
Sincerely,
CASCADIA STATE INFRASTRUCTURE AUTHORITY
By: ________
Martin R. Calloway Executive Director Cascadia State Infrastructure Authority 1100 Jefferson Avenue SE, Suite 400 Olympia, WA 98501
This letter was prepared by Calderwood & Harkness LLP, outside counsel to the Cascadia State Infrastructure Authority.
Angela Fontaine, Responsible Partner Calderwood & Harkness LLP 999 Second Avenue, Suite 4200 Seattle, WA 98104 Telephone: (206) 749-3100 C&H Matter Number: 1030-00003
cc: (via electronic mail)
Priya Shankar-Wells, General Counsel, Cascadia State Infrastructure Authority Connor Oakes, Director of Capital Programs, Cascadia State Infrastructure Authority Teresa Villanueva, Project Manager, Cascadia State Infrastructure Authority Angela Fontaine, Calderwood & Harkness LLP Grace Nakamura, Calderwood & Harkness LLP
Enclosures (6) as listed in Section 7
Easement Interest | Parcel No(s). | Area | Offered Compensation
Permanent Easement — PS-3 | 380220-108400 | 2.1 acres | $315,000
Temporary Construction Easement | 380220-108400 and 380220-108401 | 1.6 acres | $32,000
Total — PS-3 Permanent Easement and Temporary Construction Easement | 3.7 acres | $347,000
Pipeline Corridor Easement | 380220-108401 | To be determined | To be determined — supplemental offer to follow