After almost 20 years as executive director of the Kitsap County Consolidated Housing Authority Executive Director Norm McLoughlin has announced he will retire effective at the close of business today. KCCHA’s Finance Director Debbie Broughton has agreed to take the helm of the agency in the interim, and a committee has been appointed to initiate the search for new executive director.

“Norm has spent a lot of time with the Housing Authority, and over the years many people have benefited because of it,” stated KCCHA Board Chair Commissioner Jan Angel.

McLoughlin submitted a letter to the KCCHA board on Oct. 7, announcing he would retire. According to a separation agreement negotiated with the KCCHA Board, McLoughlin will be available for up to 36 hours to work with Broughton and the Board to ensure a smooth transition. After that, he will be available on a consultant basis, and bill the KCCHA at market rates for his services.

Under McLoughlin’s tenure, the KCCHA has grown from having almost no significant assets, to its current position of having accumulated over $220 million in assets. However, McLoughlin has come under fire in recent months, as the Housing Authority’s Harborside Condominium project has languished for well over a year, with more than 40 unsold units, and a $5.4 million obligation to Bank of America coming due — an obligation guaranteed by Kitsap County.

McLoughlin was able to renegotiate that line of credit and have it extended for one year, but at least $1 million will come due in April of 2009, with the remainder due later in the year. There was also a substantial fee assessed by the bank as a condition of the extension. Also due in April is a $5.2 million line of credit to Key Bank, and a $1 million payment on the Harborside construction loan.

The County is also on the hook as the guarantor for a number of other loans and credit lines for KCCHA projects, including the remainder of the construction loans for the Harborside Condos, which are in the neighborhood of $27 million. The county commissioners are understandably concerned that in the current economic climate, the KCCHA won’t be able to either extend or renegotiate the terms of any of those loans or lines of credit as each comes due. If that happens, the County will be responsible for payment in full if the KCCHA doesn’t have the cash on hand, which could also have a negative impact on the County’s bond rating.

Once the severity of the KCCHA’s financial situation became clear, the Board gave the KCCHA a mandate to liquidate properties it owns to begin raising cash, and to create a plan to stabilize its financial situation going forward. Those properties include the lot directly adjacent to the Harborside Condos on the Bremerton waterfront, which appraised at $5.8 million. There is also the possibility the unsold Harborside units may be leased as a way of generating additional cash flow for the agency.

Earlier this year, after consulting with Hendricks & Partners, a national brokerage firm specializing in the purchase and sale of such properties, McLoughlin told the Board the firm advised him that a sale of the KCCHA’s Treetops project in Poulsbo could bring $34 million. That would have paid off the Harborside loans as well as the remaining balance on Treetops itself, and given the KCCHA a financial cushion until it developed a strategy to fill the annual $600,000 cash flow hole the Treetops sale would create.

Around the same time, a letter of interest outlining a possible $28 million offer on Treetops was brought to the KCCHA by the Kitsap Commercial Group, but never acted upon.

Hendricks & Partners presented offers to the Board for Treetops just as the current national financial crisis began, which hasn’t been accepted. The Board did extend the listing agreement for Treetops with Hendricks until Dec. 31.

The Board voted to accept McLoughlin’s decision to retire. He won’t be receiving any “Golden Parachute,” but will only be paid money due to him by virtue of his employment contract.

Possible additional staff changes haven’t been addressed at this point.