POULSBO — In a unanimous vote Wednesday night, Poulsbo City Council members agreed to reject all previous city hall proposals, including those of the final two agencies, Kitsap County Consolidated Housing Authority and Pioneer Property Group, which unsuccessfully met Mayor Kathryn Quade’s July 18 request to create a blended proposition.

The council then voted 5-2 to give Quade the authority to enter into negotiations with the KCCHA to develop a new city hall plan placing the structure within the city’s historic downtown core. A specific site has yet to be determined. Though the council split its vote, Quade said the all-around agreement by the Long Range Planning committee is a significant positive sign.

The decision followed a 30-minute executive session during which the council discussed potential property acquisition. The city does not expect to use the current city hall site for the new structure, and council members Ed Stern and Connie Lord both expressed hope the space can later undergo public and private economic development in a separate process. The area designated as historic downtown, in which Quade and the KCCHA aim to find a suitable parcel, runs primarily along Front Street and Jensen Way from Iverson Street south to Hostmark Street, and also includes Moe Street.

Councilmen Mike Regis and Jim Henry voted against allowing Quade to negotiate with the KCCHA. Both have said they are still attached to the 10th Avenue city hall site, which Poulsbo purchased from Olympic Property Group for $2.1 million in November 2005. Planning shifted to a downtown location after voters had their say in November 2006.

Quade’s negotiations with the Housing Authority will be reported to both Poulsbo’s Long Range Planning Committee and the council, and will be subject to a council vote and legal review before a final decision is made, but Quade said she thinks the city can still break ground on the new building in 2008.

“I believe we now have a viable route, now we can move forward,” she said. “I have made it a personal goal to break ground next year.”

KCCHA executive director Norm McLaughlin said his agency is looking forward to working with the city in a comprehensive approach to Poulsbo’s downtown.

“We’re just delighted that the city has decided to work with us,” he said. “We think we can do something that is wonderful.”

Quade said she is unsure what the city’s current budget for the project is, but she is confident it can be done within the alloted amount, especially now that planning will focus solely on a city hall, and further hotel, conference center and plaza developments will be determined in future projects. The city first earmarked $12.75 million for the project, but at least $2.65 million of that has already been spent on feasibility studies, architecture, engineering and the 10th Avenue land acquisition.

Councilman Dale Rudolph, who previously supported the plans of PPG, said the high construction costs and impacts on downtown deterred him from their proposal.

“I supported Pioneer’s proposal in the past because I thought it was the best we narrowed it down to, not because I thought it was best overall,” he said.

PPG’s Sean Hallissey said he thought the city never had any intention of working with any agency other than KKCHA, and criticized the process for not being objective.

“It seems that (Quade’s) influence on the Long Range Planning Committee has determined the outcome of tonight’s meeting before the rest of the council has a say,” he said. “To say that our team feels used at this point would be an understatement… It sure seems that the city of Poulsbo has been very reckless with their money and resources in the past and now they have taken this to the private sector.”

Stern said in each bidding process there must be a winner and a loser, and he feels confident the city is making the right decision.

“There is no other entity that has pulled this off,” he said of KCCHA. He pointed out their unique skill set and demonstrated track record. “For us to ignore that, then we should be challenged.”

Several citizens offered their opinions after the council discussed the issue. Long-time resident Muriel Williams criticized their “ill-advised decision” and the length of time it took them to reach it.

“The reality is the city could have been moving into its new quarters this October,” she said. “I foresee the day when the city might well rue its lack of common sense.”

Former Poulsbo Mayor Mitch Mitchusson urged the council to reconsider the 10th Avenue site, where the police station could also be located.

“We see changes all the time in our community,” he said. “You have to grow to be healthy. You should go with 10th Avenue.”

But city council candidate Linda Berry-Maraist lauded the action.

“It’s really important to think how special and unique our downtown is,” she said. “I want to cheer you for the direction you’ve taken tonight.”

Even so, city council candidate Becky Erickson and resident David Wells both questioned Quade’s position, as she currently chairs the KCCHA board. Regis too expressed the need to know Quade wouldn’t be faced with competing interests. She assured him it would not be the case.

“Bottom line Mr. Regis, I represent the city and the citizens. Every other board comes second,” she said. “I don’t intend on doing anything behind closed doors that I can do in public.”

Quade also said she would abstain from voting were there a tie on the issue in the future.

Stern emphasized that all mayors in the county are assigned sit on various boards, including for the KCCHA. He said it is no more than a coincidence Quade is chairing that agency at the current time.

“It is to our citizen’s advantage,” he said.

City Attorney Jim Haney also stated he did not see a conflict of interest.