At the planning stage of an economic development project, the risk of financial loss as a result of less than the anticipated return requires an answer to a straightforward question: “What would we do then?”

Bremerton’s Harborside condominium project may illustrate the difficulties that arise when a slightly different question has to be asked later: “What do we do now?”

This topic is more than a matter of idle curiosity for taxpayers in South Kitsap, since the county commissioners decided in 2005 to guarantee payment of the debt incurred to build those condominiums.

If revenue from sales won’t pay the debt, we must.

Once people begin to wonder how they will be affected by a venture such as this attempt to redevelop the old downtown of Bremerton, the effect can ripple unpredictably through our community and cause problems in seemingly unrelated areas.

The situation is not good. Approximately $27 million is still owed, and the debt is due in about a year.

Of the 78 condominiums that were built, 44 remain to be sold, and it seems unlikely that sales revenue can pay the debt soon enough.

Considering the possible financial impact on individuals, we are not apparently in dire straits.

Even if we had to pay the entire debt and wait for eventual sales to reimburse our county government, the amount paid by each taxpayer would not be huge.

But where would our county government get the funds to pay the debt at a time when general fund revenues cannot sustain the county’s existing level of expenditures?

Are we going to be asked to approve a tax increase to pay the debt, or is there some way of postponing the due date until the economy and real estate market recover?

If payment is postponed, at what point is it likely that the added cost of carrying the debt makes it virtually impossible to sell the condominiums for enough to pay everything?

Two things make it important to inform our community sooner rather than later — the South Kitsap School District maintenance and operations levy and the South Kitsap Fire and Rescue emergency medical services levy.

Both those levies expire at the end of 2009, so the voters will approve or reject levies to replace them at elections to be held early next year.

Letting people stew about the Harborside condominium debt may impact the efforts to gain voter approval of the school district and fire district ballot measures.

The government entities involved in the Harborside project are not related to the school and fire districts, but they are linked.

Not all voters ignore their other taxes when they decide whether to approve a tax proposition. Since the source of all tax revenue is the taxpayer, the link is unavoidable.

There may be other impacts that result from the tendency of many voters to lump local government officials together as though there is one government run by one group of people.

For these voters, taxpayers become “us” and government officials become “them” when things aren’t going well in any area.

If the people in charge of one government entity lose the trust of these voters, the skepticism spills over and affects their opinion of the others.

Much of the time, this idea that local government is run by one group is simply wrong, but projects like the effort to redevelop Bremerton’s downtown area can make it believable.

Many taxpayers are aware that one aspect of this redevelopment effort resulted in a large tax increase by the Port of Bremerton to pay for expanding the Bremerton marina at the urging of the city’s officials.

The port district and the city acted like one group for that.

Now many people are becoming aware of the combined effort to build the Harborside condominiums. Bremerton wanted the project, the Kitsap County Consolidated Housing Authority (KCCHA) managed it, and the county government guaranteed payment of the construction loans.

Another proposed part of Bremerton’s redevelopment effort is a passenger-only ferry service between Bremerton and Seattle. Bremerton wants it, the Kitsap Transit board of directors (which includes our county commissioners) pushes it, and the KCCHA is putting federal tax credit funding into it rather than other local redevelopment projects.

While cooperation among local government entities can be admirable, it cannot be denied that the interlocking boards of directors and the degree to which they have used government funds for Bremerton’s redevelopment make it reasonable to look upon them as one group of government officials.

The term “exit strategy” has been overworked and misused in the past few years, but an exit strategy is important when starting a venture like the Harborside condominium project.

Now that the risk of loss has turned out to be high, an exit strategy is unavoidable. So what do we do now?

Robert Meadows is a

Port Orchard resident.