"The authority did not comply with state laws regarding theconduct of business by local governments in several areas," wroteSonntag. For one, the audit says the PDA loaned $2 million of itscredit to SafeHarbor so the company could purchase furniture,fixtures and equipment for the Satsop office—which it was hopedwould generate a windfall of jobs in rural Grays Harbor. That sameequipment was subsequently used as collateral for a loan obtainedby SafeHarbor. Such actions were reported as being in violation ofthe state's constitution.

Later, the PDA contracted privately to construct a secondbuilding for SafeHarbor, which now occupies a total of 91,000 sf offlexible use space at Satsop. The contractor on the project, WoodHoldings, built the property, then sold it to the PDA for $6.3million. In the audit, Sonntag asserts, "We believe the authorityentered into a complex financing arrangement to avoid the state bidlaws."

A spokeswoman for the Auditor's office tells GlobeSt.com that itis not the office's job to make any recommendations as toconsequences for the violations. "We're not an enforcement agency,we're a reporting agency only." The spokeswoman says at presentthere is an amicable relationship between the Auditor's office andthe PDA. "Over the course of the next audit, we'll follow up to seewhat kinds of corrections have been made regarding the violations.We're in there (the PDA office) now, and our next audit will be outsometime the end of this year or the beginning of the next." Atdeadline, GlobeSt.com had been unable to reach a spokesperson forSafeHarbor or the Grays Harbor PDA for comment.

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