Screenshot of Tuesday’s Humboldt County Board of Supervisors meeting.

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PREVIOUSLY

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After months of back and forth over the fate of the old Kmart property in Eureka, the Humboldt County Board of Supervisors today authorized staff’s request to buy the eight-acre site for $5.75 million. If everything goes as planned, the county will transform the defunct big box store into a “One-Stop Permitting Center” over the next five to seven years.

As many of our readers will recall, the county first announced plans to purchase the former Kmart site in September 2025. Those plans unraveled a few months later when McNellis Partners suddenly backed out of the deal and agreed to sell the property to Walmart instead. The county then turned its attention to the old Sears department store in the Bayshore Mall, but soon learned that the City of Eureka was trying to lure Home Depot to the site.

The county’s luck finally changed last month when McNellis Partners informed staff that Walmart had withdrawn from the Kmart deal, and that it was still interested in selling to the county. 

Once it’s fully built out, the 54,184-square-foot commercial building will host the county’s planning and building, public works and environmental services departments, as well as “swing space” to accommodate additional staff. Staff are optimistic that the new development will improve accessibility and streamline county services.

“Our customers can come into one place and get all the permits they need to move a project forward,” said Public Works Director Tom Mattson.

A draft rendering of the county’s “One-Stop Permitting Center,” which would house several county departments. | Screenshot

During public comment, a county employee, who only identified himself as Steven, urged the board to deny the request because the property is located within the tsunami zone. He noted that his comments are his own and that he will be retired before the one-stop permitting shop is open to the public.

“It doesn’t make sense for the county to put new facilities in harm’s way. … God forbid if there were a tsunami inundation, a core set of employees responsible for responding post-disaster … would not have access to a facility or vehicles,” he said. “The other issue I’d like to mention is that transportation access will rely exclusively on cars. Access is unsafe for bicycles, too remote for walking, and there are no bus stops anywhere close. … There is a reason the Kmart site has struggled to sell … [is] because it is a bad location.”

JB Mathers, a local commercial real estate agent representing McNellis, disputed that last comment, emphasizing that “there’s definitely plenty of interest in this property.” He urged the board to approve the property acquisition, noting that it would “free up a lot of space that is being leased by the county.”

Following public comment, First District Supervisor Rex Bohn said the proposal sounded like a “superb idea,” but told staff he wouldn’t support it “unless I get a commitment that we’re going to take care of the buildings we have.”

Bohn | Screenshot

“We’re not taking care of the buildings we have,” Bohn said. “I mean, I got waist-high grass at the Planning and Building Department not being attended to [and] I have to beg to get the front of the courthouse mowed. We let the veterans’ hall in Garberville melt around us; we took a minor problem and made it into a major problem till we had to tear it down and build something new.”

“I’m sorry to be so blunt … but I’m tired of the same old reasons,” he continued. “If you can’t change the oil on the cars you have now, why are you buying new cars? … I probably won’t be voting for this for that reason, unless I can get a commitment that this thing will be maintained.”

Staff did not directly address Bohn’s concerns.

Second District Supervisor Michelle Bushnell asked about next steps and whether the property would be occupied during construction. Jake Johnson, the county’s construction manager for capital projects, predicted that the “total buildout” would take five to seven years, but was optimistic that work could begin “very soon.”

“It is a big empty space currently,” he said. “It would be hard to move people in there immediately without doing the work that we need to do, but there are some uses that we potentially could use in there. We do need to maintain the building, and that’s going to take some staff time. We’re going to analyze that and see if it makes more sense to have some outside service maintain the building in the interim.”

Johnson added that the county may have to “stretch our own maintenance folks” while staff looks for a property manager. Bushnell emphasized that the county’s maintenance crews are “stretched pretty thin already,” and asked staff to expedite the process where possible.

“I know it’s going to take a year to do the design and all the things, but government tends to move really slow — it’s one of the biggest complaints I hear with constituent base — and if there’s any way we can move that up, if this passes, I would encourage that,” she said.

Fourth District Supervisor Natalie Arroyo spoke in favor of the property acquisition, emphasizing that it’s been a “slog” to find property that meets all the county’s needs.

“It is very hard to find a site that can be repurposed for some of these uses … which is why we really pay out the nose for rental properties,” she said. “While we’re appreciative that there are, rental property owners willing to rent to us, I really assure folks that long term this has the potential to save us money, but we will have to make some investments.”

Fifth District Supervisor Steve Madrone echoed Arroyo’s comments, adding that “it’s hard to find that perfect situation.”

“[There are] always going to be pros and cons, but continuing to lease properties as a solution is what’s part of what’s driving our budget into the negative, from my perspective, and I think many others,” Madrone said. “It’s not going to change our budget tomorrow, but in 10 years it’s going to make a huge difference.”

Third District Supervisor and Board Chair Mike Wilson added, “It’s a practical solution for what we’re trying to get done.”

After some additional conversation, Arroyo made a motion to authorize staff to move forward with the property acquisition, which was seconded by Madrone. The motion passed 4-1, with Bohn dissenting over concerns about maintenance.

“I asked a simple question and couldn’t get an answer, so I’m going to vote no,” Bohn said.

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Budget breakdown for Fiscal YEar 2026-27. | Screenshot

A little later in the meeting, staff provided an overview of the $657.8 million budget for Fiscal Year 2026-27. Staff is predicting a $12 million ongoing structural deficit going into the next fiscal year.

The proposed budget represents a 4.4% increase in spending from the current fiscal year, which Chief Financial Officer Jessica Maciel largely attributed to an uptick in General Fund appropriations, operational funding recommendations from the County Administrative Office (CAO) and a “large increase” in behavioral health spending after staff secured grant funding for the new Sempervirens Building. 

Maciel noted that the board had previously approved a 5% increase in General Fund allocations, “which has allowed departments to manage inflation and the negotiated salary and benefit increases after several years of holding status quo.”

The county has taken various steps in recent years to reduce spending and eliminate redundancies across departments, including implementing a hiring freeze and “deallocating” dozens of positions. The Department of Health and Human Services (DHHS), which employs roughly half of the county’s staff, deallocated 54 positions in Fiscal Year 2025-26.

The county still has negative balances in several funds that “threaten the General Fund,” Maciel said, including social services, behavioral health, roads and natural resources funds, as well as the aviation enterprise fund and aviation capital projects. Maciel noted that the aviation enterprise fund is expected to be in the positive in the coming fiscal year.

“It is important that the entire agency implement prudent fiscal practices to correct and prevent funds from having negative fund balances,” she said. “These are the same funds that we reviewed in the prior year.”

Bushnell acknowledged that the proposed budget “looks a little better than it did last year” and credited staff for their hard work, but admitted that the county is still a ways off from resolving its budget issues. 

Arroyo took a similar perspective, noting that the county’s budget is in a much better place now than it was when she joined the board in 2022. 

“When I first got on this board, it was a scary picture that we didn’t fully have a grasp on,” she said. “Everyone was doing the best they could, but now I think we have a lot more certainty about what we need to change. There are still a lot of uncertain elements, specifically around some of the federal funding and how that’s going to impact us, [but] we’re doing the very best we can.”

The board unanimously voted to approve staff’s recommendation to move the draft budget forward. Those interested in sharing their thoughts on the proposed budget for Fiscal Year 2026-27 will want to attend next week’s budget hearing on Monday, June 15.

The budget is slated for approval at a special board meeting on Thursday, June 18.