Initially, port commissioners agreed to spend up to $200,000 to study RiverWalk — envisioned as a multimillion-dollar mix of condominiums, offices and shops on 65 acres — in an agreement with RiverWalk LLC in 2005. RiverWalk partners included Rick Bowler and Mark Benson, along with their spouses.

The port ended up spending $698,125 on the proposal, according to an accountability audit issued by Washington state Auditor Brian Sonntag. The money went to land purchases, site studies and assessments, public relations, consulting fees and marketing.

The audit said the port failed to sufficiently document expenditures related to the project and that its three-member commission neglected to adequately involve the public prior to signing an agreement with the developers.

“That’s pretty much what we’ve said all along,” said Martha Martin, president of Concerned Citizens in Action, a group of local residents who have challenged the project.

Martin called the spending “reckless in regards to their fiduciary responsibility to be stewards of the public’s funds.”

Executive sessions

Port commissioners excluded the public from discussing the proposal before signing the agreement, holding closed-door “executive” meetings with RiverWalk developers prior to announcing plans to develop the site. Their announcement came during the same meeting in which developers introduced the proposal, Sonntag wrote. Audit documents said those meetings violate state law.

The port has since dropped the RiverWalk project, saying developers did not meet the requirements of the joint agreement. Last August, longtime port executive director Sheldon Tyler resigned.

At the time the agreement was signed, commission members were Alan Hargrave, Jim Carroll and Rich Gunderson. Gunderson has since left the commission, replaced by Bill Ward. Dave Ripp is the new executive director. The audit covered the period from Jan. 1, 2004 to Dec. 31, 2006.

“The port is going to make sure that all projects have a community outreach piece so that the public is updated and involved with what is going on,” said Kim Maloney, the port’s finance director.

State auditors will follow up on the port’s plans to correct violations, but the state auditor is not an enforcement office, said Mindy Chambers, a spokeswoman for the state agency.

“If they have followed their plan to correct themselves, that’s great. If they haven’t fixed the condition, we could report it as a finding again,” Chambers said.

Typically audits are conducted every two years.