The Properties Involved in the Mahaffe Scandal

Brian Gass
5 days ago
5 min read

TRANSACTION #1: BLAINE ROAD PROPERTIES (8358 & 8366)

The Properties

Two adjacent 7-acre properties on Blaine Road in Whatcom County:

8358 Blaine Road: 7.35 acres, assessed value $59,000 (2019)
8366 Blaine Road: 7 acres, assessed value $103,067 (2019)
Combined assessed value: $162,067

The Purchase (April 2019)

Buyers:

Lara Kratzer (Mahaffie's live-in girlfriend at same home address) purchased 8358 for $70,000
Dead Goat Properties LLC (Mahaffie's company, address in Sedro Woolley) purchased 8366 for $10,000
Total purchase price: $80,000 (about 49% of combined assessed value)

Seller: Miguelina Beckwith

Real Estate Agent: Rob Merhaut, acting as DUAL AGENT (represents all parties)

What is DUAL AGENCY?

Dual Agency Duties

A limited dual agent may not advocate terms favorable to one principal to the detriment of the other principal.

A broker, acting as a limited dual agent, owes the following duties to both the buyer and seller:

To take no action that is adverse or detrimental to either principal’s interest in a transaction;
To timely disclose to both principals any conflicts of interest;
To advise both principals to seek expert advice on matters relating to the transaction that are beyond the limited dual agent’s expertise;
To not disclose any confidential information from or about either principal; and
To make a good faith and continuous effort to find a property for the buyer and to find a buyer for the seller’s property, until the principals have entered a contract for the purchase or sale of property or as agreed otherwise in writing.

Purchase structure:

$20,000 down payment on 8358 (Kratzer)
$10,000 down payment on 8366 (Mahaffie)
Total cash down: $30,000
$50,000 seller financing (3-year promissory note to Beckwith)

What happened at closing:

The $30,000 down payment immediately reduced by seller concessions which paid:
- $23,854 in back taxes to remove forestry designation
- ~$5,000-6,000 in closing costs (commissions, REET, title insurance)
Beckwith received $0 cash at closing
She received only the $50,000 3 years promissory note on 8358 Blaine Rd Property

Real estate agent: Rob Merhaut started as Beckwith's listing agent (with fiduciary duty to get her the best price), then became a dual agent representing both partiess.

The Permits - An Unusual Timeline

January 2019: Mahaffie applied for septic system approval for 8358 Blaine Road

Applied for 4-bedroom home septic system
This was BEFORE the April 2019 closing
The sale was still "in feasibility"
Mahaffie started permitting before he (via girlfriend) owned the property

Who reviewed Mahaffie's applications?

Tom Brissenden, Natural Resources Planner
Brissenden was Mahaffie's colleague in the same department
Brissenden was a current county employee at the time (did not leave PDS until March 2022 but stayed with Whatcom County at Public Works)

2021: Septic system approved for 8358

Later: Tom Brissenden left county employment and went to work for "Skagit Wetlands" - Mahaffie's private wetlands consulting company

The Sale

Date unknown (after 2021): Kratzer sold 8358 Blaine Road for $210,000

The buyer's listing (2024) advertised:

"ALL THE HARD WORK DONE and is ready for your new home!!! Brand New 4-Bedroom Septic INSTALLED, Wetlands DONE, Mitigation Approved, Electric INSTALLED, Water is Hooked-Up!"

Profit calculation:

Cash invested: $30,000 (down payment)
Sale price: $210,000
Profit: ~$180,000 (600% return)

Note: Mahaffie told investigators he invested $103,000 total, not $30,000. We'll come back to this.

The Mitigation Site

8366 Blaine Road (the adjacent property Mahaffie still owns):

2022: Mahaffie signed authorization for Royal Emerald Motors to use 8366 as an offsite wetlands mitigation site

Royal Emerald Motors would pay for wetland enhancement on Mahaffie's property
This would create mitigation credits
Estimated value: $400,000 an acre

Total potential profit from Blaine Road transactions: ~$3 million

Remember the cost was ZERO from the original seller (due to having Ms Beckwith pay the back taxes to get the property out of agriculture.

Summary of Blaine Road Transaction

Let's pause and note what happened:

Mahaffie (through girlfriend and company) bought properties from financially distressed seller at 49% of assessed value
Mahaffie started permitting BEFORE closing
Mahaffie's colleague Brissenden reviewed the applications
Brissenden went to work for Mahaffie's company
Properties sold for 7x the cash investment
One property retained as potential $2.8M mitigation site

TRANSACTION #2: 4470 CASTLEROCK DRIVE

This transaction is more complex, but it reveals a clear pattern. Pay attention to the dates.

Phase 1: The Dierdorff Family Tries to Build (2017)

The Property:

0.59 acres in the Greens at Loomis Trail subdivision
Adjacent to golf course
Assessed value: $120,000

July 2017: William Dierdorff (for his father John Dierdorff, the owner) applies for a Natural Resources Assessment

Not planning immediate construction
Just wanted to establish a footprint for potential future single-family home

Who reviews the application? Matthew Mahaffie

July 28, 2017: Mahaffie Issues Notice of Additional Requirements (NOAR)

From Mahaffie's 2017 NOAR:

"Much of the property consisted of buffer from the adjacent wetlands tract. [The property is] fully encumbered by wetland buffer and a reasonable sized home cannot be accommodated without a reasonable use exception or some other solution."

Translation: Mahaffie told the Dierdorffs the property was essentially unbuildable without expensive additional permitting and wetlands exceptions.

Result: After 3 years of trying to build their home, the Dierdorffs gave up. The application expired. The property sat vacant.

Phase 2: Mahaffie Buys the Property (2020)

October 2020: Dead Goat Properties LLC (Mahaffie's company) purchases 4470 Castlerock Drive from John Dierdorff

Purchase price: $80,000

Assessed value: $120,000
Bought at 33% discount

Why did seller accept such a low price? The property appeared to have severe wetlands problems—according to Mahaffie's own 2017 review.

During ownership: Mahaffie did not apply for any development permits. He told investigators he considered building a home for himself but decided against it.

Phase 3: Mahaffie Sells the Property (2022)

April 2022: Mahaffie lists the property for sale

Email from Mahaffie's listing agent:

"The seller says that the Wetlands Mitigation was done when the plat was recorded."

Additional instruction: Mahaffie told the agent to "speak to Amy Dearborn" (county staff) about the wetlands mitigation.

July 2022: Dead Goat Properties sells to Andrey and Liya Bulanov for $229,000

Profit: $149,000 on a property Mahaffie owned for less than 2 years

Phase 4: The Truth Comes Out (2023)

June 1, 2023: The Bulanovs (new owners) apply for building permits

Who reviews it? Nathan Goldschmidt (another Natural Resources Planner)

Goldschmidt's 2023 NOAR finding:

"Because the developer of the 2002 Loomis Trail subdivision had mitigated for the wetlands on Bulanov's property, Bulanov could build on the lot without a reasonable use exemption."

This directly contradicts Mahaffie's 2017 findings.

What Goldschmidt found:

The wetlands on this property were mitigated as part of the original 2002 Loomis Trail subdivision
This information was in the public plat records
The property was buildable all along
No "reasonable use exception" was needed

The property was never unbuildable. The wetlands were already mitigated in 2002—15 years before Mahaffie told the Dierdorffs they had a major problem.

Summary of Castlerock Transaction

Let's note what happened here:

2017: Mahaffie (as county official) tells Dierdorff family property is encumbered by wetlands and needs expensive exception process
2020: Mahaffie (as private buyer) purchases the same property at 33% discount
2022: Mahaffie tells his listing agent the wetlands were mitigated with the original plat
2022: Mahaffie sells for $229,000 (bought for $80,000)
2023: County determines wetlands were mitigated in 2002 - property was buildable all along

The coverup became worse than the original misconduct.

These points are documented and verifiable from public records. All facts cited are from official investigation reports, county employment records, property records, and attorney correspondence.