State Ecology promises $4 million if Harbor-Works buys Rayonier property by end of the year

By Paige Dickerson
Peninsula Daily News

PORT ANGELES -- The state Department of Ecology has promised to set aside $4 million for Harbor-Works if the public development authority buys Port Angeles waterfront property owned by Rayonier.

Local leaders remain unsure if the action, announced in a letter dated Wednesday, will be enough to persuade Rayonier executives to return to negotiating a possible sales agreement with Harbor-Works.

"We are assessing the letter to see what it means and see if we'll be able to re-engage in negotiations with Rayonier," for the site of the company's former pulp mill, said Jeff Lincoln, Harbor-Works Development Authority executive director.

He said he would be in contact with Rayonier executives to determine their thoughts on the letter.

Rayonier Vice President Charles Hood said he could not speak on the matter Wednesday.

"We haven't seen the letter yet, and until we have a chance to look at it, I can't comment," he said.

The public development authority on Aug. 3 asked that Ecology formally reserve in a trust $4 million from Ecology's toxics cleanup account to ensure Rayonier that it has money to cover higher-than-expected cleanup costs.

Although Ecology cannot legally put funds into a trust for an entity that does not own the land, "Ecology will hold the requested amount of $4 million in remedial action grant funds for Harbor-Works until the end of this calendar year," said the letter signed by Director of Ecology Ted Studervant and the governor's chief of staff, Jay Manning.

Lincoln said a financial commitment from Ecology was needed to possibly bring Rayonier back to the bargaining table after the company ended negotiations with the public development authority in mid-July.

Harbor-Works was created more than two years ago by the city and Port of Port Angeles to acquire the 75-acre site on the Port Angeles waterfront -- which has been an Ecology cleanup site since 2000 -- help expedite its cleanup and redevelop it.

The Rayonier property on the eastern shore of Port Angeles Harbor is contaminated by low levels of heavy metals, PCBs and dioxin left from 68 years of a pulp mill operation, which ended in 1997.

Mayor Dan Di Guilio said he was not optimistic that the promise of funding would result in a deal with Rayonier.

"I think Ecolgoy had a number of rules that they had to follow, but I don't think that this will be enough to put together another deal," he said.

"I'm not very optimistic."

The three-page letter summarized the discussions up until the present, offered the funding and clarified expectations should a deal be reached.

The letter said that if a sale is made to Harbor-Works, Ecology would expect the terms to require Rayonier to pay for the cost of cleanup and restoration on the site, and suggested that Rayonier may want to explore ways to settle liability with the state.

"To avoid any confusion we want to be clear that Ecology will not settle or cap Rayonier's cleanup liability at this time, before even an interim action plan for the study area is developed by Rayonier," the letter says.

"For us, it rests on the requirement that Rayonier pay for its obligations and not leave the public to pay costs that are rightfully the company's."

Orville Campbell, Harbor-Works board president, said he needed more time to determine what the letter meant.

"We need to understand precisely what the money could be used for and to what extent it would be incorporated into an offer to Rayonier," he said.

"Obviously it could be coupled with other terms and conditions attractive to them," Campbell added.

"If they were to accept, we would have to have a win-win agreement that would work out for both parties."

Both Port Angeles City Manager Kent Myers and port Executive Director Jeff Robb said they would defer to Harbor-Works for its decision.

"At this point, we have just received the letter and are just evaluating the comments Ecology made," Myers said.

"We are uncertain at this point whether or not this will provide an impetus to go back to Rayonier for negotiations."

Robb said he was not sure yet whether the commitment by Ecology would be enough to sway Rayonier.

"I cannot make a prediction on their thoughts," he said.

"But we are pleased that the Department of Ecology has worked to cooperate with Harbor-Works."

The company, with any deal, would pay for the estimated cost of cleanup, the public development authority has maintained.

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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladailynews.com.

Last modified: August 26. 2010 12:32AM
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