Market assessment lower than expected for Rayonier mill site in Port Angeles

PORT ANGELES — Industrial demand for the contaminated Rayonier mill site on Port Angeles Harbor isn’t exactly what Harbor-Works officials had hoped for, a preliminary market analysis shows.

“The market assessment is disappointing,” said Jeff Lincoln, executive director of the Port Angeles Harbor-Works public development authority.

“There’s very limited demand in Clallam County for industrial or light-industrial land, and there’s a good stock of that land available off of the waterfront,” Lincoln said.

“Given the natural site of that, with the berthing potential there and access to deep water, we’d be looking for marine-related industrial or light-industrial activities to make the best use of the land.”

The 75-acre site at the end of Ennis Street contains pockets of PCBs, dioxin, arsenic and other toxins from a pulp mill which operated for 68 years before it closed in 1997, putting nearly 400 out of work.

Harbor-Works was created to acquire Rayonier’s 75-acre mill site and redevelop the property as well as assist in the environmental cleanup of the land, which has been overseen by the state Department of Ecology since 2000.

Even though the property could be developed for residential use — if the site were cleaned up to the degree needed for such use — public officials want to create jobs through industry.

“We need an anchor use to make the redevelopment go,” Lincoln said.

“We need a paper plant, or something like that. Maybe a major marine use, like a boat builder.”

“It’s kind of like building a major mall. You need an anchor tenant.”

Purchase decision

Harbor-Works will determine whether or not to acquire the mill site by next August, Lincoln told the Clallam County commissioners on Monday.

Central to that decision will be the results of a $380,460 process called “due diligence” — a study of how feasible it would be to redevelop the land.

The first of two phases in the due diligence process is complete. The next phase will run through March 29.

Harbor-Works executed the fact-finding agreement with Rayonier in August.

“Rayonier has been very cooperative to date in providing us any information that we’ve requested,” Lincoln said.

“And what we’re doing is taking that information and integrating it and doing our own analysis to determine what the likely cleanup scenarios are.”

Created by the city of Port Angeles in May 2008, Harbor-Works is jointly funded by the city and the Port of Port Angeles.

The city and Port have loaned Harbor-Works a total of $1.3 million.

Rayonier to pay for cleanup

Harbor-Works expects Rayonier to pay the full cost of the cleanup.

“The intent is not to make this a drag on the taxpayers,” Lincoln said.

The public development authority is working with Rayonier, the state Department of Ecology, the state Department of Natural Resources and the Lower Elwha and Jamestown S’Klallam tribes to clean up and redevelop the property.

“All options for the use of the property remain on the table,” Lincoln said.

“There are many combinations and permutations that are being analyzed.”

Options from a heavy marine terminal to a large park have been considered, Lincoln said.

Rayonier has spent $25 million

Rayonier has already spent about $25 million on five major cleanups on the site.

“Almost 10,000 cubic yards of material has been removed from the site and taken to an upland disposal site,” Lincoln said.

Harbor-Works has targeted June 2012 for ground-breaking of the redevelopment, should it occur.

If Harbor-Works buys the property, the city will use the 5-million-gallon tank that sits on the property as a wastewater overflow system.

Commissioner Mike Doherty thanked Lincoln for “being up front with the tribes.”

Doherty said communication between public officials and the tribes has been a problem in the past. The property is located on a former Klallam village, Y’Innis.

Doherty said it would be beneficial to Harbor-Works and the public to have graphic depictions and illustrations of how the land could be used.

“Some of them will become public next week,” Lincoln told Doherty.

Commissioner Steve Tharinger asked Lincoln to elaborate on the upcoming decision about what to do with the land.

“The strategy is to acquire the property with Rayonier paying for the cleanup,” Lincoln said.

Part of the problem is the 2 feet of crushed rock that covers much of the property, Lincoln explained.

“We have a huge redevelopment cost of an old industrial site,” Lincoln said.

“It’s not a pretty picture down there.”

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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.

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