PORT ANGELES — The head of Rayonier Inc. says the company sees itself as financially responsible for the environmental cleanup of its Port Angeles pulp mill site.
But in a talk before the Port Angeles Business Association on Tuesday, he left the door open for the use of public funds to get the property up to state Department of Ecology standards.
Rayonier CEO Lee Thomas, who was federal Environmental Protection Agency administrator from 1985-1989, acknowledged that it would be in Rayonier’s interest to have the Port Angeles Harbor-Works Development Authority contribute funds to the cleanup of its waterfront property on the northeast end of the city.
Whether that occurs depends on future negotiations between the public development authority and the Jacksonville, Fla.-based company, he told about 50 people at the Port Angeles Business Association meeting at Joshua’s Restaurant.
“I’m not giving the site away,” Thomas said.
“It’s a valuable asset for Rayonier.”
75-acre site
Harbor-Works wants to acquire the 75-acre site — the largest undeveloped waterfront parcel on the North Olympic Peninsula — to direct its redevelopment, and therefore, its level of cleanup.
Whether the city of Port Angeles gets ownership of a large tank on the property to prevent untreated sewage from dumping into marine waters during heavy rainfall is also dependent on Harbor-Works acquiring the site.
Thomas said Rayonier does want to sell the property and isn’t interested in redeveloping it itself.
The property has been an Ecology-supervised cleanup site since 2000.
It is contaminated with PCBs, dioxins and other toxic chemicals emitted by a Rayonier pulp mill that operated for 68 years before closing in 1997.
Fund goal
Harbor-Works Executive Director Jeff Lincoln has said that his goal is for no public funds to be used for the cleanup. If any such funds have to be used, he said that future development would offset those costs.
City staff members have maintained that no city money will be used on the cleanup.
If the public development authority acquires the property, it along with Rayonier would be liable for its cleanup under state law.
But Harbor-Works can sign an agreement with Ecology that limits its liability.
“We won’t be let off the hook,” Thomas said.
Although they would both be liable, the company and Harbor-Works can negotiate which of them will cover certain costs, such as the cleanup itself.
This was done with a shuttered Georgia-Pacific LLC mill in Bellingham in 2005.
Georgia Pacific, of which Thomas was president at the time, sold its 137-acre site to the Port of Bellingham for $1 in exchange for that port agreeing to pay for a share of the cleanup of the property and adjacent waterway.
Port Angeles meetings
PABA wasn’t the only group that Thomas met with during his two-day visit to Port Angeles.
He also met with Lincoln, city of Port Angeles staff and the Lower Elwha Klallam tribe on Monday.
Thomas said Tuesday that the meetings, as planned, were for discussion only, and no agreements or decisions were made.
“Overall, I just thought it was some good progress meetings,” he said after speaking to PABA.
Left out of the meeting with Lincoln was whether Rayonier will contribute $500,000 to Harbor-Works.
The public development authority is funded through the city and Port of Port Angeles, which have so far each loaned it $150,000 from economic development funds.
Harbor-Works is seeking an additional $1 million in loans between those two entities to cover its costs through 2010.
It has also applied for a $200,000 integrated planning grant from Ecology.
Not appropriate time
Referring to the funding request from Harbor-Works, Charles Hood, Rayonier vice president of corporate affairs, said Friday that he was “sure it will be discussed.”
But Lincoln said Tuesday that it wasn’t the appropriate time.
“That request remains an issue for discussion,” Lincoln said.
“There’s a time and a place for everything, and a meeting to discuss general parameters for relationships going down the pike, is not the right time to say let’s argue about this point and this request that Harbor-Works has put forward.”
Lower Elwha Klallam Tribal Chairwoman Frances Charles said the purpose of the tribe’s meeting with Thomas was to keep the lines of communication between them open.
“It’s just something we wanted to start off with refreshed pertaining to when all the authorities get involved like this,” she said.
Topics of discussion included the tribe’s history and ties to Rayonier’s property, which is a former location of a Klallam village.
Remnants of the village and its inhabitants are known to be buried under portions of the property.
The tribe is a partner in the cleanup with Ecology.
Charles said at the PABA meeting Tuesday that the tribe is supportive of redevelopment of the property, but tribal members want their cultural resources protected.
Tribal resources, tank
She said the tribe is working with the city to ensure that its potential use of the 5-million-gallon tank on the property doesn’t disturb those resources.
“Yes, we are very concerned,” said Charles, referring to the possibility of Klallam graves and artifacts being uncovered.
Under the city’s plan to stop untreated sewage from entering Port Angeles Harbor and the Strait of Juan de Fuca during heavy rainfall, the tank would store sewage until it can be treated by the wastewater treatment plant adjacent to the site.
But using the tank would involve connecting it with the city’s sewer system, which would involve disturbing soil on the property.
The city, after consulting the tribe, agreed that any pipes would be contained in soil berms above the ground to avoid unearthing cultural resources.
Ecology has mandated that the city nearly eliminate sewage overflows by the end of 2015 or face a fine of $10,000 a day.
The city does not have ownership or use of the tank, but does have access to the property to finish designing how it would use the structure if a final agreement can be reached with Rayonier.
Hood has said the company won’t transfer ownership of the tank unless Harbor-Works acquires the rest of the property.
The purpose of Thomas’ meeting with city staff Monday was to receive an update on that project.
The city estimates it will cost between $32 million and $42 million to comply with Ecology on that issue.
It has borrowed $10 million from Ecology and is repaying loans through $2-a-month increases in wastewater utility rates.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
