The change could save the state money, but some city leaders worry about public access and water quality in Clarks Creek if fish production is commercialized.
Pacific Seafood general counsel Craig Urness told the News Tribune the family-owned company could provide jobs to the community.
The public will have a chance to weigh in before the state Fish and Wildlife Commission votes on any lease.
The state operates more than 80 hatcheries. Private companies or other groups run some of them.
The Puyallup hatchery raises about 270,000 rainbow trout a year. The fish are planted in lakes around King, Pierce and Thurston counties for recreational fishing.
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