Port of Everett weighs purchase of K-C mill site

  • By Debra Smith Herald Writer
  • Thursday, May 31, 2012 10:28am

EVERETT — The Port of Everett is aggressively exploring whether it should buy the 66-acre Kimberly-Clark site, which is for sale after the waterfront pulp-paper mill closed in April.

It will likely be months before port officials make a decision, and because of environmental problems it would likely be a long time before the property could be used.

“We’re trying to think 40 or 50 years ahead,” said Les Reardanz, the port’s chief administrative officer.

It’s a rare piece of real estate: a large, industrial tract with access to a deep-water channel on Puget Sound, a wharf, a railroad, truck access and a huge, dedicated water supply pipeline.

The port’s South Terminal is just south of the mill site, and the port could use the property to expand shipping operations, Reardanz said.

But port staff have a litany of questions to answer first. Among them: how to pay, the condition of the property and how best to use the site.

They also don’t know the cost to clean up decades of pollution on land and in sediment under the East Waterway of Port Gardner.

“As neighbors and responsible stewards of port property, we wanted to see if this fits within the port’s strategic vision,” Reardanz said.

Ultimately, three elected commissioners will decide if the Port of Everett makes an offer.

The port has hired real estate firm Cushman and Wakefield to evaluate the property’s worth and suggest a purchase strategy. Kidder Matthews, the Seattle real-estate firm listing the property for Kimberly-Clark Corp., has not specified an asking price.

The Port of Everett’s two big competitors on Puget Sound, the ports of Seattle and Tacoma, both handle containers of consumer goods from Asia.

Everett sees some container traffic but specializes in oversized industrial and construction equipment that doesn’t fit in containers. The Kimberly-Clark mill area would work well for so-called roll-on-roll-off equipment such as tractors and trucks, Reardanz said.

The Everett City Council earlier this year passed an emergency moratorium on development of the property, fearing that when Kimberly-Clark sold, an “undesirable use” could spring up on the waterfront.

The port respects that process and wants to work with the city, Reardanz said. But the port would like to see the land remain zoned for manufacturing. The port, he said, is committed to the environment and wouldn’t want to see a business that contributed to pollution.

“We aren’t looking at a coal terminal,” Reardanz said.

Another option would be to lease the land to a tenant, drawing revenue until the port needed the space.

Port of Everett terminals aren’t operating at full capacity now, but they were before the economy soured. Now trade volume is rising. Ship traffic, tonnage and container cargo rose 10 percent in 2011 over 2010.

As Kimberly-Clark considered its options last year, citing the poor economics of making consumer paper products in Everett, the port supported keeping the mill operating. It didn’t consider purchasing the land until it was clear Kimberly-Clark had decided to close the plant, Reardanz added.

Any buyer would be on the hook for at least some of the cleanup costs, Reardanz said.

Kimberly-Clark is testing for contamination and expects to develop a plan for cleanup. Reardanz said the port might consider taking the property off Kimberly-Clark’s hands for nearly nothing and assuming the clean-up costs.

The Port of Bellingham did something similar in 2005, acquiring a Georgia Pacific mill site abutting downtown Bellingham for $10. The port there is still working with the state on cleaning up the land and sediment in the water, and the full cost is still unknown.

Kimberly-Clark plans to demolish structures on the site and isn’t allowing outside parties to inspect the property for pollution, so the Port of Everett can’t do its own environmental tests, Reardanz said. If the port decides to buy the land, such access would be part of any agreement, he added.

The Port of Everett is already cleaning up five polluted sites — projects that are expected to cost $35 million by 2020. The state is paying half those costs and might also have money for cleaning up the Kimberly-Clark mill site. Such money is only set aside for public owners.

Port staff also approached another neighbor, the U.S. Navy, which told the port it will keep tabs on what happens but isn’t a potential buyer, Reardanz said.

The Navy is not interested in buying the land, confirmed Naval Station Everett spokeswoman Kristin Ching.

Kimberly-Clark spokesman Bob Brand said multiple potential buyers have expressed interest, but he declined to elaborate.

“It’s too early in that process for us to comment on any particular interested party,” Brand said.

Debra Smith: 425-339-3197, dsmith@heraldnet.com.