The warehouse (lower left) and vacant land of the former Kimberly-Clark paper mill on the Everett waterfront, as seen Oct. 23, 2019. (Chuck Taylor / Herald file)

The warehouse (lower left) and vacant land of the former Kimberly-Clark paper mill on the Everett waterfront, as seen Oct. 23, 2019. (Chuck Taylor / Herald file)

Port of Everett work forges ahead at Kimberly-Clark site

COVID-19 has impacted waterfront tenants, especially restaurants, but some port projects are moving on.

EVERETT — The Port of Everett is forging on with a major restoration of the former Kimberly-Clark mill site, even as the port faces empty commercial space and canceled events elsewhere.

Coronavirus closures have impacted the port’s operations, which could result in delays for other capital projects.

“The port is not exempt from the effects of COVID-19,” Port of Everett Commission President Glen Bachman said during a video conference April 28.

The exact monetary drop won’t be known for months, maybe longer. But port leaders suspended hiring in February for the rest of the year — freezing some positions into 2021 — and offered commercial tenants rent relief to shore up losses.

“I’m worried about what happens in eight, 12 months from now,” port CEO Lisa Lefeber said. “We’re going to have to take a hard look at a lot of capital projects that we planned.”

Hotel Indigo and its restaurant, which opened in October, closed for weeks. The doors reopened May 1. Several restaurants that lease on port property are struggling, Lefeber said. The financial ambiguity paused port plans to build new restaurant and office space in one of the agency’s redevelopment areas, and interest waned in a 60,000-square-foot building the port had expected to lease by the end of the year.

As of Thursday, six tenants were approved for rent relief for a total monthly deferral of $45,000 for up to three months. The deferred rent must be paid within a year. Relief applications remained open for commercial tenants.

“The rent relief program has been very positive,” Lefeber said. “With the federal stimulus it’s given our commercial tenants hope.”

The agency that brought in $373 million in tax revenue and $21 billion worth of exports is primed to recover, in time, Lefeber said.

One steady segment of the port’s commercial tenant portfolio is the Riverside Business Park, where Amazon and FedEx freight lease warehouse space. Nearby aerospace company Safran, however, has struggled and laid off more than half of its staff, Lefeber said.

Renewed interest in onshore manufacturing, seeded by the need for personal protective equipment amid the coronavirus pandemic, could prompt Port of Everett leaders to convince companies of its properties’ merits.

Port officials plan on going full-steam ahead with redeveloping a former mill’s 58 acres into a modern industrial waterfront.

“That project is the port’s top priority,” Lefeber said. “Our community waited long enough, it’s gotten tired of seeing just a blank site.”

The port condemned and bought the property for $33 million last year, scuttling an attempt by fishing companies to purchase it. The deal requires Kimberly-Clark to decommission shoreline pipes; to remove an estimated 12,000 tons of soil contaminated with metal, petroleum products, chemical compounds known as PCBs and other pollutants; and to haul off roughly 200,000 tons of crushed material left over from the mill’s demolition after it closed in 2012.

The old Kimberly-Clark warehouse on the Everett waterfront is seen April 29. (Sue Misao / The Herald)

The old Kimberly-Clark warehouse on the Everett waterfront is seen April 29. (Sue Misao / The Herald)

Once finished the total investment will be close to $50 million, port spokesperson Catherine Soper said.

Cleanup of the polluted waterfront parcel started in early March. Then the construction shutdown order from Gov. Jay Inslee halted work for about four weeks. Lefeber said the schedule proposed last year, including port construction around spring 2021, is still on track despite the shutdown.

“Shelving and shuttering economic projects, like the Kimberly-Clark project, at this time is counter-intuitive,” she said. “It’s our job to help stabilize the economy and make jobs.”

Work resumed this week.

When the land is ready, the port plans to build a cargo terminal that may support more than 1,000 construction jobs, Soper said.

The aerospace industry is one of the port’s biggest clients. With airlines slashing orders and aerospace companies facing a downturn, that could chop into port business.

The popular Sail-in Cinema is still on deck this summer, but instead of setting up blankets and chairs on the lawn, it will be like a drive-in theater. Also, the Pacific Rim Plaza splash fountain won’t run because of public health concerns.

“It’s just kind of sad,” Lefeber said.

Ben Watanabe:; 425-339-3037; Twitter @benwatanabe.

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