Soil stability and other issues could derail sale of mill site

EVERETT — Sale of the Kimberly-Clark Corp. waterfront mill site is not a done deal.

The prospective buyer, a Seattle-based company called Saltchuk, has concerns about the land, including soil stability, and it’s taking more time to study the site.

Saltchuk hopes those concerns can be resolved through negotiations with seller Kimberly-Clark, but the issues could derail the deal, company spokeswoman Emily Reiter said.

The company contacted The Daily Herald this week to say it had unintentionally downplayed its concerns in an article last week that reported the extended review period. The company had said the delay wasn’t because any concerns with the land.

“We’re interested in being as transparent as possible,” Reiter said on Monday.

Saltchuk now says it has concerns with site stability and environmental cleanup. The company is concerned that cleaning and removing contaminated soil could delay site development. Saltchuk also wants to get a better idea of how much cleanup is needed for contaminated sediment in the adjacent East Waterway and who will pay for that, Reiter said.

“All of that goes into negotiations and whether the site is viable for Saltchuk’s uses,” she said.

The transportation and petroleum distribution company is buying the 66 acres to use as a new home for its subsidiary Foss Maritime Co., which operates a shipyard and maintains a fleet of tugs, barges and other specialty vessels in Seattle.

The company already has spent four months examining the site in Everett.

“During due diligence, serious issues have been found that require further investigation,” Reiter said.

Saltchuk asked for more time to address those concerns. Kimberly-Clark agreed to extend the due diligence period into mid-spring.

“Further geotechnical work is required to assess the site for Saltchuk’s work,” Reiter said.

When the deal was announced last October, the company had hoped to conclude the sale before July. It’s not clear what, if any, effect Saltchuk’s additional site review will have on the closing date, she said.

The two companies are “working together to address site issues and risks that will allow the project to move forward,” she said.

The land consists largely of fill dirt, and most of the buildings were on pilings. When most structures were demolished last year, the pilings below ground level were left in place “as is common practice for a demolition of this nature,” Kimberly-Clark spokesman Bob Brand said.

Meanwhile, Kimberly- Clark has removed some contaminated soil from the site and is working with the state Department of Ecology on a longer-term cleanup plan, Brand said.

The waterfront site, first developed more than a century ago, was primarily used for paper and pulp manufacturing from 1931 until the mill closed in 2012.

If the deal goes through, Saltchuk plans to relocate Foss’ Seattle operation to the site. It has outgrown 25 acres along Seattle’s freshwater Ship Canal, where up to 250 workers are employed during busy times and as few as 75 during slow periods. The company has a smaller shipyard in Rainier, Ore., which would not move.

The move would likely happen in phases, Reiter said.

Saltchuk is also considering additional uses for the site, she said.

In addition to Foss, Saltchuk’s other holdings include companies involved in shipping, trucking, marine transport, air cargo and petroleum distribution. The private, family-owned company employs about 6,500 people nationwide, including about 800 around metro Puget Sound.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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