EDMONDS – The Port of Edmonds made several big financial moves this week.
Port commissioners at the Monday, Nov. 14 meeting approved:
• A $13.5 agreement to buy the buildings at Harbor Square commercial center;
• Accepting $3.1 million from Unocal to settle a lawsuit between the port, Harbor Square and the oil company over polluted soil at Harbor Square;
• Increasing the 2006 port district property tax levy to help cover the cost of soil cleanup.
The purchase of the Harbor Square buildings hinges on the port getting a bank loan to cover the cost, port director Chris Keuss said Tuesday. If the port can’t get financing, the deal will be off because the port won’t have the money, he said.
The port owns the land, located between 120 and 180 Dayton St., and Harbor Square Associates owns the buildings and leases them to a health club, restaurant, offices and service-type businesses.
The buildings will be turned over to the port Jan. 13 if the deal goes through, Keuss said, adding the port will continue to lease the buildings to current tenants. The port is open to selling the buildings to interested parties, the port director added.
Buying the buildings will be worth the expense for the port, Keuss said.
The Unocal oil company owned the land from 1920 to 1978 and leased it to companies that used it for operations such as oil and gas storage, and distribution and small-scale asphalt manufacturing.
Two years ago, Harbor Square sued the port over the contamination, and the port countersued Harbor Square and Unocal. The case was scheduled to go to trial next month.
The port has spent more than $2 million so far to remove contaminated soil, Keuss said. Two more contaminated pockets exist on the property, one of them under some of the buildings, he said.
“If we go to court, one side wins, and one side gets nothing,” he said. Under the deal, “We get something for the money we have put out.”
The Harbor Inn will remain under the ownership of a separate partnership. No contamination is known to exist under the hotel, Keuss said.
The dirty dirt’s presence has been known since the late 1980s, shortly after Harbor Square signed its lease with the port. The state required no cleanup until 2001, after a small amount of oily material leaked through a storm drain into Edmonds Marsh, between Harbor Square and the nearby Unocal property.
The contamination consists of asphalt tars, diesel oil and hydrocarbons, Keuss said.
The next phase of the cleanup is planned to begin next year, Keuss said. The pollution under the structures will be cleaned up as part of either a redevelopment or razing of the buildings, Keuss said.
Representatives of Unocal and Harbor Square could not be reached for comment.
The tax increase approved Monday takes the tax rate from 6.1 cents for each $1,000 of assessed property value to 10.5 cents. The 2006 rate will be $31.50 for the owner of a $300,000 home.
Keuss said that while the rate increase is more than the generally allowed 1 percent annual increase, the port is using “banked capacity,” or increases not used in previous years.
In 2005, the rate brought the district $175,000 and the 2006 rate will bring in $300,000, Keuss said. That is still below the maximum the port could assess, which is just under $500,000 he said.
The port district covers the area generally west of 92nd Street SW and north of the county line.
Bill Sheets is a reporter for The Herald in Everett.
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