PORT ANGELES — Representatives of Harbor-Works, the city of Port Angeles and Port of Port Angeles will meet with Gov. Chris Gregoire’s chief of staff next week to seek the state’s help in placing Rayonier’s former mill site under public ownership.
The meeting with Chief of Staff Jay Manning will take place Tuesday in Olympia, said Jeff Lincoln, Harbor-Works Development Authority executive director.
It will precede a Thursday meeting in Port Angeles with representatives of the state Department of Ecology.
Lincoln said the purpose of the meetings is to encourage the state to allocate or commit funds to the public development authority, which he says are needed to restart failed negotiations with Rayonier Inc. over its Port Angeles property.
The funds, from Ecology, would be used to cover at least some of the environmental cleanup of the property.
Asking for help
“We’re going to ask them to support our effort with Rayonier by doing whatever they can to help us,” Lincoln said.
Rayonier has said that the absence of such funding is a deal killer.
The company, which owns the 75-acre property on the eastern shore of Port Angeles Harbor, sent a letter to Harbor-Works on July 21 saying it was ending negotiations for transfer of the land to the public development authority.
The heads of the city, port and Harbor-Works — who see acquisition of the property as a way to kick-start redevelopment of the land and prevent the 10-year-old cleanup effort from dragging on for another decade — are hoping that Rayonier is simply playing hardball, and that the company can be brought back to the bargaining table with a funding commitment from Ecology.
Ecology has maintained that it can’t promise Harbor-Works the funds if it doesn’t own the property.
Lincoln said he doesn’t expect the state agency to break that rule.
He said the local representatives at the meetings — which will include Mayor Dan Di Guilio, City Manager Kent Myers, port Executive Director Jeff Robb, port commission President George Schoenfeldt and Harbor-Works board members — want the state to find a way to make some funding available.
Myers said it is time for the state to help make Harbor-Works’ plan to expedite cleanup, as well as restore Ennis Creek, a reality.
“If they are really serious about the cleanup, now is the time for them to step forward,” he said.
Lincoln said they are hoping that Gregoire, or her staff, can help make that happen.
Karina Shagren, Governor’s Office spokeswoman, said she wouldn’t expect Gregoire to tell Ecology what to do.
“Typically, she leaves that up to her agency directors,” she said.
‘Top priority’
Ecology spokeswoman Kim Schmanke said in an e-mail that the cleanup of Rayonier’s former pulp mill site is a “top priority for Ecology” and that the agency will continue to work with Harbor-Works “as they continue their efforts to make a deal with Rayonier.”
In terms of the cleanup fund, she repeated Ecology’s position that the agency is authorized to commit the limited dollars to public entities only if they own contaminated property.
The city created Harbor-Works more than two years ago to acquire and redevelop the land, expedite its cleanup and acquire a large tank that would help the city resolve its sewage overflows.
Even if the state finds a way to commit funds to Harbor-Works — before it owns the property — a deal would still depend on Rayonier.
Rayonier not interested
On Thursday, Rayonier spokeswoman Robin Keegan said that the company is still not interested in a sale.
“We really feel like at this point the letter speaks for itself and our position has not changed since we sent the letter,” she said.
Keegan said she could not speculate what the company would do if Ecology funding is committed to Harbor-Works.
“There are so many what ifs out there,” she said.
“It’s just inappropriate to speculate what may or may not happen.”
Lincoln said funding from Ecology could be used in two ways, if a deal is made.
One option is that Rayonier gives Harbor-Works the property and pays the public development authority the difference between the estimated value of the cleaned up land and costs of cleaning it up.
The monetary contribution from the company would be used to cover most of the cleanup. Contributions from a private investor would cover the rest.
Under that scenario, Lincoln said, about $4 million from Ecology still would be needed to ensure Rayonier that it can cover cleanup costs that exceed the estimates.
Under another scenario, the funds would simply be used to reimburse Harbor-Works for the cleanup, with a 25 percent match from the public development authority.
Lincoln said both are on the table.
Needs support
“It would be extremely difficult to accomplish this cleanup any time in the near future without the support from the state of Washington and Department of Ecology,” he said.
“This community cannot do it alone.”
If Harbor-Works can’t find a way to get Ecology funding before acquiring the property, Lincoln said Harbor-Works could attempt to get it from bank loans, venture capitalists or even the city and port.
But he added that seeking further contributions from the city and port, which have loaned the public development authority $1.3 million from their economic development funds, “is not a good alternative.”
“I think they have other uses” for those funds, Lincoln said.
Myers and port Executive Director Jeff Robb said they’ve had no conversations with Lincoln about providing more funding to Harbor-Works if it can’t get funding from Ecology.
“As of this date, we certainly have not considered any further funding,” Robb said.
“It would be up to the City Council to discuss and decided that,” Myers said, “but there has been no discussion at this point.”
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
