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Port Deal's Failure a Big Setback

Posted on: Wednesday, 20 July 2005, 12:01 CDT

Jul. 20--When some California businessmen arrived in January to make an announcement about their plans, they seemed like everything Port of Everett officials had been seeking for years.

The businessmen were from a family-owned Redding, Calif., company called Sierra Pacific Industries, one of the nation's largest landowners. They tended to wear jeans and checkered shirts and seemed like can-do, no-frills people who got things done.

They said they wanted to spend as much as $100 million in Everett to build a state-of-the-art sawmill and cogeneration power plant.

But on July 7, the deal collapsed.

Now the Port is starting over, trying to find someone to take over a former sawmill site along the Snohomish River that it has owned since 1999 and had expected to sell to Sierra Pacific for $24 million.

"In my opinion, it was more a clash of cultures than anything else," said John Mohr, the Port's executive director.

Sierra Pacific and Port officials had announced the plans at a Jan. 18 Port Commission meeting. The end was announced at a meeting with Mohr and Jim Shaffer, the commission president, when Red Emmerson, Sierra Pacific's president, said the company was pulling out.

"He delivered the news personally," Mohr said. "He was very generous. He just said there was no one thing -- he just said that for the good of the company, they had to move on."

Port officials said the abandonment of the plans for Riverside Business Park was a major setback for Everett, including the loss of 200 well-paying jobs that had been announced as part of the development.

"This is a very disappointing day for the Port," Shaffer said.

Sierra Pacific officials declined to comment on the decision. The company has since begun negotiations to open a plant in Skagit County.

The withdrawal wasn't completely unexpected, however.

"I wasn't surprised when they decided to go to Skagit County," said Allan Giffen, Everett's planning director.

He said the city has been unable to talk with Sierra Pacific to learn precisely what had led to the change of plans but also attributed it to differing values.

"Frankly, I think they're used to going into an area that's a little more rural," he said.

However, Giffen said he and other city staff members had been getting feedback for weeks that seemed to show an increasing hesitation about moving ahead with the 78-acre project.

Sierra Pacific had planned to spend $60 million to $100 million to build the sawmill and power plant on East Marine View Drive at what had been the site of a Weyerhaeuser mill for nearly a century. The company filed its formal application May 3, and the city went to work to get the project moving.

"We turned this permit around in very short order," Giffen said.

A 35-page staff report to a hearing examiner was issued June 23. That seemed to mark the beginning of difficulties.

On that day, Sierra Pacific asked for a two-week continuance of a hearing on the plans, and on June 30 it asked for a further continuance to July 21.

The June 23 report laid out 83 conditions for the project to move ahead. Giffen said many of them were fairly standard, for such concerns as fire safety. But Mohr said the overall effect apparently was unexpected.

"I think they were overwhelmed when they saw the staff recommendations," Mohr said. "If you've never received anything like that, it starts to scare you."

Giffen said some major requirements of the permit approval included putting in shoreline access and a shoreline-buffer area, which the city had expected the Port to do but had never been done.

Besides that, there were other conditions that seemed to cause concern, including:

--The need for a height-limit variance to allow a 110-foot-tall smokestack on the cogeneration plant.

--Landscaping requirements.

--Conditions placed on moving logs by water to the site. Logs wouldn't have been allowed to touch the river bottom, and their removal would have been required within 10 hours of their arrival at the mill.

Now, Mohr said, the Port is starting over, and the land is back on the market.

"We've actually had a couple of inquiries," he said. "We think the market has improved."

Mohr also said the collapse of the Sierra Pacific deal isn't a portent of similar problems on another big Port job, the $300 million north-marina redevelopment project.

The Port had expected to pick a development plan for that work in June and to break ground in September. Now the selection of which plan to go with has been put off until possibly next month.

After that, the Port would need to acquire city permits to move ahead with the work. Giffen estimated that could be done in less than four months but said it makes it unlikely a groundbreaking could take place this year.

Mohr was more optimistic, saying the Port still plans start work on the project this year.

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Source: The Seattle Times

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