Everett, Wash. — On June 4, the Port Commission unanimously approved a resolution authorizing the Port to utilize its eminent domain authority to acquire up to 67-acres of the vacant Kimberly-Clark (K-C) mill site in Everett.
The Commission believed it was in the best public interest to retain this deep-water resource in public ownership to support maritime commerce, economic development, international trade and support to the Department of Defense and other branches of the U.S. government. The property owner, Kimberly-Clark, took no position on the Port’s proposed action in a statement read into the record.
According to an independent economic impact study, the Port’s ownership would support more than 950 direct jobs, and an additional 700 indirect and induced jobs. Further, the Port is a proven partner for leveraging public-private development on the waterfront, with more than $450 million in investment complete in the past five years or currently underway.
The former K-C mill site provided 700 direct jobs up until its closure in 2012. Its location in the heart of the Port’s federally-secure, urban deep-water maritime complex has been under significant growth pressure, and the protection of port operations is mission critical to the Port and the area’s economic stability.
“The urban deep-water Port is a key public facility that should be open to all types of commerce. This property is a prime example why the Washington State Legislature created the Port Districts Act in 1911,” Port Commissioner Tom Stiger said. “The creation of this act, and the Port a few short years later was a reaction to the private domination of docks and harbors that were critical to the trade-dependent state’s economy.”
The Port has been consistent since the mill closed in 2012 that its top priorities were to restore the jobs lost because of the mill closure, support maritime job growth on the site, and ensure the ongoing success and protection of this public resource for international trade facilities and Naval Station Everett. In 2013, the city of Everett, after a significant review and public process determined the highest and best use of the site was for urban deep-water Port and maritime jobs.
“The vacant mill site is a crucial lynch pin to the Port’s future maritime stability, and our community’s economic success,” Port Commissioner Bruce Fingarson said. “The Port of Everett remains committed to working cooperatively with Kimberly-Clark even through eminent domain proceedings to fairly resolve all issues in transferring the property.”
The authorization to use eminent domain provides the Port the flexibility of reaching an agreement on the sale either through negotiated agreement under an eminent domain action, but also reserves the Port’s legal authority to acquire the property with payment of just compensation based on the highest and best use of the site. Under eminent domain law, the seller has the ability to recover legal costs and reduce its tax burden in the sale. The process also gives the seller longer to find replacement property without paying capital gains, which would be a benefit to the property owner.
“As a steward of our natural deep-water assets and economic prosperity, the Port has a responsibility to secure this vacant property to assure support for international trade and the needs of our public partners now and into the future,” Port Commissioner Glen Bachman said. “The Port plans to provide near-term and long-term job growth which is the key to resolving site’s impairments and putting this strategic maritime asset back into productive use.”
Just days after the Port announced its intent to consider condemnation, K-C announced a purchase and sale agreement with Pacific Stevedoring and Glacier Fish Company to create a distribution center for fish process and site corporate headquarters – most of the uses are not deep-water dependent. Port administration recommended moving forward with the June 4 action, as it was skeptical of the private party’s ability to put the site back into productive use in a timely fashion, as evidenced by its lack of job creation with its lease.
“The Port has been a leader in attracting the seafood industry to Everett and Snohomish County,“ Port CEO Les Reardanz said. “We believe there is a win-win in this situation. We look forward to engaging with the private parties to find the best fit for them in our community.”
The Port has a track record for bringing jobs and restoring environmentally impaired property. The Port’s trade facilities supports more than 35,000 family-wage jobs (average salary of $86,703) in the region and 373 million in state and local taxes. The strategic maritime assets in the urban-deep-water Port have attracted, and continue to attract, major industries to Snohomish County, making it the most trade-dependent county in Washington state. Nearly 60% of the jobs in Snohomish County is tied to trade, and the Port’s customs district supported more than $21 BILLION in U.S. exports in 2017 alone.
What is the economic benefits of the Port’s Acquisition?
The Port’s use assumes short-term and long-term job goals, which were determined based on the ability and likelihood to put the property back into productive use given its unique physical conditions.
Further, the study looked at tax revenue to the city, Snohomish County and the state, estimating $24.8 million to be received by the City alone over a 30-year period.
This study only looked at the proposed use and didn’t consider the preservation of jobs in the Everett harbor associated with the Navy and Port urban deep-water facilities.