PORT ANGELES — State Department of Natural Resources officials began discussions Wednesday with Cooke Aquaculture Inc. representatives on dismantling the company’s Atlantic salmon fish farm off Ediz Hook, said state Lands Commissioner Hilary Franz, the elected head of DNR.

Franz canceled the New Brunswick, Canada-based company’s aquatic-lands lease Dec. 15, citing violations including Styrofoam discharges, a defective anchoring system and operating 500 feet outside of its leasehold area by placing its anchors outside the boundaries set in the agreement.

She said in an interview at the Peninsula Daily News’ Port Angeles office that the cancellation is non-negotiable.

Cooke is challenging the notice of termination.

The company is addressing DNR’s environmental and safety issues, just learned of the DNR’s anchor-placement concerns in November and will “use all means at our disposal to protect our ability to continue to operate at this farm site and to maintain these jobs,” Cooke said in a Dec. 17 statement.

Replacement anchors were installed to replace faulty anchors before the company received the termination notice, according to the statement.

Cooke spokesman Joel Richardson said Tuesday, two weeks after releasing the statement, that Cooke was holding firm to its position.

“We have, since then, sent DNR more information supporting our position that the termination was due to an incomplete understanding of the facts,” Richardson said in an email.

“We are aiming to speak with DNR this week. Our priority is to continue dialogue with DNR. We will let you know if a suit needs to be filed.”

Franz said there is no appeal process.

“This isn’t a permit,” she said of the lease. “We are the manager of this land and the owner of this land on behalf of the public.”

DNR staff will work with Cooke “to make sure the removal of the facility is done in a safe and timely manner,” Franz said.

She is willing to fight Cooke in court if the company challenges the lease termination in court, she added.

Franz said Cooke, which purchased the net pens from Icicle Seafoods Inc. in May 2016, was required to fix the leasehold-boundary violation by October 2016 and confine the facility’s dispersal of Styrofoam, which is petroleum-based, by December 2016.

Cooke assumed the responsibility of addressing those issues when it purchased the fish farm from Icicle Seafoods, she said.

“They had plenty of time to cure this,” Franz said. The company was “aware of the situation,” she added.

A DNR inspection of the Port Angeles facility following the Aug. 19 collapse of Cooke’s fish farm off Cypress Island revealed broken anchor chains, Franz said.

An investigation into the Cypress Island mishap is expected to be completed by the end of January, Franz said.

What happened at Cooke’s Cypress Island facility played a part in the review and subsequent termination of the company’s lease in Port Angeles, Franz said.

Thousands of Atlantic salmon were released from the Cypress Island site, mixing with native, endangered salmon species, she said.

“There clearly was not a strong system in place to capture those fish quickly, as we are seeing they have spread wide and far. We have no idea on how long, the full read on how long, that will have an impact on our native species,” she said.

Franz ordered reviews of the Port Angeles facility and two other operating fish farm operations after the Cypress Island incident, with Cooke’s Ediz Hook operation the first to be reviewed.

She noted the location of the pens to be in a high traffic area, which will include additional vessel activity once a Navy submarine escort vessel pier is completed later this year.

Cooke General Manager Innes Weir said in April the Navy project would force the company to relocate the Ediz Hook fish farm. But that move, planned for waters off Morse Creek east of Ediz Hook, was put on indefinite hold after Gov. Jay Inslee imposed a moratorium on new fish farm permits following the Cypress Island mishap.

Franz said she agreed with legislation proposed by 24th District Rep. Mike Chapman from Port Angeles and 40th-District state Rep. Kristine Lytton from Anacortes, where the Cypress Island mishap occurred.

The legislation, which might be introduced this week, sets up a process to phase out DNR aquatic leases for net pens by July 1, 2020, unless it can be certified there are no negative impacts to Washington state waters, Chapman said Wednesday.

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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.