PORT ANGELES — Rayonier Inc. remained uninterested on Thursday in reopening negotiating with Harbor-Works to sell its former mill property in Port Angeles, despite $4 million promised Wednesday by the state Department of Ecology if the transaction takes place this year.
“Our letter of July 21 outlines our reasons for ceasing negotiations with [Harbor-Works Development Authority],” said Robin Keegan, Rayonier spokeswoman in an e-mail Thursday.
“It clearly states those reasons and, as we’ve said before, does not include any statement about obtaining funding from Ecology to facilitate a deal.”
Harbor-Works Executive Director Jeff Lincoln said Thursday that he and the agency’s board are evaluating Wednesday’s three-page letter from Ecology to decide what to do next.
“Harbor-Works is continuing to analyze and formulate a communication that we hope to send to Rayonier shortly,” he said.
“We’re all talking — all the people involved from the start — and are engaged to see if an opportunity to acquire the property as originally planned is there,” Lincoln said.
The result may be “a letter offer, a phone call or nothing at all,” he said.
In the July 21 letter from Rayonier to Harbor-Works Development Authority, the company said that it was unwilling to negotiate further with Harbor-Works on the sale of the 75 acres of harbor-front property because Ecology had said that there was no possibility of capping its liability for the cleanup of the land, which has an Ecology cleanup site since 2000.
Harbor-Works on Aug. 3 asked that Ecology formally reserve in a trust $4 million from Ecology’s toxics cleanup account to ensure Rayonier that it has money to cover higher-than-expected cleanup costs.
Harbor-Works had hoped that a financial commitment from Ecology would bring Rayonier back to the bargaining table.
Ecology agreed in Wednesday’s letter, saying that although it cannot legally put funds into a trust for an entity that does not own the land, “Ecology will hold the requested amount of $4 million in remedial action grant funds for Harbor-Works until the end of this calendar year.”
Said Keegan on Thursday: “A lack of funding from Ecology was not the issue.
“We do not believe that yesterday’s letter to [Harbor-Works] changes our position on any of the issues we outlined in the letter.
“Rayonier remains committed to cleaning up the site in a timely manner and will pay for the cleanup.”
Rayonier Vice-President Charles Hood on Wednesday night referred all questions to Keegan.
Harbor-Works was created more than two years ago by the city and Port of Port Angeles to acquire the 75-acre site on the Port Angeles waterfront help expedite its cleanup and redevelop it.
Ecology’s letter to Harbor-Works said that if a sale is made, Ecology would expect the terms to require Rayonier to pay for the cost of cleanup and restoration on the site, and suggested that Rayonier may want to explore ways to settle liability with the state.
“To avoid any confusion we want to be clear that Ecology will not settle or cap Rayonier’s cleanup liability at this time, before even an interim action plan for the study area is developed by Rayonier,” said the letter.
Lincoln said that because state law determines that the ultimate liability falls to Rayonier, there was nothing Harbor-Works could do about that concern.
“Harbor-Works intended to demonstrate that they could accomplish the cleanup with resources available,” Lincoln said.
“But there is no way we know of to absolutely ensure that there is no liability remaining with Rayonier.
“All the other issues related to this complicated process and the degree of liability and the assurances of what can be offered are all of course part of the negotiation,” Lincoln said.
The Rayonier on the eastern shore of Port Angeles Harbor is contaminated by low levels of heavy metals, PCBs and dioxin left from 68 years of a pulp mill operation, which ended in 1997.
The port and city together have given Harbor-Works $1.3 million while it was completing the “due diligence process” to determine whether or not it should purchase the property.
Ecology has given the public development authority $200,000.
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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladailynews.com.