Here’s how Port of Bellingham, Whatcom could play a role in Intalco property’s future
As interest in the future of the curtailed Intalco Works aluminum smelter heats up, one potential path to be considered is whether the Port of Bellingham or Whatcom County government would purchase the property and lease it as a way to persuade a company to reopen the facility.
To be clear, nothing appears imminent on a decision like this. It’s possible that a private company could purchase the property from Alcoa and bear whatever cleanup costs are needed on a property that has worked with aluminum for 55 years. Alcoa could continue to hold on to the property, keeping it in curtailment mode, reopen it, or clean up the property and sell it.
As the redevelopment of the former Georgia-Pacific property in Bellingham has shown, however, environmental cleanup is an expensive business, something that a public agency might have more resources to fix for the community.
Speaking at a Port of Bellingham Commissioner meeting on Tuesday, Oct. 19, Don Goldberg, the port’s director of economic development, updated commissioners on negotiations that are apparently underway to potentially buy the property from Alcoa.
Goldberg, who stressed that negotiations are in the early stages, said at least two different possibilities are being considered. One would bring back aluminum production to the facility, while the other is an American-Canadian venture that would create a steel mill that focuses on using recycled material. For the second project, Goldberg said a micro steel mill format could lead to around 600 jobs; an upgraded investment could mean more than 1,000 jobs.
Bringing back an aluminum smelter would also be a key development for the nation. According to a paper done by the Congressional Research Service, there were only six aluminum smelters in the U.S. at the end of 2020, down from nine in 2010. This decrease has enabled China to become the largest producer of secondary (recycled) aluminum, while the U.S. is second.
Whatcom County and the port have been approached about this idea of public-private partnership that would result in the reopening of the Intalco facility, said Whatcom County Executive Satpal Sidhu. While Sidhu said he couldn’t disclose who approached them, he did say the meeting was mostly to gauge the level of interest in doing the partnership.
“We were jubilant,” about the possibility, Sidhu said in a telephone interview.
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Sidhu said he would be inclined to have the port be the lead agency if such a plan were to come together because it is focused on economic development and has experience handling these types of transactions.
“We would love to be a team player in this,” Sidhu said.
Rob Fix, the port’s executive director, said he’s been in a couple of conversations with potential buyers and he hasn’t heard of a scenario where the port’s purchase of the property would add value.
“Because these discussions are in the very early stages that could change, but for now I think the port’s best role is to help facilitate a transaction between private parties and get this property back to productive use,” Fix said in an email. “To that end, the port will continue to market the Cherry Point industrial area to potential investors.”
Fix added that the recent passage of the comprehensive plan amendments for the Cherry Point industrial area has added much-needed certainty for potential investors. The key was “specifying a broad range of manufacturing sectors which are allowed and encouraging large-scale development consistent with protecting critical areas,” Fix said.
If a plan to buy the property was attempted by the port, it should be handled differently than the purchase of the former Georgia-Pacific property transaction back in 2005, said Port Commission President Ken Bell. In that transaction, the port was given the 137-acre property at no cost with the stipulation that it would take on the environmental cleanup work.
The cleanup took more than a decade and was very expensive. According to a 2015 article in The Bellingham Herald, the total cost of the cleanup plan was estimated at $64 million, including $40.3 million for the mill site and adjacent underwater sediments and another $23.5 million to dredge and dispose of tainted sediments inside the lagoon.
Bell said the environmental liability would have to be very clear to him before signing off on any deal to acquire the property.
“It (contamination of the property) is a big concern to me,” Bell said, noting the plant, which opened in 1966, was operating before many current environmental laws were in place.
Sidhu agreed about the environmental component of the property and the need to know how much liability is at stake before going forward. He added that working with the Washington State Department of Ecology to make that determination would be a key step in the process.
Sidhu believes that the port did an excellent job handing in handling the former Georgia-Pacific property, given what they were dealing with at the time. He expects that the experience the port has gained while cleaning up the waterfront district will help if it were to take on the Intalco property.
