Rayonier and Grays Harbor PUD reach agreement to close Harbor Paper lease

After two years of activity, the Grays Harbor Public Utility District has reached an agreement with Rayonier A. M. Properties, LLC to bring the utility’s involvement at the former Harbor Paper site in Hoquiam to a close.

On Monday, the PUD Board of Commissioners was presented with a final agreement terminating the lease the utility has held at the now demolished paper mill site.  Once a key driver in the Grays Harbor economy, all that is left at the mill site are the concrete remains of the main facility.  Under the terms of the agreement, the PUD will place $385-thousand in an escrow account to cover the cost of removing the concrete from the site.  If after a four-year period the money remains, $200-thousand will be returned to the PUD, while $185-thousand will be paid to Rayonier to cover the cost of removing the remaining rubble.  Under the terms of the agreement, the rubble is available for third party use and transportation off of the former mill site.

“When the utility became involved with Harbor Paper, the goal was to help maintain hundreds of family wage jobs and be responsible for the generation of renewable energy (at the facility’s biomass turbines),” said PUD General Manager Dave Ward.  “When the facility closed its doors, the goal shifted to completing our contractual obligations at the lowest possible impact to our customers.  In that we were successful.”

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Over the past two years the PUD was responsible for the demolition and disposal of the mill’s wastewater treatment facility and the disposal of tens of thousands of tons of paper production byproducts, ranging from clarifier solid waste to a large hill of boiler ash.  By value engineering the project and seeking out the lowest cost alternative, the utility was able to lower the final cost from an estimated $10-million to just over $4-million.  Thanks to $2.7-million from the 2015-17 State capital budget, the final cost to the utility ended at under $1.5-million.

“This was a true team effort.  From the drivers who moved the materials to our Legal and Special Projects representatives who coordinated the project, all those involved helped the utility succeed in reaching the goal of bringing the project in at the lowest possible cost,” said Commission President Russ Skolrood.  “With this agreement, the Grays Harbor PUD can again focus all our attentions on our primary mission: to provide valuable utility services to our customers “