Pope Resources to pay $14 million for Port Gamble clean up

The former Port Gamble mill site, which is to be cleaned up by Pope Resources and the state. - File photo
The former Port Gamble mill site, which is to be cleaned up by Pope Resources and the state.
— image credit: File photo

PORT GAMBLE — The time is close for Pope Resources and the state to agree to financial and environmental agreements for the clean up of the former lumber mill site and part of Port Gamble Bay.

Pope Resources released a financial report Aug. 8, reporting a net loss of $9.3 million so far this year to its investors, including an “environmental charge” of $12.5 million. Olympic Property Group President Jon Rose said the “charge” is self-imposed; in talks with the state, Pope Resources is announcing to its investors and partners what their estimated share of the clean-up cost will be. OPG owns the Port Gamble townsite, and is the real estate arm of Pope Resources.

"Notwithstanding positive operating fundamentals, our second quarter and year-to-date results were dominated by a $12.5 million addition to our accrual for environmental remediation liabilities at Port Gamble," David L. Nunes, Pope Resources president and CEO, said.

Nunes added Pope is still in the process of finalizing the agreement, but discussions have “reached the point that the scope and extent of the clean-up required at the Port Gamble site is becoming clearer.”

The scope has become larger too — “larger dredge areas, more capping of underwater sediment areas and demolition of both pilings and an old mill site wharf,” according to the report.

The total estimate for Pope Resources’ share of the clean-up costs adds up to $14.3 million, $12 million more than its original estimation. However, Rose said, there is no cost estimation on the total clean-up yet.

The state is also requiring the company pay "natural resource damages," similar to “pain and suffering” payments in a civil court case. Natural resources damages are an element of environmental law that provides for mitigation for injuries to the environment, according to the report.

Rose said the state has determined there are two parties liable for environmental damage caused by 140 years of milling and shipping at the site: Pope Resources, which did the work; and the Department of Natural Resources, which permitted it. Under the law, Rose said, the Department of Ecology is responsible for the negotiations, but does not have to talk to both parties at once. Ecology is only talking with Pope Resources, and Rose said Pope has “reserved our legal rights to be able to approach Natural Resources and ask them to share in the cost,” but have not had that discussion yet.

Between OPG and Pope & Talbot, the founding company of Pope Resources that went bankrupt, Rose estimates the company has spent $10 million so far on environmental clean-up.

The report states that Ecology will use $9 million “for acquisition of environmentally sensitive properties, rehabilitation of geoduck beds, pollution source control, habitat preservation, and clean-up sustainability” in Port Gamble Bay around the townsite.

Pope Resources will be responsible for the removal of pilings, an old wharf, and other overwater structures. OPG has presented a master plan for redeveloping the townsite, and the release states the “upshot” of this clean-up agreement is many elements were to be incorporated into the demolition and redevelopment, the costs of which can now be “absorbed” by the clean-up plan.


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