Jury awards $8 million in damages to Port of Tacoma for Maytown site

A jury sided with the Port of Tacoma Wednesday, awarding the Port $8 million in damages suffered because of actions by Thurston County to delay a gravel mining permit on a Maytown site owned by the Port. 

The Lewis County jury also ordered Thurston County to pay $4 million in damages to Maytown Sand and Gravel, LLC (MSG), the company that bought the gravel mining site in 2010 from the Port, then returned it in 2013 because of the County’s actions. 

The lawsuit stemmed from Thurston County’s refusal between April 2010 and November 2011 to allow operation under the 2005 gravel mining permit. The delay included a March 2011 decision by the Thurston County Board of Commissioners directing MSG to prepare new studies of critical areas that had been studied and excluded from the mine area prior to 2005. 

The Port and MSG appealed the board’s decision because it violated Washington state law on the finality of land use decisions. A Lewis County judge ruled in favor of the Port and MSG in July 2011. 

By then, however, MSG had missed nearby market opportunities that no longer existed. Between the uncertainty surrounding the permit and lingering doubts about whether it could make payments on the real estate contract, MSG was unable to submit bids for large jobs that could have allowed it to succeed. It returned the mine to the Port in October 2013. 

The Port put the property back on the market. In the meantime, an operator continues mining gravel.

“We are thankful to finally put this legal matter to rest,” said Port Commission President Clare Petrich. “We appreciate that courts, and now a jury, have agreed with us at every step, but we’re disappointed how much time and money these legal challenges have cost Thurston County and Pierce County citizens, as well as the private property owner that sought to use the site for its permitted purpose.”

Background on the Port’s property ownership
The Port bought the 745-acre property near Maytown in 2006 for $21.25 million as a potential site for rail system enhancements. 

The Maytown site was one of several regional sites evaluated through a joint effort between the ports of Tacoma and Olympia. 

After purchasing the site, which once housed an explosives manufacturing plant, the Port of Tacoma assumed responsibility for environmental cleanup under an Agreed Order with the state Department of Ecology. The Port completed a cultural resource inventory, cleaned up contaminated soils, pulled invasive weeds, removed unsafe structures and continued monitoring groundwater for contamination.

The Port also took steps needed to keep the property’s existing gravel mining permit in place. The permit, which designates the property’s mine areas as “mineral lands of long-term commercial significance” under the Growth Management Act, allows extraction of 20.6 million cubic yards of gravel over 20 years and requires implementation of a Department of Natural Resources-approved reclamation plan to build and maintain habitat after mining is complete. 

Because the slowing economy reduced immediate need for port- or rail-related development, both port commissions decided to allow their agreement to expire in 2008. The Port of Tacoma subsequently announced plans to sell the property as a permitted mine. 

The Port sold the property in April 2010 to MSG. Terms of the sale included $8.5 million in cash, $8.5 million in sand and gravel at current market prices, interest income at 7 percent over the term of the sale contract, and proceeds from any future sale of smaller pieces of the property.

The sale was expected to recoup somewhere between $23 million and $30 million over the 20-year term of the sales contract, depending on gravel market fluctuations and any future property sales. 

As of October 2013, when MSG relinquished the property, the Port had invested about $27.5 million in purchasing and enhancing the Maytown site, but received only $1.2 million in cash and gravel payments from MSG.

About the Port of Tacoma
The Port of Tacoma is an economic engine for South Puget Sound, with more than 43,000 family-wage jobs in Pierce County and 113,000 jobs across Washington state connected to Port activities. A major gateway to Asia and Alaska, the Port of Tacoma is among the largest container ports in North America. The Port is also a major center for bulk, breakbulk and project/heavy-lift cargoes, as well as automobiles and trucks. 

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