Tuesday, March 23, 2010

Tacoma Port to Sell Maytown Property at $10M Loss

The long saga of the Port of Tacoma's Maytown property appears to be nearing an end.
The port's governing board voted last week to sell the 745 acre property – once envisioned by the port as the site for a proposed intermodal rail and logistics facility – for $17 million to a minerals firm that plan to mine the site for gravel.

The port purchased the property in 2006 for more than $21 million and has since invested another $6.5 million in the site for consulting and pre-construction work related to the development of the rail facility.

The port continued to work on the proposed rail facility until 2008, when vehement community opposition to the construction and operation of the rail facility coalesced, leading to the port's decision to abandon the rail facility project and sell the property.

However, the downturn in the real estate market and the economy in general led to lengthy negotiations with purchaser Maytown Sand and Gravel, a partnership between Federal Way, Washington-based gravel firm Lloyd Enterprises and Irvine, California-based real estate firm Southwind Realty Group.

Under the terms of the deal, Maytown Sand and Gravel will pay the port $20 million over 17 years at 7 percent interest, including a $1 million closing payment. The total purchase price will be made in cash and $8.5 million worth of sand and gravel. 

The port hopes to make up the $10 million up-front loss on the property through interest on the deal, variations in the price of sand and gravel it receives from the purchaser, and the future proceeds from a 65-acre parcel on the site that was not included in the sale.

Maytown could still pull out of the deal if a key mining permit is revoked by Thurston County officials. The port was unable to get the go-ahead to mine on the property due to the county labeling the port non-compliant with groundwater monitoring protocols. If the firm meets the protocols and does receive the county's blessing on the special-permit, the firm must still comply with or complete more than two-dozen stipulations set down by the county before the firm could actually begin mining the property.