Tuesday, February 8, 2011

Farwest Steel Opts for Extension on Port of Vancouver USA Land Purchase

The Eugene, Oregon-based firm seeking to build a steel fabrication on a 20-acre parcel at the Washington State Port of Vancouver is now asking port officials for more time to finalize the purchase of the property.

Under the terms of an agreement with the port signed back in June 2010, Farwest Steel Corp. agreed to close on the property by Feb. 6. The agreement allowed for an additional 98-day window to complete the $5 million transaction, albeit at an added cost of $500 per day in non-refundable penalties. The added fees, however, will be applied to the sale price of the property. If Farwest fails to close on the deal, the port would keep any penalties accrued.

Port officials said they were not surprised by the request and they still expect Farwest to complete the transaction no later than early April.

The sale of surplus port property to Farwest ran counter to normal port policy to lease port parcels, but commissioners said at the time that the economy outweighed such concerns. Farwest has said that the proposed plant would initially employ 100 workers with the potential to employ as many as 228 workers with an average salary of just over $40,000, plus benefits.

Farwest plans to spend between $20 million and $30 million to develop the plant. Farwest officials said the firm plans to take advantage of the port's rail access and the new facility, when completed, is expected to receive 200 to 300 rail cars a year. The proposed 300,000 square foot facility, which in addition to manufacturing would also include distribution and office space, could be built and operational by late 2011 or early 2012.

Under the terms of the deal, the port can purchase back the 20-acre parcel is Farwest does not begin construction of the plant within 12 months, maintain 100 workers at the facility, keep the property in industrial use, or halts activity on the site.