Ecology Rescinds $87 Million From Everett Port Timber Site Cleanup

The Washington State Department of Ecology has withdrawn $87 million in current and future grant funds from the Port of Everett's cleanup of the Mill A site. The decision, communicated in an October letter, halts financial support for the remediation of a former timber facility located at 3500 Terminal Ave. Port CEO Lisa Lefeber stated that the move effectively stopped the project's progression toward its next construction phases.

The funding pullback occurs as the port prepares for a bench trial against Weyerhaeuser, scheduled to begin November 9. The dispute centers on a cost-sharing agreement that Weyerhaeuser canceled unilaterally in 2018. Lefeber told The Daily Herald that the lack of matching funds from the former mill owner triggered the state's review of the port's eligibility for additional grants.

In 2012, the port, Weyerhaeuser, and the Department of Natural Resources entered an Agreed Order to manage the site's contamination. The site, formerly home to Weyerhaeuser's sawmill and pulp mill operations in the 1900s, contains wood waste and chemical contaminants in its marine sediments and upland soil. The port purchased the property in 1983 and used it for log handling until the mid-2000s before switching to container cargo.

Lefeber reported that 50,000 truckloads of contaminated material remain at the site, with total cleanup costs estimated at $250 million. Ecology's letter stated that high statewide demand for cleanup resources necessitated a change in the review process for the 2027-29 biennium. The new criteria consider cleanup progress, design completion percentages, and matching fund status.

Under the revised process, Ecology will deny the port's request for $55 million for the 2027-29 period. The agency will also rescind $32 million from the current 2023-25 funding allocation, leaving the port with $3 million for engineering design work. This remaining amount will lapse if the port fails to meet a June 30, 2027, closure date for a previous funding agreement.

The port began the 2025-27 period with $57,697,337 in Oversight Remedial Action Grant funding. This includes more than $2 million remaining from an $8.6 million grant and loan combination. A May 2023 agreement granted an additional $35 million, but Ecology stated the port must close the earlier agreement to access these new funds, a process the agency does not expect to finish before the 2027 deadline.

Weyerhaeuser responded to the state's decision by offering to provide matching funds. The company committed to paying $4,734,372 for past unreimbursed costs and pledged up to $25 million toward future remedial work. Ecology described this offer as highly relevant to its consideration of the port's requests. However, Lefeber said the port currently lacks a mechanism to access these funds due to ongoing litigation.

Ecology spokesperson Cheryl Ann Bishop stated in an email that the port currently has $25 million available in state cleanup funds. The agency believes this amount is sufficient to sustain planned work, including completing pre-remedial design investigations and finalizing a Consent Decree. Bishop noted that additional funding will be prioritized when the port is ready to begin construction.

The October letter outlined two options for the port to access $20 million in awarded but unagreed funds. The first option is a standard oversight grant, achievable if Weyerhaeuser's contributions serve as matching funds and the project shows substantive progress. The second option allows access to the money as a loan, provided the port demonstrates financial need and the ability to repay, potentially with a third-party financial review.

Ecology stated that rescinding the funds allowed the agency to allocate resources to 31 shovel-ready projects that can begin spending in the next biennium. This includes 14 cleanup projects that have never previously received state cleanup funds. The agency noted that if the port uses the currently provided funding and makes progress, it would hold top priority for a 2029-31 Remedial Action Grant.