PenPly mill demolition to start next month
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Dave Logan/for Peninsula Daily News
The buildings and smokestack of the old Peninsula Plywood mill in Port Angeles will start coming down in November.

By Paul Gottlieb
Peninsula Daily News

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PORT ANGELES — Equipment and workers will begin arriving in mid-November to tear down the shuttered Peninsula Plywood LLC mill on Marine Drive.

But it will be 2015 before the waterfront acreage can be redeveloped for marine trades, Port of Port Angeles officials said Monday.

The three port commissioners unanimously agreed Monday to award a $1.6 million contract to Rhine Demolition LLC of Tacoma and to sign an agreed order for cleanup of the Marine Drive industrial site, home to plywood operations on and off since 1941.

Demolition, remediation and cleanup could cost from $3 million to $4 million and could become the most expensive project in the port's history, exceeding the approximately $3 million development of the port's composites manufacturing campus near the Port Angeles airport, port Executive Director Jeff Robb said.

“If there are unforeseen conditions, there's obviously a caveat to that statement,” Robb warned. “We may have to mitigate beyond those numbers.”

PenPly's owners, who leased the land from the Port, closed the plant last November owing $2.4 million to the port, city of Port Angeles and the state Department of Labor and Industries.

Under the agreed order — a contract between the port and Ecology — evaluation and cleanup of the site, which cannot begin until demolition is completed, is not likely until 2015, commission President John Calhoun said.

Robb praised Ecology for working relatively quickly to produce an agreed order for port consideration, adding that without the order, the port would not be eligible for state cleanup funds to help mute the project's financial impact.

“We think there's a good probability of us getting that,” he said.

But Calhoun lamented the time it will take to make the 19-acre parcel ready for a new tenant or tenants.

“It will be late 2015 before we are going to be able to move forward” with redevelopment and job creation, Calhoun said.

“This is still frustrating,” he said.

To quiet laughter from the audience at Monday's commissioners' meeting, he noted that under the agreed order, the port is required to meet certain benchmarks in the order, being told the agency “shall” fulfill the tasks, while by contrast, Ecology will “endeavor” to complete its reviews of the cleanup process as it moves forward.

“It provides an opportunity for Ecology to continue to provide excellent service,” Calhoun quipped.

Robb was confident the agency had shown signs it would not lag in the process.

“You don't get an agreed order in 12 months unless they want to work with you,” he replied.

Rhine Demolition was the third-lowest bidder among seven for the demolition contract, which the port had estimated would cost $1.4 million to $1.9 million.

None of the bidders was from the North Olympic Peninsula.

Chris Hartman, director of engineering, said 3 Kings Environmental was the apparent low bidder but withdrew because of an error in its application.

The second low bid, from Anderson Environmental, did not include a bid bond so was considered “non­responsive,” Hartman said.

The building will become the property of Rhine Demolition, he said.

Once company representatives arrive in Port Angeles after the contract is signed, they will be told, “Here's the key; this is your mill now,” he said.

“It is their full responsibility. They have to meet the conditions of the permit.”

Demolition will be accomplished largely in 2013 and will allow the soil under the building to be analyzed for the presence of toxic chemicals.

Port officials still don't know the source of benzene, a carcinogen present in crude oil, that is present on the property but do know it is not under the main plant.

Rayonier Inc. already involved in the cleanup of its own defunct mill property about 2 miles east of PenPly, has been involved for 22 years in the cleanup of the PenPly property as a former owner of the site from 1971 to 1989, when Rayonier was ITT Rayonier.

The company has been abating a hydraulic oil spill that occurred underneath the mill when ITT Rayonier was the owner.

Rayonier, too, is under an agreed order from Ecology to clean up the spill.

“They haven't been very successful with that cleanup effort because the building is in the way,” Robb said.

“DOE [Ecology], under [the state Model Toxics Control Act], has been looking at PenPly for 20-plus years.”

A 7.7-acre portion of the site that the port is leasing to PenPly co-investor Grant Munro, owner of Munro LLC, for log storage expires in March.

When the lease comes up for renewal, port commissioners will consider extending it “if that is not impeding the cleanup, and I don't think it is,” Commissioner Jim Hallett said after the meeting Monday.

Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at

Last modified: October 08. 2012 6:02PM
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