Thurston County ordered to pay millions in Maytown case

By John Gillie, July 18, 2014, The Olympian

An effective but illegal plan by Thurston County to torpedo the sale of a Port of Tacoma-owned tract near Maytown for use as a gravel mine could cost the county $12 million.

 

A Lewis County jury late this week decided that the Thurston County Commission illegally interfered with the sale of the tract and awarded the Port of Tacoma $8 million and Maytown Sand & Gravel $4 million.

 

The case revolved around a commission decision to order additional environmental studies and hearings during a 2011 five-year review of its already-issued 20-year gravel-mining permit for the site. A Thurston County hearing examiner had already ruled that the gravel mining operation was complying with all rules applicable at the time the permit was issued when commission members sought additional review.

 

Attorney Jed Powell of the Seattle law firm Cairncross & Hempelmann, which represented Maytown, alleged politically motivated commissioners attempted to apply new rules to the mine, which was in compliance with the rules in effect when the permit was issued.

 

The Maytown project had already proved to be a political hot coal for the Port of Tacoma, which bought the tract with the plan to build a railroad marshalingyard and a gravel mine there.

 

Local residents argued that the land was best suited to become a wildlife refuge, not an industrial tract.

 

When strong political opposition developed challenging the port’s plan at every turn, the port in 2010 put the 745-acre tract up for sale and sold most of it to Maytown Sand & Gravel.

 

The additional delay and uncertainty generated by the extra review cast doubt on Maytown’s long-term ability to mine the site and caused it to miss opportunities to land multiyear contracts to supply gravel to construction projects, its lawyers contended.

 

That lack of long-term contracts caused the gravel mining consortium to miss payments due to the Port of Tacoma for purchase of the site and ultimately led to Maytown’s return of the property to the port last year. Since the property’s return, the port has continued to mine gravel on the site but on a small-scale basis.

 

The gravel company’s lawyers said the jury verdict supported every claim: negligence, negligent misrepresentation, tortious interference with a business expectancy, tortious interference with a contract, and violation of Maytown’s constitutional right to substantive due process.

 

Thurston County argued that it was lawfully and properly examining issues missed during the initial permit issuance process.

 

Thurston County Manager Cliff Moore said the county “obviously is disappointed in the Maytown decision.” The county is still studying whether to appeal.

 

If the county ultimately loses the case, the award will be paid from a multicounty insurance pool, said Moore.

 

Moore praised the jury for its patience in dedication in listening to almost a month’s worth of testimony. “While I disagree with their verdict, I want to thank them for their service,” he said.

 

At the Port of Tacoma, officials were happy to see the jury agreed with the port’s view of what happened at Maytown.

 

“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.”

 

The Port of Tacoma bought the property, once the site of an explosives plant, for $21.25 million. The Port of Olympia then was an ally with Tacoma in promoting the use of the property. In 2008, under increasing political pressure, the Port of Olympia backed out of the alliance.

 

The Port of Tacoma spent millions cleaning the property, removing old buildings, studying its cultural significance and pulling invasive plant species.

 

After the alliance evaporated and the need for a rail yard had diminished because of the recession, the port put the property back on the market. It sold the land to Maytown Sand & Gravel for $8.5 million in payments, $8.5 million in gravel and the proceeds from any sales of smaller parcels on the tract. The port projected that that arrangement would recoup between $23 million and

 

$30 million over the life of the 20-year mining permit.

 

Maytown ended up paying the port only $1.5 million in cash and gravel before it voluntarily surrendered the property to the port last fall.

 

Powell said that until the mining permit issue is finally settled, most prospective buyers don’t want to risk purchasing the property. The only recent interest had come from the state, which had informally mentioned the prospect of paying $5 million for the property for use as a wildlife preserve.

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