Developer: Oil terminal would derail waterfront project

Port of Vancouver, terminal developers insist two can coexist

By Cami Joner, Columbian retail & real estate reporter

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Permits for public waterfront park expected to be issued soon

Columbia Waterfront LLC, the corporation charged with redeveloping a 32-acre former Boise Cascade mill site aimed at connecting downtown Vancouver to its Columbia River waterfront, is jointly involved with the city to launch work on the project’s $19.9 million public waterfront park.

Barry Cain, a spokesman for the developers, says he expects permits for the park will be issued in the next three or four months, and that developers have committed up to $3 million to build the park, considered a key component to attracting development.

A spokesman for the city says Vancouver is looking for grants to pay for its portion of the park without using the city’s general fund dollars. Developers and the city are also splitting the cost of a consultant hired to lead an effort to raise $15 million or more in grants to build the park, said Chad Eiken, director of the city’s Community and Economic Development Department.

The consultant is Jane Jacobsen, who previously led efforts to raise funding for the Confluence Project, a series of commemorative public art pieces that mark Lewis and Clark’s historic voyage of discovery.

“We still have a long way to go to secure additional funding for the public park,” Eiken said.

— Cami Joner

For months, developer Barry Cain has told anyone who would listen that his plan for a $1.3 billion Vancouver waterfront development was threatened by a proposed oil terminal about 2 miles downriver at the Port of Vancouver.

Now Cain, president of Tualatin, Ore.-based Gramor Development, is ramping up his rhetoric. Last week, he told The Columbian's editorial board flatly that the $110 million oil terminal would kill plans to bring urban density to 32 acres of downtown Columbia River-front property. It's an assertion strongly rejected by the Port of Vancouver and the proposed terminal's developers, Tesoro Corp. and Savage Companies, who have repeatedly said that they think the two projects can coexist.

Asked about the chance of the project going forward if the oil transfer terminal is built, Cain said, "Zero."

"That can stop us dead in our tracks," said Cain, who says his primary concern is safety of trains carrying crude oil. "There's no way all this is going to happen with that oil train going by."

That's one of Cain's messages these days. The other is that the project, a centerpiece of the city's vision for downtown revitalization, is still moving forward. Cain, whose company co-owns the site with four local investors as part of Columbia Waterfront LLC, said he has lined up a letter of intent from an unnamed hotelier to develop a 180-room boutique hotel. He would not reveal the hotelier and said its developer may not be aware of the site's proximity to the proposed oil terminal. He said he is in talks with restaurant, apartment, and office developers, but he offered no details.

Cain acknowledged in an interview that the hotel firm may not even be aware of the oil terminal proposal, and he has not asked if the hotelier would lose interest in the site if the oil terminal is built. However, if the oil terminal is to be built, "We're not going to see these commitments move forward. I don't think lenders are going to like it. I don't think insurers are going to like it. It's not something you can hide," Cain said.

Port of Vancouver officials strongly disagree. Todd Coleman, the Port's executive director, said safety and other concerns are being considered in the rigorous environmental review of the $110 million oil terminal now underway by the state Energy Facility Siting Evaluation Council, or EFSEC. And Kelly Flint, senior vice president and general counsel for Savage, said in a written statement that his company has reviewed Cain's statements regarding the proposed terminal and feels the community does not have to choose between the two projects.

Cain made his most recent comments to the newspaper's editorial board before Tesoro's announcement, on Thursday, that it intends to replace its full fleet of older oil transport cars with newer, safer cars construction of its proposed oil-by-rail terminal at the Port of Vancouver. Much of the oil coming to Vancouver would arrive in the new-generation Tesoro rail cars, the company said.

Cain said he isn't sure whether Tesoro's commitment to using those cars diminishes his opposition.

"I don't know if that's meaningful or not," he said.

Property being marketed

Cain is lead spokesman for Columbia Waterfront LLC, which includes Gramor and four local investors who paid $19 million for the 32-acre former mill site in 2009. The investors are Steve Oliva, Allan Kirkwood and Steve Hansen of Clark County and George Diamond of Portland.

"We are aggressively trying to market this now," said Oliva, owner of Vancouver-based Hi-School Pharmacy Inc., which operates about 20 stores in Oregon and Washington. "How these oil trains go, I don't know how that affects it at all but it's not going to be a positive."

Oliva's pharmacy stores once operated as the dominant chain in Clark County. He sold most of the chain's stores to Walgreen Co. for an undisclosed price in 2003.

Columbia Waterfront LLC's agreement with the city requires it to pay some of the costs of preparing the former industrial site for redevelopment, including a $5.8 million lump-sum share of the $45 million project to extend Grant Street south to the site, according to its contract with the city.

The city has finished the Grant Street work, which relocated railroad tracks and improved the BNSF Railway overpass. Work is set to break ground this summer on an $8.8 million road project that will bring east-west access through the width of the waterfront site. Columbia Waterfront LLC is also responsible for approximately $4.1 million of the roadwork, for now called Columbia Way. The project is expected to finish up this year.

But as work progresses on site improvements and Cain continues to meet with prospective tenants, public review of the oil terminal project continues on its own time line. EFSEC, the state energy siting review agency, might not complete its review until late this year or early next year. Then Gov. Jay Inslee will have another 60 days to accept or reject EFSEC's recommendation.

Even with his stated misgivings, Cain expects hotel construction to start in 2015, in concert with joint development of a $19.9 million park on the waterfront shores of the former Boise Cascade paper mill site.

"We're about ready to build buildings," Cain said. He added, "If the oil train is going to hang over our heads on this thing for the next year and a half, we've got a problem."

Concerns spelled out

Cain, who in December spelled out his concerns in a 54-page letter to EFSEC asking for the most extensive environmental-impact review available, has said the oil facility could turn investors of hotel, retail, office and housing projects away due to real and perceived safety risks from oil trains passing the waterfront site.

The proposed oil terminal is expected to cause an increase in train traffic through Vancouver, adding four trains per day with tankers carrying up to 380,000 barrels of crude, according to the plan submitted to the state by Tesoro and Savage.

Cain now says he is more adamant than ever that his waterfront plans will be derailed if the oil terminal is approved, due to a string of oil-train disasters that have happened since a July 6 fiery explosion of an oil-laden train in Lac-Megantic, Quebec on July 6, which killed 47 people.

Flint, the Savage official, said his company believes the oil terminal and the waterfront development can coexist. "The terminal will not change the industrial profile of the port, which was a known factor when the waterfront development project was initially proposed," Flint stated. "We strongly believe that these two projects can both move forward and bring economic prosperity to Vancouver."

The oil terminal would generate $4.5 million in annual lease payments to the port, for a total of $45 million over the 10-year term. The companies have said their proposal would generate an estimated 250 temporary construction jobs and up to 120 full-time positions at the terminal. The facility would store oil for shipment to U.S. refineries.