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Jan. 16, 2022

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Judge sides with Millennium, says state unfairly denied sublease

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LONGVIEW — In a win for Millennium Bulk Terminals, a Cowlitz County judge has ruled against the state Department of Natural Resources, finding that it unfairly denied a sublease needed for the $680 million coal terminal.

Superior Court Judge Stephen Warning said Friday that DNR acted in an “arbitrary and capricious” manner in January by rejecting Millennium’s request to sublease state aquatic lands for new docks in the Columbia River.

However, Warning stopped short of actually granting Millennium the sublease. Instead, he ordered the parties to propose their own remedies — which may send DNR, Millennium and the primary holder of the lease, Northwest Alloys, back into negotiations.

Even without a clear sublease in hand, Millennium officials claimed victory.

“The judge reaffirmed that the DNR commissioner’s (Goldmark) decision was arbitrary and capricious,” said Wendy Hutchison, vice president of public affairs for Millennium. “For us, obviously we’ve been working very hard on this site and trying to do the right things. We just want fair treatment under the law. Goldmark’s decision was unfair.”

But coal opponents pointed out that Millennium still will need to gain the sublease and overcome other hurdles before it can build the terminal at the former Reynolds Metals Co. site.

“Obviously, we’re disappointed and we disagree with the judge’s decision,” said Kristen Boyles, attorney with Earthjustice, which is intervening in the case on DNR’s behalf. “I don’t think this is much of a win for Millennium. They still don’t have a sublease that they need to operate.”

DNR’s attorney Terry Pruitt said he was not sure whether the state agency would contest Warning’s decision. Pruitt said DNR cannot file an appeal until a final remedy is reached.

Millennium wants to build three 220-foot docks on 58 acres of state aquatic land already leased by Northwest Alloys. Millennium currently has one dock and wants to add two new docks, two new ship loaders and an access trestle.

For several years, the three parties had tried to negotiate a deal to allow Northwest Alloys to sublease its land to Millennium before State Lands Commissioner Peter Goldmark finally denied the sublease days before leaving office in January. Goldmark argued that Northwest Alloys and Millennium did not provide enough information about Millennium’s finances or about Millennium’s new sole owner, Lighthouse Resources. Goldmark also questioned Millennium’s financial viability in the wake of volatile coal markets and the bankruptcy of its former part-owner, Arch Coal.

The former lands commissioner also cast doubt on Millennium’s credibility.

He pointed out that the company first applied for permits for a terminal to handle 5.7 million tons of coal annually, but later it was revealed that Millennium actually intended to eventually handle 20 million to 60 million tons. In 2011, Millennium had to resubmit its permit application and now says it wants to handle 44 million metric tons of coal.

Judge Warning agreed with DNR that 2010 permitting snafu was a cause for major concern, but he said it was not fair for DNR to raise that concern now when the agency previously had not raised the issue during earlier contract talks.

Warning also said that the much of the information that DNR requested about Millennium’s financial status was irrelevant because DNR already knew company had no major source of revenue and that its previous owner, Arch Coal, had filed for bankruptcy.

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