The borough last week closed on its $2.5 million purchase of the former sawmill property at 6 Mile Zimovia Highway and separately signed an agreement with the state that would hold Wrangell harmless if any past contamination is discovered at the site.
In exchange for the hold-harmless agreement, the borough will need to assess the current situation at the property and monitor the site, such as if any soil contamination is found during excavation or construction on the property, Borough Manager Jeff Good said last week.
The agreement with the Alaska Department of Environmental Conservation “takes us out of that cradle-to-grave” responsibility for the property, Good said last Thursday. Sawmill operations at the site go back more than 60 years.
The state maintains a fund that can pay for hazardous materials cleanup at sites if past owners are unable to cover the costs.
After verifying cleanup of the property, the department “determined that the contamination concentrations remaining on site do not pose an unacceptable risk to human health or the environment,” it stated in a 2014 letter to then-owner Silver Bay Logging.
“Following demolition of the mill in 2011,” the property was inspected, cleaned up, contaminated soil excavated and removed or remediated to acceptable standards for reuse, according to the January 2014 letter to Silver Bay, which operated the mill until it closed in 2008.
Silver Bay, which purchased the property from Alaska Pulp Corp. in 1995, according to the state’s letter, went through bankruptcy reorganization in 2003.
The borough has purchased the 39-acre property with the intent of preserving it intact — rather than risking the seller would piece it out into smaller parcels for sale — in hopes that a larger commercial operation might be interested in the site with its deep-water access.
The seller was Betty Buhler, who along with her late husband, Richard, owned Silver Bay Logging.
Good said the borough is looking for interested parties to lease or buy and develop the waterfront acreage, and has no plans to spend any further public money on the property.
“The intent is not to hold on to the property,” Mayor Steve Prysunka said at the June 14 assembly meeting. He said the borough wants to see the property used “in a way that brings economic benefit to the community.”
Until the property is sold or leased to a private owner, the borough will lose property tax revenues on the acreage, about $20,000 a year.
The borough paid for the purchase by drawing $1.2 million from general fund reserves and $1.3 million from its Economic Recovery Fund, which holds federal dollars granted to Wrangell to help the community recover from the fall in the timber industry.
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