The Port of Tacoma Commission on Thursday approved a contract with Houston-based Kaiser Aluminum to purchase the company’s aluminum smelter located near the Port for an initial cash payment of $12.1 million.
The transaction includes approximately 96 acres and related structures located approximately four miles east of downtown Tacoma in the Tideflats industrial area and adjacent to the Blair Waterway, which the Port is re-developing for container terminal use.
The agreement is subject to approval by the U.S. Bankruptcy Court for the District of Delaware.
Subject to this approval, Port officials expect to close the transaction in the first quarter of 2003.
Under the terms of the transaction, the Port of Tacoma will conduct any necessary demolition and environmental remediation that may be required. In anticipation of this potential cost, approximately $4 million of additional funds will be placed in escrow. Any portion of these escrowed funds not required to meet certain regulatory requirements will be paid to Kaiser as additional proceeds of the sale.
”The Port has a successful record in the clean-up of industrial lands and putting them back into productive use,” said Port of Tacoma Commissioner Clare Petrich.
Activity at Kaiser’s Tacoma facility was curtailed in 2000.
When at full operation, the facility employed 350 and was capable of producing about 73,000 metric tons of aluminum annually.
Most of the Kaiser employees are eligible to receive — or already have elected to receive — retirement benefits under the terms of Kaiser’s retirement plan for salaried employees or under the terms of a labor agreement with the United Steelworkers of America.
According Port of Tacoma officials, the purchase is a continuation of the port’s commitment to investing in the community, and strategic acquisitions like this are essential to expanding the capabilities of the Port, which bolsters the regional economy and produces jobs for Pierce County.
Kaiser President and Chief Executive Officer Jack A. Hockema said the transaction is part of Kaiser’s ongoing objective to sell non-core assets and to further strengthen the company’s liquidity.
”The Tacoma smelter has generated significant economic value locally and regionally for more than 60 years,” said Hockema. “The aluminum industry in which Tacoma thrived for so long has changed and, clearly, so has the Northwest power environment. After much study, we concluded that [Kaiser’s Tacoma smelter] simply cannot compete with the much larger, newer, and more efficient smelters — generally located outside the United States — that dominate the world market today. We salute the many employees, customers, suppliers, and others who shared in Tacoma’s rich history.”