The Port of Tacoma Commission
has approved a contract with Houston-based Kaiser Aluminum (KALU)
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 Commission
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
According to Jack Fabulich, President of the Port of Tacoma Commission, the
purchase is a continuation of the Port's commitment to investing in the
community. "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
"The aluminum industry in which Tacoma thrived for so long has changed and,
clearly, so has the Northwest power environment," continued Hockema. "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."