Warehouse mediation disagreements spill into public during Centralia port and city council meetings

Riverside apartments or industrial development?

The city, the port and the county remain at odds over how to develop the industrial areas west of Harrison Avenue after weeks of negotiations over the Centralia warehouse and distribution moratorium.

The latest snag came during a recent mediation meeting when city officials proposed developing industrial areas on the west side of Centralia near the Chehalis River as mixed-use properties to include residential, commercial, retail and industrial uses.

A public meeting between the Logistics Property Company (LPC) and the city intended to answer questions about development in the area highlighted the remaining gap between the desires of the city and the Port of Centralia.

Port Commissioner Ally Pickard first reported a new approach to development during a port meeting on Wednesday, June 3. According to Pickard, the city identified a specific plot of riverside land currently owned by the Steelhammer family as a target for mixed-use development.

"One of the ideas that came forward was this idea of that particular property being mixed use with residential or high-end luxury condos, commercial, like restaurants, etc., and industrial," Pickard said.

Pickard remained outwardly positive, but the proposal was not well received by the port commission. Pickard herself raised concerns over the idea of negotiating development of privately-owned land. Commissioner Kyle Markstrom said the proposal was "hair raising" and suggested that the City of Centralia was "confused as to what their role is."

"Those properties have been zoned industrial for a very, very long time, and then now all of a sudden, they're talking about pulling the rug out from under a landowner who's owned this property for many, many decades," Markstrom said. "That's really concerning."

Throughout the meeting, the commissioners referred back to an email sent by Centralia City Manager Michael Thomas to the Centralia City Council.

In the email, which was included in the port commissioners' meeting agenda packet Wednesday and was acquired by The Chronicle, Thomas summarizes a May 28 mediation meeting between the port, Lewis County and the city. Thomas and Centralia Community Development Director Emil Pierson attended the meeting without a usual member of the negotiation team, Centralia Deputy Mayor Kelly Smith Johnston.

According to the email, Thomas and Pierson reiterated the city's confidence in its warehouse moratorium during the meeting. Thomas outlined the city's position that it is in control of zoning for the Steelhammer property, which is within the city limits, and that the city is prepared to "leave the ground fallow" if development does not meet the city's desires.

"We still do not think that warehouses and distribution centers are the 'highest and best' use of the land," reads the emails.

Thomas went on to explain that he and Pierson suggested mixed-use development as a middle ground that would allow development, but move the area away from the construction of large warehouses. Thomas also refers to a planned visit to the city council by LPC, with hope that they would bring new ideas for development of port and private properties in the northwest corner of Centralia.

LPC is currently developing a roughly 600,000-square-foot warehouse facility on Harrison Avenue north of Reynolds Avenue.

According to both the email from Thomas and reports from Pickard, the local governments agreed to cancel their June 4 mediation meeting in anticipation of the presentation from LPC to the City of Centralia.

During the June 3 port meeting, Pickard appeared to believe that the presentation was an essential next step to moving forward in the mediation process.

"We all want to see this completed, and you know, get out of mediation, and really it just comes down to can LPC and the city agree to terms of development," Pickard said.

That meeting, however, may not have gone as city and port officials had hoped.

Before the presentation even began Tuesday night, Eric Carlson, a relative of the Steelhammer family and their legal representation, testified during public comment that the family is opposed to "any possible changes to zoning of the property that's not currently zoned M2 industrial."

Smith Johnston pushed back later in the evening and said "no one is proposing a change to the industrial zoning."

Shortly after, LPC Western Region Executive Dennis Rice gave a roughly five-minute presentation on his company's plan for development in the area before he was grilled by councilors for nearly an hour.

LPC's plan includes the possibility of building between six and nine warehouses totaling more than 4 million square feet in space.

Some councilors appeared unsatisfied with Rice's presentation and responses. Smith Johnston and the newest member of the council, Councilor Jan Nontell, led the most intense lines of questioning.

Nontell asked questions about automation, responsible development, truck routes and energy use. She often questioned Rice's responses and was openly critical of allowing broad warehouse development as planned by LPC, at times offering comments as opposed to asking questions.

"How is it responsible for development to build warehouses and distribution centers, which have a high likelihood of automating?" Nontell asked.

She was clearly unsatisfied with Rice's response that his company was not seeing widespread automation in its properties.

Smith Johnston frequently questioned LPC's commitment to being a "community partner, not just a landlord."

Smith Johnston, focusing mostly on community amenities, asked Rice to provide additional information on the amenities LPC had built in other communities where it had led development She at times questioned apparent changes to the agreement between LPC and the city for local development, suggesting that LPC had not followed through on some of the infrastructure it had originally agreed to build, such as a roundabout on Harrison Avenue near its new warehouse.

"It does feel a little bit like a bait and switch to say, 'Hey, we're offering these things, and oh yeah, we're going to take them away,' and I worry that that would continue," Smith Johnston said.

Rice responded that the company had negotiated to fund the majority of a new sewer line near the building instead of a nearby roundabout and argued that LPC would offer to construct more developments or amenities if it was able to develop more properties in the area.

"You can't burden one building with a roundabout and regional sewer and walking trails," Rice said. "If you could spread those costs over a larger development, then you can afford to do that stuff."

After an hour of discussion and exhausting all councilor questions, the session finally came to an end. Centralia Mayor Chris Brewer acknowledged the intensity of the questions at the end of the discussion before moving to the next agenda item, but also defended the council and said it was important that the council ask "investigatory questions."

"I know that the line of questioning might have felt kind of like Congress was questioning somebody," Brewer said. "I don't think that council would be doing our jobs if we just nodded yes to everything."

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