An aerial view of the Port of Chehalis
Last year, the Port of Chehalis announced it would be receiving the largest grant in the port’s history from the U.S. Economic Development Administration in the amount of $2,577,800. Now, after submitting more paperwork, the port will likely ask the EDA for more money due to an increase in construction costs.
“Since it’s taken so long to move forward with the grant application, the construction estimate changed from last year to this year,” Randy Mueller, CEO of the port, told commissioners at their Thursday meeting.
Originally, the entire cost of the project was estimated at $3,222,300, with 80 percent of the funds coming from the EDA grant. That left the port on the hook for the remaining amount of $644,500 to complete the project, which includes the construction of two building pads that would be able to support a 136,000-square-foot building and a 120,000-square-foot building at Maurin Road Industrial Site 1.
The cost estimate has since increased to just shy of $3.5 million, so if the port did not receive extra money from the EDA, it would raise the port’s financial requirement to 25 percent of the project, or $696,000.
Mueller said that was more than the port had planned to spend and would require the port to dip below its required reserve amount.
Mueller said the port is in the process of securing a loan for the money, and has plans to ask the EDA for a larger grant allotment to help bring the port’s contribution back down to 20 percent of the project.
“The EDA has done a lot of projects and this is not the first time this has happened,” Mueller said.
The port is in the process of submitting more paperwork to show why the costs went up to hopefully secure the additional funding needed.
The $3.5 million project will be the largest infrastructure project the port has ever undertaken.
Since most local contractors aren’t able to bond for a project of that size, Rick Rouse, senior director of operations at the port, said the project will likely go to a contractor outside of the local area.
Last year, when the grant was announced, the EDA did not yet know the status of the federal budget since there was a series of continuing resolutions, so although the port was approved for the grant, it was never funded. That problem has since been taken care of, Mueller said.
“They wanted to award that much money to us, but they didn’t know how much money they had,” he said. “That’s been resolved.”
Rouse said the original amount the port asked for has already been set aside by the EDA.
“Now we’re going back asking for more because as the economy picks up and creates the demand for the land, the prices also rise,” he said.
Mueller said the Maurin Road site, also known as the Unzelman property, has garnered interest in the past. Having a filled, shovel-ready site might spur some interest with companies that previously decided not to purchase the property.
The preliminary work to the site has already been completed, such as the site design and grading plans, and many of the needed permits are in hand.
The port also plans to bring a road and utilities to the site, according to previous coverage in The Chronicle.
