Port of Centralia and Lewis County commissioners have expressed their frustration and shock after the Centralia City Council enacted a temporary moratorium on the development of large-scale warehouses and distribution centers in an emergency vote last week.
Multiple elected officials with the port slammed the city during their Wednesday business meeting for the lack of advanced notice about the council voting on the moratorium, stating that they were unaware until the day before the agenda was released — five days before the council’s vote.
The Lewis County Board of Commissioners also responded with surprise in a Wednesday letter to the city critical of the moratorium and calling on the city and council to negotiate a development agreement that would lay out rules over development and permitting on Port of Centralia property.
The moratorium, approved unanimously Sept. 9, declares a pause of up to six months on permitting applications for large warehouses and distribution centers exceeding 250,000 square feet. The ordinance was approved on a first and final reading, with city staff noting that the move qualified for an emergency requirement due to state guidance regarding permitting timelines. The council was unified in its quest to help relax truck traffic on city roads, namely Harrison Avenue.
The moratorium only impacts future developments that have not been vested nor have gone through the permitting, design and engineering process. It will not affect distribution centers and warehouses that are already open and operating.
The port’s frustration
Port Commissioners Kyle Markstrom and Peter Lahmann spoke against the moratorium during the public comment section at the city council meeting while refraining from speaking on behalf of the port.
After public commenters at the port meeting suggested that residents were made aware of the moratorium a month before the vote, Markstrom shared his “extreme” concern about where the port lies on the city’s priority list.
“The Port of Centralia was absolutely not given advance notice of this moratorium. If the city chose to share that information with somebody other than the port prior to the meeting, that is very, very concerning to me,” he said. “I can very much say that we were absolutely blindsided by the official release of a moratorium on the city council’s agenda.”
Markstrom also acknowledged a sentiment that the port is the primary entity responsible for a deficiency in communication with the city and the county. He said that, while the port’s communications are not perfect and could be improved, the port is not at fault in this case.
“The port has been cast in the light of being the entity in this case that is not collaborating. The assertion that the lack of communication lies on the shoulders of the Port of Centralia is not correct,” Markstrom said.
Port of Centralia Commissioner Julie Shaffley stated she received a text about the moratorium from Centralia Mayor Kelly Smith Johnston the day before the council vote. In Shaffley’s words, their ensuing phone call was “heated” and “lengthy.”
“I spoke of my dislike, and also I was very insulted that the city feels that they know better what to do with the port than us three elected officials,” Shaffley said. “I felt insulted that we were basically told that we did not have the best interest of the community in our decisions.”
Centralia Mayor Kelly Smith Johnston offered a correction to her Facebook page regarding Shaffley's and Markstrom's timeline.
"I texted Commissioner Shaffley and Commissioner Markstrom at 9:30 a.m. on Thursday, Sept. 4. I told both of them that the moratorium was on the agenda to be discussed on Tuesday, Sept. 9 and offered to talk to them about this," Smith Johnston said. "City Manager Mike Thomas emailed Port Director Kyle Heaton on Sept. 4 as well. Commissioner Markstrom did not reply. Kyle Heaton replied saying thanks for the heads up and offering to meet in the future. Commissioner Shaffley reached out on Monday, Sept. 8 and asked to meet. We met over dinner for more than two hours that evening."
Port of Centralia Executive Director Kyle Heaton said the city released its new proposed regulations in July that mentioned possible restrictions on the development of large warehouses and distribution centers. Port staff extensively reviewed the regulations and provided the city with seven pages of comments and potential changes on the ordinances in August, but Heaton said the city moved forward with its vote despite those comments.
“We provided over seven pages of proposed changes that could make this somewhat better. I could go into the full ordinance and the massive problems in it, not only for the port, but for any investor looking here, this is a deterrent,” Heaton said. “We want to work with the city. We want to get a better ordinance. We’ve been trying to do that since July. We thought we were working toward that and toward their comprehensive plan adoption, which their staff shared with us to get our comments in before the end of August as they moved into this. We achieved that. We did that. The moratorium followed that.”
With the emergency moratorium, Markstrom said the city has now set the precedent that it can “invoke the power of a moratorium on anything they don’t like.”
“That is now hanging over everybody’s head that they’re willing to wield that sledgehammer,” he said.
The city modeled its moratorium after the City of Vancouver and the City of Tumwater, but Heaton said those were poor examples because the populations of those two cities and metropolitan areas don’t compare to Centralia. He added that the Vancouver moratorium included an exemption for warehouses proposed by the Port of Vancouver on port property.
Markstrom called for the city to recognize its “lack of ownership over their role in where we are today” but stated that he remains hopeful that there is a path forward.
Both Markstrom and Shaffley took exception with the city’s priorities on zoning and infrastructure. Markstrom remarked that when money was allocated to projects that the county, city and port had agreed upon, the county and the city met without the port and allocated funding to projects that “did not benefit economic development” and “left the port away from the table.”
Shaffley added that when she asked the county about the port receiving some of those funds, she was told that she could put in a bid or a proposal.
“So we can beg for the money that we helped get from the legislature?” Shaffley said. “Is that collaboration? No, I don’t feel it is.”
Centralia Councilor Norm Chapman spoke in front of the port without representing the council, calling for collaboration and leadership from the three jurisdictions.
“I come from a business world. When you have a problem, you roll up your sleeves and you fix it as adults,” Chapman said. “You would think as adults that people would put their egos aside or put whatever it is that’s causing them to not sit around the table and fix the issue. I encourage the port to take a lead and get everybody together. I’m still looking for the person with enough power to get us all together in one room so that we can fix the issues for the residents of Centralia.”
Markstrom said the port deserves respect for bringing economic development and a tax base to Centralia, claiming that in years past, numbers showed that port tenants have accounted for nearly 20% of all the tax base in Centralia.
“There is no other community in Western Washington where a port accounts for 20% of the assessed value of one town,” Markstrom said. “We get a lot of credit for the issues that come with the growth, but no credit for the things that we don’t do and the tenants we do turn away, the type of businesses that would bring things here that wouldn’t benefit the community as a whole.”
UNFI was the recipient of a number of public comments as it is the largest operating distribution center in Centralia at about 1.1 million square feet. Markstrom and Heaton defended the company for bringing in over $300 million in assessed value and for “floating” the Centralia City Light department each month through the business and occupation tax.
“UNFI is far and away the largest utility user for the City of Centralia,” Markstrom said. “To constantly point the finger at one company and overlook all of the positive things they’ve brought to a community, it’s kind of disgusting.”
Through a deep dive into the moratorium, Shaffley said the city isn’t just restricting development of facilities 250,000 square feet or larger but is also putting “tremendous” restrictions on facilities 100,000 square feet or larger, as well.
“There is a long list of criteria, down to the point of asking if the company that wants to build 250,000 if they may be automated in the future or what’s their inventory control system,” she said. “I’m sorry, that’s nobody’s business. I feel that’s heavy handed.”
Commissioners acknowledged the traffic problems that councilors and citizens in support of the moratorium referenced. Markstrom, however, believes some of the traffic concerns are “anecdotal.” He also criticized the city for not coming up with traffic data to show that the port and its tenants are the major contributor to the traffic problems in Centralia.
“I’m not saying the port doesn’t contribute to traffic. It absolutely does. I spend 95% of my time in this community. Yes, traffic is not what it was when I grew up here,” he said. “But I take a lot of pride in the jobs that the port has been able to provide and the tax base we’ve been able to generate.”
The city will host a public hearing on the moratorium on Oct. 28 during its council meeting to accept public comment.
A letter from Lewis County
The Lewis County Board of Commissioners sent a letter to the Centralia City Council on Wednesday in response to the moratorium, expressing frustration and citing “lack of coordination,” potential economic impacts and calls on the city and the Port of Centralia to negotiate a 10-year development agreement.
“It is important that all three jurisdictions come together to agree on appropriate zoning and development regulations, as well as thresholds for transportation mitigation,” the county said in the letter. “Lewis County would like to invite the City of Centralia and Port of Centralia to enter into good-faith third-party mediation with the county to produce a development agreement for the next 10 years. This would provide certainty for the jurisdictions and the community as a whole.”
In the letter, the county flexes its muscles a bit, reminding the city that Port of Centralia land and others in the city’s urban growth area have been managed through an agreement between the city and the county for nearly 20 years. The letter also cites concerns that the moratorium will prevent interested companies from investing in the area.
“Companies are looking to invest millions in the Centralia area, which is a significant economic benefit to the entire community,” states the letter. “The moratorium sends the wrong message about how we do business in Lewis County. We should be coordinating solutions and creating certainty, not moratoriums.”
The Lewis County commissioners aired similar sentiments the day before when asked about the moratorium during the board's business meeting on Tuesday. All three expressed surprise at the move. Commissioner Sean Swope in particular criticized the use of emergency procedures to pass the moratorium.
“When it comes to the emergency provision, I thought that was misused,” Swope said. “That there was no emergency. All it did was circumvent transparency and public input, and so now people that want to have input don’t get an input because they removed their normal function of the first reading and second reading.”
Commissioners Scott Brummer and Lindsey Pollock both said the county hoped to work through the issue with the city and the port, with Pollock adding that the county has the power to enforce more of its own will on permitting and other administration of Centralia’s urban growth area (UGA).
“It’s a situation where the county actually has the ability to just completely control UGA permitting, and we work very closely with the cities instead of being sort of the overbearing big brother to let them have the freedom in that,” Pollock said. “So we are hopeful that we will be able to get together with the City of Centralia and also the Port of Centralia, who are very interested parties in this and see if we can work through this with a little more conversation.”
In response to a request for comment, Heaton confirmed that the port had received a copy of the letter and said that the port was supportive of the action by the county.
“The Port of Centralia has reviewed the letter from the County Commissioners to the City of Centralia and concurs with the sentiments put forth by the county,” reads the statement. “The port echoes the county’s request for mediation so that meaningful discussions on the issues of land use and job creation can take place, and hopefully lead to a resolution that benefits the entire community.”
Centralia City Manager Michael Thomas responded to a request for comment with similar sentiments on behalf of city staff and its elected officials, saying the city welcomes the “opportunity to collaborate with all the partners involved.”
“We are interested in seeing where this leads, and we had that intent all along that this moratorium should spark conversation to come to a solution,” Thomas said. “We want to reiterate that this moratorium is temporary in nature and it’s here to provide for this opportunity to cooperate and discuss.”
While no official date or procedure for next steps have been made clear, it is likely that the three parties will now move forward with a development agreement that would dictate the future of Port of Centralia land, which sits outside the City of Centralia limits but within the city’s UGA.
According to Lewis County Community Development Director Mindy Brooks, a development agreement is traditionally between just two parties, a regulator and private land owner. However, the action from the county calls on the city and county to collaborate as the regulator of the port’s property, which sits just outside the Centralia city limits. The development agreement would dictate permitting and other development on Port of Centralia property.
The proposed cooperation highlights the complexity of the issue that is taking place in a UGA, a place where the city and the county jurisdictions meet. While buildings and homes are supported by city utilities, roads and other infrastructure are owned by the county.
Development and permitting in the Centralia UGA is currently controlled by the city under an agreement with the county. An interlocal agreement between the county and the city allows the city to enforce permitting and other rules on what is ultimately county land that has not yet been annexed by the city.
Not only is Lewis County calling for a development agreement, but according to Brooks, the county is also looking at expiring all of its UGA comanagement agreements in the near future in favor of creating a new one that applies uniformly to all cities in the county.
That action is hinted at in the letter and could also provide the county a chance to take more control of UGAs.
