MALAGA — Some are pondering what will become of about 2,800 acres of Alcoa Corporation property, including Chelan Douglas Regional Port Authority and Chelan County PUD officials.
Alcoa announced in December it would permanently decommission its aluminum plant, Wenatchee Works, in Malaga, which has been idled since 2016. The company stated work would begin immediately to prepare the site for potential redevelopment.
But the plant’s deconstruction is taking some time.
“There’s nothing ‘new’ to report about Wenatchee since the press release we issued in December,” Jim Beck, Alcoa vice president of corporate communications, wrote in an email April 5. “The work to deconstruct the smelter and prepare the site for redevelopment is getting underway. As with any closed site, we will evaluate options for reuse, although there’s nothing to announce at this time.”
Beck didn’t return calls or emails requesting more information.
The plant, which provided about 1,000 local jobs in the late 1960s, and employed about 400 people when it was idled in 2016, had three potlines capable of producing 146,000 metric tons of aluminum. The first 35 ingots of the silvery metal were poured from a huge crucible into Alcoa ingot forms on June 26, 1952, according to The World archives.
By December 2021, 18 employees reportedly remained to help with demolition and redevelopment of the site.
Meanwhile, local officials are making plans, including creating a workgroup to ensure at least some of the property is beneficial to residents, even if it is sold to an outside company.
“Their (Alcoa's) CEO, Roy Harvey, basically said they're committed to working with the community to develop a robust redevelopment reuse plan for the site,” CDRPA CEO Jim Kuntz said at a Tri-Commission meeting in late March. The Tri-Commission consists of the port, Chelan County PUD and Chelan County. “So that's good. That's a great commitment to have. I think the question many of us have is, what does that mean? How do you pinpoint what it means for a robust redevelopment reuse plan for the site?”
In addition to the former aluminum smelter, Alcoa owns 2,800 acres of surrounding property.
Kuntz said he believes Alcoa will sell the whole site in one transaction, so he reached out to local officials to create a workgroup to brainstorm ideas to help the site benefit the community, including drumming up enough money to buy the property, as the port couldn’t afford it alone. The workgroup also might encourage whoever bought the site to create outdoor activities, like trails.
Kuntz said he sent emails to several port officials and others who might be interested in participating in the workgroup. Among those were Chelan County PUD’s Kelly Boyd, chief financial and risk officer, and Kirk Hudson, general manager.
“We are working out the best way to assist with Jim Kuntz’s working group,” wrote Rachel Hansen, PUD spokesperson. “It is still early in the process.”
The PUD has an energy contract with Alcoa that expires Oct. 31, 2028, and the power in that contract can only be used for aluminum smelting at the Wenatchee Works site, Hansen wrote.
Alcoa’s contract costs have ranged from $60-$70 million per year in the last five years, she wrote. Alcoa pays a 26% share of actual costs of operations and maintenance, plus money for capital and debt reduction. The PUD sells unused power in the wholesale market on Alcoa’s behalf. Proceeds from the sale are applied to the monthly contract costs. Any shortfalls are paid by Alcoa.
When the contract ends, the power will be part of the PUD’s overall generation portfolio and managed consistent with its long-term marketing strategy, Hansen wrote.
“Alcoa is in the driver’s seat,” she said of what happens next, as the property belongs to Alcoa.
“Chelan PUD’s role is to answer questions about the contract and assist with that process as needed,” she added.
Kuntz mentioned the port has received inquiries from interested buyers from outside the state, but told them it was not in the port’s hands to sell. Port staff felt pressured, he said, to purchase the property and sell it in chunks or all together for development. But that likely wouldn’t happen this time around.
“The citizens of Chelan County, I'm fairly certain, are unaware that the redevelopment of this property is a private sector-driven process. It’s owned by a company in Pittsburgh,” he said.
Kuntz identified some “visioning concepts” for the Alcoa property at the meeting. Those include:
- Cleaning up contaminated properties to repurpose them for “job-creating economic development opportunities.”
- Setting aside most of the property in an “industrial land bank” to support development because industrial zoned property was limited. Then, new private sector businesses would diversify the economy, add to the tax base and create “family wage jobs.”
- “Create as many good paying jobs as possible per kilowatt hour.”
- “Discourage economic development opportunities that are power intensive with few jobs and few public benefits.”
Kuntz said not all of the Alcoa land is suitable for economic development, and community-oriented uses for those areas could include workforce housing, bike paths and Columbia River public access.
Additionally, the water rights and wastewater treatment plant on Alcoa benefitted one user, Kuntz included in his concepts. He proposed the assets serve “a broader community good, if possible.”
A new direction
Alcoa's future might be influenced by what's happening on neighboring industrial-zoned properties.
In late April, the port entered a purchase and sale agreement with Microsoft to buy more than 100 acres of port-owned property in the Malaga area, next to property owned by Alcoa.
The port has been putting together the pieces of what could add up to a $9.2 million deal since 2020, starting with the purchase of the 72.5-acre Lojo Orchard property for $1.37 million. In the past six months, it purchased another two adjacent parcels totaling 30 acres, for about $2.1 million total. The port authority worked with Chelan County to get those properties zoned for industrial use. Microsoft's identity as the client interested in purchasing the property was kept under wraps until April 22, though port officials earlier confirmed the purchases were being made with a specific client in mind.
The deal with Microsoft, which is in the due diligence phase, is in two parts, starting with the purchase of the Lojo property for $6.6 million followed by the other two parcels for $2.6 million.
It might also include another 70 acres of property on which the port has an option. That property is currently owned by GBI Holding Co. The port's purchase option is for $1.9 million.
Kuntz earlier said if "the client's" plans to purchase the property falls through, the properties could be sold to someone else, as industrial property is in high demand."