Port of Olympia, it’s time to raise Weyerhaeuser’s rent


The Weyerhaeuser Company is doing great these days. With net earnings of $2.6 billion last year, the company proclaimed, “Our 2021 financial performance was the strongest on record.”

Raw log prices have skyrocketed. If the Asian Pacific region can stave off a collapse of its highly leveraged real estate markets, prices will stay high and Washington trees will keep floating westward. The value of log exports from the Port of Olympia rose 56% between 2020 and 2021, from $90 million to $160 million.

Does the Port of Olympia’s Marine Terminal share in these boom times for Weyerhaeuser? The short answer is, No. The Port gets paid for moving logs, regardless of their value.

The Weyerhaeuser Olympia Log Yard and its surrounding area. Showing the comparison of size to the nearby businesses. The lumber all shows in tan in the satellite imagery. 

Scope and Size

The Port leases almost 25 log-yard acres to Weyerhaeuser at bargain prices, subsidizing many of the environmental and infrastructure costs. Now that the time has come around to renegotiate the Weyerhaeuser lease, the Port must do better cost accounting and figure out a price that is fair to Thurston County taxpayers.

Back in 2005, the Port set a rent of $500 an acre per month. By today’s prices, you’d be lucky to find a room in an Olympia apartment for twice that amount. There is no telling what the opportunity cost of running a Marine Terminal has been, compared to other potential uses of Peninsula property now used for moving logs.

The public sees little value in the Port’s shipping business. According to its Port Vision 2050 survey in 2018, only 16% of respondents said that marine terminal operations first came to mind when they think of the Port, and only 14% saw shipping as a priority for revenue growth. An underwhelming 4.5% named shipping their top priority for the Port.

Public instincts are sound. As an operating unit, the Marine Terminal is the Port’s biggest loser.

Some information about Marine Terminal performance can be gleaned from a Port-wide economic impact study delivered by Martin Associates in December of 2021. This was a follow-on to an analysis it performed in 2015. While the rest of the Port’s operations at least held steady over five years, the Marine Terminal unit showed a clear decline by all measures.

Compared to 2015, the Marine Terminal provided 15% fewer direct jobs and 18% fewer jobs overall by 2020. Business revenues from the Marine Terminal declined a whopping 37% and local purchases were down 17.6%. Local and state tax revenues from the Marine Terminal went down almost 29%. Even with a few odd imports and exports here and there, the core log and recent dairy cattle cargo business just couldn’t make up for the loss of fracking material imports.

For those who believe that the Marine Terminal at least provides great jobs, Martin Associates delivered more bad news. Their study found that only 8% of the direct jobs, and 4% of the indirect jobs “supported” by the Port, were related to the Marine Terminal. The average salary produced by the Marine Terminal, while better than Thurston County as a whole, still failed to match the average state wage. Trucking, not longshore work, accounts for the lion’s share of the jobs related to moving cargo at the Port.

While it is natural to focus on the waterside when considering the Marine Terminal, that misses half the picture. Logs must move in by land before they move out by sea. Olympians pay a disproportionate price for the Marine Terminal with its impact on the roads, traffic safety, and diesel fumes.

With the current heavy demand on ports worldwide, the first half of 2022 looked like a banner year for maritime operations. While it usually loses over $1.5 million a year, the Marine Terminal operated in the black through June. Yet the bulk log carriers that regularly call at Olympia’s Marine Terminal, such as the Global Forest or the Global Discovery, are just as likely to call at the Port of Longview where Weyerhaeuser controls its own log yard (and recently had to settle with Columbia Riverkeeper over stormwater discharges).

The Port of Longview ships two to three times more logs to Asia than Olympia does. It, too, has seen a dramatic rise in log export values. When Martin Associates looked at Longview’s economic benefits, they told a story of growth: more shipping, more jobs, growing importance in the local economy, and average salaries that match statewide incomes. How low is our shrinking port willing to go to compete with Longview for Weyerhaeuser’s business?

According to its strategic business plan, Longview’s goal is to “achieve a positive financial return for each asset within the leased marine Terminal Portfolio.” The Port of Olympia should set the same goal. It should know exactly how much rent it must collect from Weyerhaeuser for the Marine Terminal to achieve a positive financial return year after year. It should refuse to go lower. It should lease for a shorter term that accounts for the increasing volatility of the global market. Weyerhaeuser can afford to be a strong community partner. Let’s see if it really wants to pay its fair share.

Helen Wheatley currently serves on the Board of Supervisors of the Thurston Conservation District. Her views are her own and not necessarily those of The JOLT's staff or board of directors. 

UPDATE August 31, 2022:  Port of Longview's Marketing Communications Manager, Ashley Helenberg, sent this note to The JOLT today: 

"Weyerhaeuser is not a Port of Longview log customer. It's a common misconception because of their proximity to our facilities, but they have their own private docks downriver of our public port facility.  Therefore, a comparison between the Port of Longview and Port of Olympia in this case can't accurately be made."



7 comments on this item Please log in to comment by clicking here

  • Claire

    The Port of Olympia needs to be self-sustaining. I am tired of subsidizing the Ports operations. Granted, the Port employs a bunch folks for well-paying jobs, which help our local economy.

    However, the Port must divize a plan to be self-sustaining.

    Monday, August 29, 2022 Report this

  • Southsoundguy

    Just eliminate the Port entity.

    Monday, August 29, 2022 Report this

  • BobJacobs

    Our Port District has four business operations. Three of them can be self-sustaining -- Marina/Boatworks, Airport, and Read Estate.

    The fourth business operation is the Marine Terminal. It generates the most income and the most losses. It cannot be self-sustaining because it is economically obsolete. The reason is its location -- naturally shallow water, far from trading partners, with little land, etc.. In short, it lacks all the attributes one looks for in a marine shipping terminal location.

    So why is it even here? History. Before I-5, most of the goods needed by residents of Thurston county and even neighboring counties came by water through Olympia, the southernmost point in Puget Sound. Our Marine Terminal was needed and could command fees needed to sustain it. But I-5 created a viable alternative. The Marine Terminal is kept alive with expensive subsidies from Thurston County taxpayers. The deficits/subsidies have totaled many millions, and will continue because Olympia can't compete with better-located marine terminals.

    It is way past time to face up to this and close the Marine Terminal.

    Bob Jacobs

    Tuesday, August 30, 2022 Report this

  • FirstOtter

    Let's get rid of the Port completely. This includes the Olympia Airport, which is currently a taxpayer subsidized private airport for wealthy private aircraft owners. Instead of it being for the wealthy few, let's turn it into a recreational area for the not so wealthy many. Let's put in a softball field or two, a soccer pitch, a running track around the perimeter, a fenced, off leash dog park, a picnic area in the forested section, keep the runway for Park And Ride use on weekdays and car shows on the weekends. Put in a lighted horse arena, covered, please! The hangers can be leased out to small business owners, or people who want something larger than a storage unit, or even used by the county for its big equipment.

    Wednesday, August 31, 2022 Report this

  • JJmama

    Excellent article, Helen.

    I learned a lot more about the Marine Terminal than I knew before....and I've been fairly closely following the Port of Olympia for quite a few years. My only disagreement is in offering this log shipping opportunity AT ALL any longer to Weyerhaeuser.

    The renewal lease process for this operation is coming up starting this next month...and we must NOT renew this lease.

    I am truly in dumbstruck disbelief finding out the $500/month rent figure.

    How is it possible that the Port of Olympia has been charging a multi-billion dollar corporation with vast land holdings and profits....far less rent for 25 prime acres of our precious waterfront, than it costs for a single person to rent a tiny studio apartment in this same town???

    The Port (read: our taxes---not Weyerhaeuser) spent over $12M on a storm water system to handle the log operation effluent--which then failed--and it became necessary to sue the Port to fix the ecological detriment, resulting in a legal payout of more than $****....not counting legal fees and penalties. This kind of story is repeated over and over at the Marine Terminal....an entity which closes off and occupies a huge chunk of our most precious public waterfront real estate, yet provides few jobs---and less all the time.

    It is SO beyond time to shut down the Marine Terminal!!

    Our past Olympia mayor Bob Jacobs (who I see also provided public comment for this article) wrote a position paper over 30 years ago on the unviable nature of the Marine Terminal. It has only gotten worse since then, not better.

    It's an unsightly, inaccessible, polluting, expensive boondoggle of an operation and a colossal piece of corporate welfare.

    The community must unite to CLOSE DOWN the Marine Terminal.

    Thursday, September 1, 2022 Report this

  • JJmama

    (Note: Not sure why JOLT couldn't print the six-hundred thousand dollar figure I wrote as a number in my comment above, but it translated as "$****". This serves as a correction for that....)

    Thursday, September 1, 2022 Report this

  • H_Wheatley

    I acknowledge the correction that rather than stating "the Port of Longview ships two to three times more logs," I should have stated that "two to three times more logs ship from Longview." My export figures come from the United States Census Bureau, which tracks commodity export data by Port location regardless of who moves the logs. My comparison of exports from Olympia and exports from Longview is accurate. The fact that the Port of Olympia is competing with Weyerhaeuser itself in Longview only reinforces the question of whether Weyerhaeuser would ever be willing to export from Olympia without public subsidies. The differences between the Martin Associates studies and the strategic goals of the two public ports remains a fair comparison -- and makes it worth considering if not maintaining a log yard for Weyerhaeuser is a factor in the Port of Longview's relative success.

    Tuesday, September 6, 2022 Report this