Weyerhaeuser Chip Export Facility Tacoma, WA

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Weyerhaeuser Chip Export FacilityTacoma, WA
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The Business

• Export of wood chips (used in the manufacture of
  paper) primarily to Asia
• Also an integral part of our domestic chip
  supply chain
• 10-15 ships per year
• Approximately 60MM in revenue in 2004
• 10 full time employees

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Weyerhaeuser Tacoma Chip Yard
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Site Attributes

• 25 acre site with 23 paved/fenced acres
• Deep water access
• 8,180sf wood and concrete dock
• Nine rail lines (7360 ft) w/ 10 switches
• Multiple buildings
• Rail car and full truck chip dumps
• Specialty conveyor systems
• 25-30MM to recreate infrastructure

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Weyerhaeuser Tacoma Chip Yard
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Title and Eminent Domain Issues

• Weyerhaeuser entered into a twenty year lease
  with the Port of Tacoma in 1972.
• The lease had five successive five year extension
  options (through 2017 at tenants option).
• In 2002, the Port approached the business about
  the need to widen the Blair Waterway for safety
  reasons.
• In 2004, after two years of negotiating behind
  the scenes with the business, RES got involved
  when condemnation of the entire site was
  threatened by the Port (our landlord).
• After six months of negotiations and
  consideration of multiple relocation and
  reconfiguration options, The Port (our landlord)
  filed suit to condemn our leasehold interest!

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Title and Eminent Domain Issues

• WHAT?
• - Of course a landlord could not condemn its
  own lease right
• - Certainly not after 33 years of being a good
  tenant and with, at tenants option, 13 years
  left on the term right

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Key Points

• Corporate Real Estate should be involved in any
  potential eminent domain action from the very
  beginning.
• Try to understand the real reason for the taking.
  
• Get the best legal counsel available.
• Fully understand your state laws and your rights
  (or lack there of).
• Get qualified appraisers for both real property
  and personal property.
• Begin your contingency planning early for your
  operation as you will likely lose possession and
  it could happen in a hurry!