Aggregates West Goes Into Receivership to Avoid Bankruptcy

Meredith Moench is president of the Lummi Island Conservancy. For updates and additional information go to www.lummiislandquarry.com

Part 11

Attorney Lesa Starkenburg had an unexpected announcement to make at the April 10 briefing before Whatcom County Hearing Examiner Michael Bobbink. The council chambers were hushed as a stunned audience heard her tell him that her client had entered into voluntary receivership. The briefing was being held to review progress in resolving compliance issues at the Lummi Island quarry.

A legal notice in The (Everett) Herald newspaper announced that Aggregates West, Inc. and Valley View Sand and Gravel, Inc. had entered into receivership in Washington State Superior Court in Snohomish County on March 12, 2013. Both companies are owned by David Grainger of Sardis, Canada. Resource Transition Consultants, LLC was appointed by the court to take control of the companies’ assets.

Under the Washington State Receivership Act (2004), receivership is an alternative to filing bankruptcy. While protecting creditors, it may be a quicker, less expensive and more appropriate tool than bankruptcy. The court-appointed receiver can exercise all the powers of the corporation in place of any board or executive officers as is reasonably necessary to carry on the ordinary business of the corporation and to manage its affairs in the best interests of the owners and creditors. Under the guidance of an experienced receiver, a business solution may be worked out which could include sale of assets, restructuring and focus on more profitable aspects of the business. If appropriate, stalled projects may be financed and completed. Bankruptcy remains an option.

Aggregates West and Lummi Island Quarry

Aggregates West, Inc. is located in Everson, Washington, Whatcom County. The company operates the Lummi Island quarry and is a supplier of gravel and rock products, including landscape rock, quarry spalls, wall rock, railroad ballast, crushed stone, drain rocks, pea gravel, sand, limestone, and topsoil. Most of the Lummi Island product is shipped out by barge. The company owns/manages quarries and pits in Whatcom, Snohomish, and Skagit counties.

Canadian David Grainger is president of both Aggregates West, Inc. and Valley View Sand & Gravel, Inc., companies registered in the state of Washington. While Aggregates West is the operator for the Lummi Island quarry, Valley View Sand & Gravel is one of three partners comprising Lummi Rock LLC, owner of the quarry property. Mr. Grainger has been acting as both operator and managing partner for Lummi Rock, LLC since 2005 when Lummi Rock LLC was incorporated. The other partners in the Lummi Rock corporation are the Bride family of Everett, Washington and the Christopherson Family of Bremerton, Washington. Regarding whether or not he will continue to pursue the various pending permits and mine expansion, Mr. Grainger told the Hearing Examiner that he is undecided.

No Barges Since January.

As of late April, no barges had shipped from the quarry since January. A small amount of product is being excavated and processed, and gravel trucks continue to take loads out of the quarry for use on the island .

C Street Yard Empty

Aggregates West’s barge off-loading yard at Colony Wharf on C Street in Bellingham is now empty. The property is owned by the Port, and Bellingham Marine Industries has expressed an interest in expanding into the location. A vendor for Whatcom County, Aggregates West may have to find another waterfront location with approximately 2-4 upland acres for this purpose. Aggregates West also has off-loading yards in Anacortes and Everett.

Required Plans Submitted

During the April 10 briefing, Whatcom County Planning said that the stormwater and shoreline restoration plans requested by the Hearing Examiner had been submitted days before. Preliminary review indicated that the plans have deficiencies and are incomplete. Initially requested by Hearing Examiner Bobbink in October 2012, the lack of progress on the plans was the subject of a heated scolding during the February 13 status meeting (See Whatcom Watch April 2013 issue).

Authority to Revoke Operating Permit

Following up on Hearing Examiner Bobbink’s request, County Attorney Royce Buckingham confirmed the Hearing Examiner’s authority to shut down the Lummi Island quarry should he decide to do so. According to county code, the Hearing Examiner can revoke an operating permit due to non-compliance (WCC 20.94.70 and 20.92.250).

SEPA Review

The Whatcom County SEPA (State Environmental Policy Act) administrator has signaled his intention to issue a DS (Determination of Significance) for the three outstanding permit applications (project and non-project) for the Lummi Island quarry. A DS will require an Environmental Impact Statement (EIS) which could take several months to complete. The pending applications include the revised Administrative operating permit (mining service road), the retroactive Conditional Use shoreline permit (pier/loading facility), and the MRL (Mineral Resource Lands) mining expansion application. The Lummi Island Conservancy, Re Sources, and the state Department of Ecology are among those who have been urging a comprehensive environmental review of the entire scope of related activities at the quarry site.

Lummi Nation

Since 1996, Merle Jefferson, the Lummi Nation’s Executive Director of Natural Resources, has been reiterating the need for a comprehensive environmental review at the Lummi Island quarry site. He has also cited damage to treaty protected resources. This was restated to Whatcom County Planning in January 2012, and in a July 2012 letter to the Army Corps of Engineers:

The actions already taken by Lummi Rock LLC preclude the exercise of our treaty rights in this area…. The continued operation and maintenance of this facility will interfere with current and future tribal fisheries.”

Road Bait and Switch

An unpermitted road located to the west of the active quarry site was the subject of intense debate at the October 2012 appeals hearing before Hearing Examiner Bobbink. Whatcom County Planning staff issued a violation for this road in December 2010. The subject of repeated penalties, and finally a Stop Work Order in January 2012, the road lies outside of the permitted mine boundaries. Whatcom County Planning staff considers it a mining service road for ancillary mining activities and therefore it must be located completely within the permitted mine boundary. Local residents have repeatedly complained of disturbances caused by activity on this road constructed adjacent to their properties.

In an appearance of cooperation, Lummi Rock management submitted a revised operating permit application in February 2013. This included a new mining service road to be located to the east of the quarry, away from residences although still outside of approved mine boundaries. During the April 10 briefing, attorney Lesa Starkenburg stated that Lummi Rock management had changed their mind. They now want to revise the application to propose a “variation” of a road to be located, once again, to the west of the quarry despite the county’s repeated refusal to consider permitting a road on that side adjacent to residential properties. Was there ever any intention of complying?

Lummi Rock also asked the Hearing Examiner to lift the Stop Work Order on the unpermitted service road to allow hauling of large rock from the upper bench to the shoreline for barge transport to a job in Anacortes. County Attorney Buckingham stated flatly that the Hearing Examiner does not have the authority to do this. The road will remain closed.

Next Hearing on June 5

A hearing and status briefing are scheduled for June 5. The status review of pending permit applications will be combined with an appeal hearing for the February 2013 Hours of Operation permit violation and the separate appeal of penalties levied for shoreline violations.