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Appellate judges say sale of land for controversial smelter near Newport was legal

UPDATED: Tue., April 21, 2020

A pickup parked in Newport, Washington, contains a sign opposing a proposed silicon smelter in this March 2018 photo. Appellate judges ruled Tuesday the sale of more than 170 acres of land to build the smelter near Newport was legal, though the project remains on indefinite hold after a zoning change to allow construction was rejected last year. (Becky Kramer / The Spokesman-Review)
A pickup parked in Newport, Washington, contains a sign opposing a proposed silicon smelter in this March 2018 photo. Appellate judges ruled Tuesday the sale of more than 170 acres of land to build the smelter near Newport was legal, though the project remains on indefinite hold after a zoning change to allow construction was rejected last year. (Becky Kramer / The Spokesman-Review)

A panel of Washington state appellate judges ruled Tuesday the sale of land for a controversial smelter near Newport was legal.

Construction of the silicon smelter plant on 172 acres of previously public land in Pend Oreille County has been put on hold, as county commissioners there rejected a zoning change in December that would have allowed the project to move forward.

Tyler Whitney, general counsel and assistant general manager for the Pend Oreille Public Utility District, praised the ruling in a statement issued Tuesday afternoon, saying it reaffirmed the utility district’s authority to make good financial decisions for ratepayers.

“We are very pleased that both the trial court and the court of appeals properly interpreted the broad authority of public utility districts in the exercise of their business judgment on behalf of PUD ratepayers, including the purchase and sale of real property,” the statement said. “Pend Oreille PUD is looking forward to closing the book on this case and continuing its mission of providing quality service at low cost through electric load growth.”

But the ruling might embolden other public utility providers and governments to sell land to private interests without going to a vote of the public, said Rick Eichstaedt, a Spokane-based attorney that represented the group of property owners challenging the sale.

“From a PUD standpoint, or another municipal government looking at this, they might say we get to be a little fast and loose with the rules,” Eichstaedt said.

Attorneys for the Pend Oreille PUD, the entity providing water, power and broadband internet service in the area, argued the sale of the property, finalized in August 2017, followed necessary provisions in state law. Opponents said the district, which purchased one of four parcels for the project from Pend Oreille County, didn’t properly declare the land surplus before selling it above appraised value to HiTest Sand Inc., the Canadian company interested in building the smelter, and also didn’t seek approval from voters beforehand.

A spokesman for PacWest, the subsidiary of HiTest Sand that would build the estimated $325 million project, did not return messages seeking comment on the ruling Tuesday. The county and PacWest have been involved in a public argument over communication on the project, and in January a letter was sent by PacWest to Gov. Jay Inslee indicating the project had been placed on hold.

A unanimous panel of appellate judges for Washington’s Division III of the Court of Appeals found the public utility “failed to follow statutory requirements” during the process of the sale, but that its legal authority in state law to dispose of land it owned and considered useless permitted its actions.

Eichstaedt said the nonprofit he represents was weighing its potential legal options, which could include seeking review by the Washington Supreme Court.

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