Posted on June 3, 2026
By Jerome Tuaño
The Port of Olympia Commission voted 3-2 to approve a $11.25 million federal grant application with Maritime Administration (MARAD) to fund the construction of a second marine terminal warehouse and dredging of shipping berth.
The grant would cover the majority of the costs for the two projects, while the port would cover the remaining amount. The warehouse, which the port aims to build to store cargo from a Brazilian pulp manufacturer and paper producer, is estimated to cost $9.7 million, up from the $6.5 million cost the port budgeted for in its 2026 capital budget.
The dredging project is estimated at $8 million, and involves removing roughly 24,000 cubic yards of sediment to be cleared out down to a depth of 40 feet across 5.36 acres.
Commissioners who voted in favor of the application believed it was a fiscally prudent strategy, while dissenting commissioners criticized the ballooning costs of the warehouse and lack of transparency in the process.
Dredging plans
The port originally planned to address the dredging, as part of its broader Budd Inlet remediation project. But it is pursuing funding now as the grant requires dredging projects to be coupled with an active infrastructure development, according to Marine Terminal Senior Manager Afsin Yilmaz.
As the warehouse is the port’s only current infrastructure project, Yilmaz said the port packaged the two projects together so the dredging component qualifies for funding.
Port Executive Director Alex Smith said the most recent dredging at the terminal happened in February 2015 and only covered a 150-foot section of the berth.
There has been significant sedimentation around the berth areas since then. Despite the federally mandated depth being 42 feet, the north end has shoaled up to a mere 25.2 feet, shrinking the usable space of the berth and making it more difficult for pilots to maneuver their vessels.
Multiple sources have confirmed the issue, including a 2026 bathymetric survey requested by the Puget Sound Pilots, U.S. Army Corps of Engineers data and private surveys.
Yilmaz added that based on their projections, the sedimentation would limit the terminal to handling one ship at a time instead of two by 2030.
The vote
Of the five commissioners, Krag Unsoeld and Jerry Toompas voted against the grant application.
Unsoeld said he was not comfortable with the application, as it would signal the port’s long-term commitment to developing the marine terminal.
“I’m in favor of the money for dredging, but I’m against lumping it in with the warehouse because that’s making a long-term commitment to developing the marine terminal in ways that I am not comfortable,” Unsoeld stated.
He also asked what penalties the port could incur from MARAD if the port ultimately decides not to construct the warehouse.
Commissioner Jasmine Vasavada, who presided over the meeting, said the commission had already moved past questions at that point when he asked the question, leaving his inquiry unanswered. Toompas focused on the cost of the warehouse, debating how much the port has budgeted for the project and pointing out how much it has risen in cost. He also expressed frustration over the amount of time they were given to decide on the issue.
“I don’t like having this short period of time to make this,” Toompas said. “And I think this is the most important decision we’ve made as a commission this year.”
In response, Commissioner Joel Hansen said the federal notice for the grant was released on April 7.
“This is what I do in my day job. These things move fast, so it’s not something that we can spend years planning for,” Hansen said.
Hansen added that doing the projects now would avoid inflated future costs and utilizing the MARAD grant reduces the port’s required match to just 30 percent of the costs. By comparison, the Washington State Department of Ecology would require a 50 percent match for remedial cleanup grants.
Commissioner Sarah Montano acknowledged ongoing debate surrounding the warehouse, but believed that securing the grant would not lock the port into a single path.
“I don’t think that conversation is over,” Montano said. ”I think I agree that we need to continue to look into the funding or the warehouse options. We just need to continue to be nimble on that business decision.”
Vasavada appreciated the staff’s business agility, but said there have to be improvements with the way they communicate on how they make decisions.
“I think the port is not yet running on all four cylinders when it comes to achieving the full level of communications that we’d like to in order for everyone to understand where we get to decisions,” Vasavada said.
She also validated community concerns regarding the port wanting to pursue major infrastructure projects, like the warehouse, before finalizing a broader master plan.
To address the issue, she called for the implementation of a 10-year capital plan and other long-term strategic frameworks to affirm the port’s operational direction.
“We’re taking this urgent decision because of the timeline of a grant, but I really urge (Smith) to land that question with this commission so that routine operational decisions don’t become very big political questions,” Vasavada said.
Vasavada also urged Smith to address outstanding questions regarding the application and to share the information with the public.
