RSG Forest Products has agreed to sell six acres to the Port of Longview for $2.87 million, clearing a major hurdle to start construction of a $150 million grain elevator and heading off a costly and lengthy battle over the port’s claim of eminent domain.

Port commissioners approved an option Thursday to pay $1.18 million toward the total cost of the land. The remaining 60 percent — $1.69 million — will be paid by EGT, the company that plans to build the grain elevator. The port will lease the land to EGT for 80 years.

The terminal is expected to employ about 50 people and add 30 ancillary jobs to the community.

The port is awaiting final approval from EGT, which was formed by Bunge North America Inc. and Japan-based Itochu Inc. Construction would likely start this summer and bring about 250 jobs to the area, according to the port. EGT would also build a rail line for the grain terminal, which RSG could use for log transport.

“It’s nice to move ahead,” port Commissioner Bob Bagaason said.

The port and EGT have 180 days to buy the property.

Kalama-based RSG had resisted selling the land to the port, saying it planned to build a $100 million sawmill on its 54-acre site. Now it will be “very difficult” to build the sawmill on the remaining 48-acre parcel, said Greg Mobley, RSG chief financial officer.

But the plan isn’t dead, he added, and RSG will decide the fate of the sawmill after the port buys the land.

“For us, in the planning stage, it’s still wait and see,” Mobley said.

Port commissioners voted last fall to force RSG to sell via eminent domain, and Cowlitz County Superior Court Judge Steve Warning sided with the port in December. RSG appealed but agreed to settle to save money, Mobley said.

“Instead of putting money into the lawyers’ pockets, the port can save it for their project, and we can save it for our project,” he said.

RSG bought the 54-acre parcel in 2005 for about $13 million, or roughly $240,000 per acre. The company is currently leasing the property to Pacific Lumber for log storage.

The company sold the six acres to the port for $470,000 per acre. The six-acre parcel was appraised at $1.1 million, and EGT kicked in the difference to speed up the acquisition of the land, port director Ken O’Hollaren said.

The port expects to start construction of a new, $6 million Berth 9 in October to service the grain elevator.

Related articles:

RSG appeals eminent domain ruling  (Jan. 19)

Eminent domain ruling favors Port of Longview  (Dec. 9, 2008)

Port to seek eminent domain acquisition of RSG land  (Oct. 29, 2008)