Anacortes: One Town Debates Its Future

From Anacortes, Wash., you get the classic, gorgeous views of the San Juan Islands. But tourists mostly breeze by this city, thinking of it as just the gateway to greater places. Anacortes does have its own thing going, though. It’s an unusual mix of a real working city with super lovely landscape.

Changing Industries

Now, Anacortes has to figure out how to maintain that mix of beauty and industry. That’s because, just like other rural towns throughout the state, Anacortes was hit hard in recent years. In Skagit County, unemployment more than doubled during the recession. In 2010, it hit 10.7 percent and the comeback has been slower than in neighboring counties.

After 20 years as mayor, Dean Maxwell hopes he can be remembered as the guy who brought his city jobs for generations to come. “We just came through the worst recession in 80 years. A lot of cities are on the brink of insolvency," he said. "I’ve lived in Anacortes since 1957 and there are many employers that are now gone.”

In high school, Maxwell canned salmon. Those canneries are no longer there, nor the logging and lumber mills that employed a chunk of the city. Today, Shell and Texaco oil refineries are a huge part of the city’s economy. A lot of residents say that’s terrific, it’s just not enough. There’s also some boat building and marine-related work, but most agree there’s a need for more jobs, of some sort.

Planning is crucial, said Maxwell. “We’re going to end up a county in poverty if we don’t find a way to create a manufacturing base that supports the jobs we’re going to need for the future.”

When Maxwell heard a proposal to build a new plant in Anacortes, he was interested, and he especially liked that it would capitalize on something unique to the city: water.

Birth Of Tethys

Although Anacortes is about 10 miles from the Skagit River, the city has special water rights to it. Anacortes operates a brand new, $57 million water treatment plant that powers the refineries and supplies Anacortes and a few other cities with safe drinking water.

Any new facility would get its water from the plant. The mayor was approached with a new proposal from a company called Tethys, named for a Greek goddess of the sea. Tethys wanted to build an enormous beverage bottling plant, the largest in the country. Anacortes signed a contract with the company to sell it up to 5 million gallons of water a day for the next 50 years.

Then, things got complicated. The plan didn’t go over well with all the residents. Activist groups sprouted up just to fight it. Some residents said that, at times, they were working eight hours a day against the Tethys plant.

Some said they were upset they didn’t get to weigh in on that original contract, signed with Tethys in 2010. That’s a major element in the controversy.

Ryan Walters wasn’t on the City Council when the deal was signed but he's been vocal in his opposition to the proposal for more than a year. This last July he spoke out against Tethys.

We have a lot of talk about numbers of jobs, what the wages will be, what they’ll be producing, will it be environmentally friendly, what the factory will be. None of that is in writing, in a contract. We don’t know for sure that any of that’s going to happen. Is this just like the music man? Is this just a sales pitch to get in the door?

Community Support And Concerns

Tethys executives said the plant would provide about 500 jobs, but the water agreement with the city didn’t guarantee that. Critics were concerned it was just an arbitrary number. They pointed to water bottling plants around the country with only a fraction of the jobs promised by Tethys. They also cited a myriad of environmental concerns.

At a Skagit County public hearing in April, residents were invited to speak on whether or not Anacortes should expand its Urban Growth Area, a factor in the Tethys deal. As residents spoke late into the night, it became clear that unknowns were fueling suspicion.

However, among the many critics there were supporters too, like Robin Pestarino, former president of the Anacortes Chamber of Commerce. She stepped to the podium and said she was in favor of the UGA expansion.

“I’m also in favor of having a project that is going to increase the tax base in Anacortes, whether it is the one that people are talking about or another one," she said. "I happen to be in favor of Tethys, if they choose not to come to Anacortes, I’d be very sorry about that.”

In contrast, Skagit County resident Tony Harrah echoed Walters’ concerns about Tethys. Outside the hearing room, he called Tethys an "out-of-town slickster" that was selling Anacortes a bill of goods. “There are reasons why these big bottling plants come to small, rural communities. [It's] because they can basically roll over small town city councils. I see Tethys as a stalking horse for big companies like Nestle, Coca-Cola, Pepsi-Cola.”

Inroads For Other Companies?

In fact, Nestle has been trying to build a water bottling plant in the Western United States for years, including several attempts in Washington and Oregon. Always, it comes with controversy. Protestors point to towns like Fryeburg, Maine, embroiled in lawsuits with Nestle over water usage. Five years ago in McCloud, Calif., Nestle expressed interest in building a million-square-foot facility -- the size of Tethys’ proposed plant.

In July, Tethys’ Chief Executive Officer Steve Winter said he had absolutely no intention of selling the contract to another entity like Nestle. “I can’t sell the agreement. I can transfer the agreement to new owners who are meeting those commitments," he explained.

If Tethys acquired the land, the rail and whatever else they needed before actually building the plant, could a company like Nestle then come in and take over? Winter insisted such a scenario was never part of his plan, but admitted to KUOW, "Theoretically, that's possible."

Tethys Pulls Out

And then, a surprise came. After three years of debates, protests and hand-wringing, Winter sent Mayor Maxwell a letter saying the deal was off. He said other business opportunities had presented themselves and he was moving away, from Everett to Ireland.

Townspeople speculated Maxwell had been sitting on that letter for weeks, but Winter says he gave Maxwell the letter on September 10. On that day, Maxwell sent the letter to city councilmembers. He also sent them a statement in which he said the city will keep looking for opportunities for job creation.

Later, Maxwell told KUOW that the city has not been approached about reassigning the contract and that he believes the deal is dead.

Now, Anacortes as a whole still has to figure out how it’s going to bring in more jobs. Councilmember Walters said he knows how to do it. First, he says, he wants better public process. But beyond that, he also has ideas.

“Let’s not put all of our eggs in one 'five-million-gallons-of-water-a-day' basket and instead have a variety of industries here in Anacortes, each providing some number of, maybe some smaller number of, better-paying jobs for people who live here, who can afford to live here.”

All in all, there’s one thing residents in this town agree on in the long run: they can’t survive on tourism. Somehow, Anacortes has to maintain its delicate mix -- it’s got to keep on thriving and it’s got to be more than a vacation destination.

This story is part of The Big Reset, KUOW’s series that explores how the Puget Sound Region has emerged from the Great Recession.