Settling lawsuit, BSRE sells Point Wells back to the oil company Paramount—commercial oil operations could resume in 2026

Point Wells from Google Earth

By Tom McCormick

Historically used as a marine fuel and asphalt oil terminal, Point Wells is a low-lying property on Puget Sound located directly north of the Richmond Beach neighborhood in the City of Shoreline. 

The only access to Point Wells is a two-lane road through Richmond Beach. 

The Town of Woodway annexed Point Wells in May 2024.

Prior to 2010, Paramount of Washington, LLC (“Paramount") owned all of Point Wells, and a sister company, Paramount Petroleum Corporation, conducted marine fuel and asphalt oil terminal operations at the site. 

Seeing the potential for re-purposing the site into a large-scale residential development, Paramount asked Snohomish County to designate Point Wells as an Urban Center. 

The County Council designated the site as requested, re-zoned it, and in May 2010 enacted an updated Urban Center Development Code. 

A few days later, Paramount sold Point Wells to BSRE Point Wells, L.P. (“BSRE”), a sister company newly formed to develop Point Wells. BSRE acquired the real property (the land), but not the pier, the fuel and oil tanks, pipes, equipment, and structures. 

As part of the deal, BSRE granted Paramount Petroleum Corporation a 10-year license to keep using the property until June 2020 to conduct its historical marine fuel and asphalt oil operations. 

In June 2020, those operations stopped—there have been no transfers of marine fuel or asphalt oil since then, though the facility’s permits have been kept active, and a caretaker staff has been maintaining the property and providing security.

In 2011, BSRE submitted land use applications to Snohomish County to develop Point Wells as a high-density Urban Center. BSRE proposed to build about 3,000 residential units, in buildings as tall as 180 feet, plus over 100,000 square feet of commercial space. Snohomish County twice denied BSRE's applications due to substantial conflicts with the County's development code. 

The County's most recent denial of BSRE's applications was upheld by the state Court of Appeals in 2022, and in 2023 the Washington Supreme Court denied BSRE's petition for review. BSRE's proposed Urban Center at Point Wells is dead.

The BSRE vs. Paramount lawsuit and its settlement—Paramount once again owns all of Point Wells.

While in the midst of seeking approval for its proposed Urban Center, BSRE filed a lawsuit in 2020 against Paramount (no longer a sister company, due to it being sold), asking the court to order Paramount to remove the fuel and oil tanks, pipes, equipment, and structures owned by Paramount, and to clean up (remediate) the site. 

Responding to BSRE’s lawsuit, Paramount acknowledged its responsibility to clean up the site, if and when cleanup becomes necessary. Then Paramount asked the court to order BSRE to pay its fair share of the cleanup costs, and asked for other relief, including rescission of the 2010 purchase agreement that resulted in BSRE acquiring the property.

Trial was scheduled to start in June, but on May 31, 2024, BSRE and Paramount notified the court that, "all claims against all parties in this action have been resolved,” so the trial was cancelled. On July 3, the judge signed a court order dismissing the case with prejudice.

While the full terms of the settlement have not been disclosed, the Real Estate Excise Tax Affidavit that BSRE and Paramount filed with Snohomish County on July 2, 2024, along with the Bargain and Sale Deed, reveal that BSRE sold Point Wells back to Paramount for $10 million (fourteen years ago, in 2010, BSRE acquired the property from Paramount for $19.5 million). 

As a result of the just-completed sale, Paramount once again owns all of Point Wells—the real property (the land), and the pier, the fuel and oil tanks, pipes, equipment, and structures.

Photo by Steven H. Robinson 2018

Signs that commercial oil operations could resume in 2026.

Indications are strong that the oil company (now called Alon Asphalt) may seek to re-start commercial oil operations at Point Wells, possibly as early as 2026.

To comply with new Department of Ecology rules, Alon Asphalt recently advised the Department of Ecology that by mid-2026, it intends to construct a massive (and costly) secondary containment berm to contain oil spills from reaching Puget Sound should an oil tank leak or burst. 

Alon’s proposed secondary containment berm, nearly four football fields in length, will be sized to achieve a total height of 15 survey feet above a tidal bench mark known as the NAVD88 datum. Based on existing grade, the berm will range from one to four feet in height. 

Alon’s letter to Ecology, dated June 26, 2024, states that “the initial estimated project schedule of 24 months is still intact.”

From its submittals to the Department of Ecology, one can infer that Alon Asphalt has a vision of re-starting commercial oil operations at Point Wells as early as 2026. Another indicator of Alon Asphalt’s intent to re-start commercial oil operations is that in 2023, it completed costly repairs to the pier, replacing sixty 14-inch diameter deteriorated creosote-wood piles with sixty new 14-inch diameter galvanized steel piles. According to estimates, the work cost approximately $2.2 million.

If the Town of Woodway determines that Alon Asphalt’s nonconforming use rights have expired, the Town could deny Alon the permits it needs to construct the massive secondary containment berm.

Point Wells zoning and the Town of Woodway

Point Wells is currently zoned for development as an Urban Village. The historical use of Point Wells as a marine fuel and asphalt oil terminal is a “grandfathered” nonconforming use. 

Applicable law provides that “grandfathered” nonconforming use rights may be lost (expire), if a nonconforming use is discontinued for 12 consecutive months. 

Because there have been no transfers of marine fuel or asphalt oil at Point Wells since June 2020, it is possible that Alon Asphalt’s nonconforming use rights have expired, and that Alon is therefore prohibited from re-starting its commercial oil operations. 

Alon Asphalt will likely argue otherwise, saying that its nonconforming use rights have not expired, because it kept the facility’s permits up to date, and a caretaker staff has been maintaining the property and providing security.

When Alon Asphalt submits permit applications to the Town of Woodway to build the massive secondary containment berm, the Town will need to decide the threshold issue of whether Alon’s nonconforming use rights have expired. If the Town determines that Alon’s nonconforming use rights have expired, then it follows that the Town would deny Alon the permits it needs to build the massive secondary containment berm.

Whatever the Town decides on the nonconforming use issue and Alon’s permit applications, its decision is likely to be appealed to the courts.

Alon Asphalt would likely appeal if the Town decides that Alon ’s nonconforming use rights have expired and denies Alon's permit applications, while area residents and environmental groups who oppose the re-starting of commercial oil operations would likely appeal if the Town decides that Alon’s nonconforming use rights have not expired and approves Alon’s permit applications. 

It appears likely that the City of Shoreline would side with area residents and environmental groups who oppose the re-starting of commercial oil operations—a 2023 agreement entered into by the Town and the City provides that if the Town is called upon to make a decision on the nonconforming use issue, the Town must provide City of Shoreline "with standing to administratively appeal any such decision as an aggrieved party.”

Stayed tuned for further developments.