Port of Tacoma

Storied Tacoma shipyard in foreclosure

At nearly 90 years old, one of Tacoma’s last major shipyards may be closing down for good next month.

J.M. Martinac Shipbuilding Corp. faces a foreclosure auction of its Thea Foss Waterway shipyard July 18 on the County City Building entry plaza unless it finds new business or an angel investor to pay some $415,000 in payments and fees overdue on a $5.4 million loan its owners signed in December 2012.

The shipyard also owes Pierce County some $13,429 in property taxes for the last three years.

The shipyard, which has constructed 256 vessels since its beginning in 1924, reportedly is searching desperately to find new construction work to fill its ways at 401 East 15th Street on the east side of the Foss Waterway.

The shipyard’s last project, a 184-foot state-of-the-art longline fishing vessel called the Northern Leader, left the shipyard a year ago. Martinac built that fishing vessel for Lynden’s Alaskan Leader Fisheries.

During the construction of that vessel, Alaskan Leader loaned Martinac $5,479,000. Now it’s Alaskan Leader that is moving forward on the foreclosure action because the overdue payments and the failure to pay taxes on the property puts Martinac in default of its loan agreement.

Neither Joe Martinac Jr., the shipyard’s president, nor officials at Alaskan Leader returned phone calls and emails regarding the foreclosure this week. A sole car occupied the parking lot outside the shipyard office Thursday morning, and the office door was bolted. Calls to Martinac’s office were answered with voicemail.

During better times, Martinac was one of the premier builders of medium-sized vessels on the West Coast. During the middle of the last century, Martinac specialized in building large clippers for the tuna fishing industry. That market dried up when the industry moved to Asia and the South Pacific.

In recent years, Martinac built a series of sophisticated harbor tug boats for the U.S. Navy and for private industry. That business ended two years ago.

The shipyard had successfully weathered long dry spells before including a five-year drought at the beginning of this century when it built no new boats. Martinac had repeatedly sought business building state ferries, but the state several years ago dropped the shipyard from the list of qualified bidders because it said the shipyard’s finances didn’t pass muster.

Martinac sued the state.

In a compromise settlement, the state agreed to split work on its new class of ferries among three shipyards, Seattle’s Vigor, Whidbey Island’s Nichols Brothers and Martinac. Martinac lost that business, however, after Vigor, the state’s largest shipyard, claimed its price for work on the boats was too high. Vigor sent that work to one of its own shipyards in Everett.

Martinac championed a new design for ferries that incorporated propulsion systems that swiveled in a 360-degree arc to quickly move the boats in any direction without disengaging the power train. The state’s designers favored traditional designs with fixed propeller shafts and rudders.

While the news of Martinac’s impending demise was unwelcome to civic leaders, it was not surprising to them considering the dearth of work at the shipyard.

“It’s very disappointing,” said Port of Tacoma Commissioner Don Meyer. “But the handwriting has been on the wall for a while.”

Meyer is the retired executive director of the Foss Waterway Development Authority. The authority is charged with the revitalization of the near-downtown Tacoma industrial waterway.

If the shipyard with its towering crane and metal ship construction buildings disappears, said Meyer, the waterway will lose a colorful source of diversity and wonder for the residents living on the west side of the waterway, he said.

While the west side of the Foss has been redeveloped with condominiums, museums, apartments and restaurants, the east side remains more commercial with the shipyard, an aquatic research center and an oil tank farm among the structures along that shore.

At the Port of Tacoma, spokeswoman Tara Mattina said the impending foreclosure was news to port executives.

“It certainly will be a loss for Tacoma,” she said.

During its busiest times, the shipyard employed as many 300 workers, most of them making union wages and benefits.

If Martinac isn’t saved, it will be the latest in a string of major Tacoma shipyards that have gone under. In the early ’90s Tacoma Boatbuilding Co. closed its two shipyards. Tacoma Boat built somewhat larger vessels than Martinac including medium-endurance Coast Guard cutters, chemical incinerator ships, patrol boats and ice-breaking tug boats.

Another Tacoma shipyard, AK-WA, shut down its operations late in the ’90s. AK-WA specialized in repair and modernization work on existing vessels.

During World War II, a huge shipyard between the ends of the Hylebos and Blair Waterways built merchant ships and small escort aircraft carriers for the war effort. Some 30,000 people worked at that yard. Part of that yard is now occupied by SafeBoats Inc., which builds high speed patrol craft for the Navy and the Coast Guard and utility vessels for firefighting and police patrols in urban harbors.

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