Saws May Fall Silent -- The Last Sawmill On Lake Washington May Give Way To A Paul Allen Software Campus

When Alex Cugini Sr. bought the Barbee Mill 52 years ago, it was one of 13 sawmills on the shores of Lake Washington.

Today it's the last one left.

Soon it may be gone.

The men who toss fresh-cut boards and cut slabs of wood like so much butter are likely to be replaced by men and women who write computer software and post news to the Internet.

Billionaire Microsoft co-founder Paul Allen holds an option to buy the Barbee Mill and three other properties in order to build a campus the size of a small city. His development plans, now being reworked, include software-company offices, marinas, public trails, restaurants and possibly a hotel and housing.

If Allen decides to build a $500 million to $700 million development at Renton's Port Quendall - which seems likely - the saws will go silent.

"Now we share the stage with software and airplanes," observes Robert Cugini, grandson of the 1945 purchaser. "It's kind of a microcosm of the state economy here - from forest products to software."

The numbers bear him out. From 1988 to 1995, the number of Washington jobs in lumber and forest products fell from 41,700 to 35,500 while the number of people producing pre-packaged software - just one kind of computer product - grew from 3,700 to 17,500.

Faced with declining timber supplies, 51 Washington sawmills shut their doors during the same period. But the Barbee Mill - receiving logs by truck and by waterborne rafts - stayed open.

"It was a survivor," says Bob Dick, Washington manager of the Northwest Forestry Association. "It made it through all the tough times - which I think speaks to the management of the mill. It is kind of a poster child for the changes in the Puget Sound basin."

The mill looks much as it did in 1959, when Alex Cugini Jr. rebuilt the mill after a fire that destroyed everything except one wood warehouse and the green water tower.

The tower originally was part of the Seattle-Renton Mill at the southern tip of Lake Washington. The mill was moved during World War II to make way for an expanded airfield adjacent to Boeing's then-new Renton plant. The entire Seattle-Renton Mill, including the 95-foot water tower, was loaded on barges and floated to Port Quendall, where the Barbee Marine Yard built wooden barges. The sawmill, reopened as the Barbee Mill, was bought by Alex Cugini in 1945. The water tower bears the same logo with which the mill's logs are still branded: Bar-B, a horizontal bar over the letter B.

"It's a pretty nice place, isn't it?" Robert Cugini muses as he stands on a second-floor landing overlooking 20 acres of mills, planers, warehouses and stacks of finished lumber.

This place has been a regional landmark since the water tower was moved here and immense rafts of logs spread across the southeastern portion of Lake Washington.

Former Renton Mayor Earl Clymer remembers Barbee as one of three sawmills where he fished during his childhood in the late '30s and early '40s.

"We used to fish underneath the (wood) chips, in the shade," he recalls. "That's where the fish would be on hot summer days."

In recent years, the mill has cut back from two shifts to one. It's become tougher to find logs "at appropriate prices" and more difficult to turn a profit, says the 44-year-old Cugini, whose wavy hair tumbles out of his hardhat and down the back of his neck.

That's how it is these days even at a mill with the advantage of land and equipment that are fully paid for. The Barbee property and Pan Abode Cedar Homes across Lake Washington Boulevard North are worth more as part of a corporate campus than as forest-products businesses.

Sixty-five Barbee employees turn logs into finished lumber, mostly for the export market. Some workers use pond boats to corral logs. After sawyers cut the logs into slabs and resaw them, the green-chain gang sorts the wood into a wide variety of sizes and quality. After that, the wood is planed, defective pieces cut into shorter lengths, stacks moved to the drying kiln.

A forklift hums by, sporting a bumper sticker that proclaims, "Save a logger - eat an owl."

The third generation of Cuginis is now running the company. Robert Cugini first did manual labor during summer vacations: "I worked under some old-school foremen who took great glee in having the boss' son work for them."

Now Robert is in charge of day-to-day operations while his father, Alex Jr., chairs the board. Robert's sister, Cathy Cugini O'Neill, also is a full-time manager and sister Crissa Cugini, a lawyer, handles most of the company's legal affairs.

When the mill was rebuilt in 1959, Alex Jr. predicted it would close within 10 years to make way for more profitable real-estate development. During the 1970s, the Cugini family teamed up with the neighboring J.H. Baxter Co. to put together a plan for 60 acres of offices, 20-story apartment buildings and low-rise housing.

But the development plans have been stalled since the early 1980s because of uncertainties over how much it would cost to clean up toxic chemicals spilled north of the sawmill. The worst contamination is on the former Reilly Tar and Chemical property, which is now used as a log-sorting yard for the Barbee Mill.

Now Paul Allen's mega-development seems to be just around the corner.

Allen, in need of office space by 1999 for four companies in which he has major interests, holds options to buy the waterfront land plus the eight-acre Pan Abode parcel. The massive project could bring as much as 3 million square feet of new construction.

By November, Allen hopes to hammer out an agreement with the state Department of Ecology specifying what must be done to clean up toxic wastes. If he deems the cleanup affordable, site work would begin next spring, with occupancy of the first office buildings set by October 1999.

That makes some Barbee Mill employees nervous.

"You want the truth?" asks Art Hall, a sawyer who has worked at the mill for 21 years. "I would like to finish out my time here. I wouldn't have any problem with that at all. That's a decision for the mill, not us."

"I keep telling these guys, `Don't get too excited yet,' " Robert Cugini responds.

Not only has Allen not made the final go-ahead decision, Cugini notes, but the mill can continue operating for 15 months after the deal closes. Pan Abode has two years to move its operations.

Although Allen has bought a backup site in Issaquah, landowners and city officials dealing with Allen in Renton expect him to do the Port Quendall project.

The community response has been mostly positive so far. Leslye Bergan, a neighbor who objected to the noise and traffic a 1981 development plan would have brought, is resigned to the Allen project.

"If I had my druthers," she says, "I'd keep it nice and quiet. Something is going to happen and I feel Paul Allen is probably the best choice to do a good job. . . . I guess you could say I'm for it."

Cugini is studying what to do when the deal closes. One option is to keep the mill intact, barging it to a new location. Another is to sell the equipment at auction. One way or another, he expects it to keep operating - somewhere else.

And whatever happens to his family's mill, Cugini says, it's not the end of lumber production in the region. "The forest products industry will always be here," he says, "because this is where the trees grow. We're just in a time of transition."