Darigold Inc. will build its largest ever milk drying plant in Pasco, cementing the region’s status as one of the Northwest’s leading centers for food processing.

The Seattle-based dairy cooperative intends to build a $500 million, 400,000-square-foot protein and butter plant packed with carbon-reducing features on 150 acres at the Port of Pasco’s future Reimann Industrial Center off Highway 395. The port’s commission authorized a $3.3 million purchase and sale agreement at a special meeting July 1.

However, the plant will open only after Darigold scrutinizes the impact of Washington’s new carbon rules.

“Construction of the facility and the Port of Pasco agreement are contingent upon fair and equitable treatment under all new Washington state environmental legislation, which the company is currently assessing,” it said.

The sale agreement gives Darigold 180 days to evaluate how Washington’s efforts to combat climate change will play out in its reported $2 billion business.

The policy became law this year and sets the goal of net zero emissions from industry by 2050.

Washington’s goals echo Darigold’s own intent to become carbon-neutral by 2050, which it announced in 2020.

But until rules to implement the new carbon regulations are written, it is unclear how they will impact Darigold.

“It’s a mystery,” said Randy Hayden, the port’s executive director. The deal will be the port’s biggest ever, but until it closes later this year, he cautioned against celebrating.

If built, the Darigold facility will be the largest of its type in North America, processing eight million pounds of milk a day after it opens by Labor Day 2023.

The port spent a year negotiating the deal with Darigold under the code name Project Ruby although word leaked out prior to the official announcement.

The Tri-City Development Council (TRIDEC) is working with the state to determine if incentives might be available to support the company. Karl Dye, president and chief executive officers, praised the port for running with the project once Darigold reached out.

“The Port of Pasco did a great job bringing all the partners together to really make the project work,” he said.

Both the company and the port touted the plant’s many green features – anaerobic digesting, electric vehicle charging stations and other measures. Together, they will help facilitate the conversion to an all-electric fleet, mitigate 300,000 metric tons of carbon dioxide and cut road miles traveled by 5 million.

“Darigold’s state-of-the-art facility will use the latest technology, serve as a model of sustainability and create a new market for our region’s ag producers,” said Hayden. It is the port’s largest project to date.

Stan Ryan, president and CEO of Darigold, said the protein and butter operation in Pasco would help the company meet its carbon neutrality goals.

Darigold is the processing and marketing arm of the Northwest Dairy Association, which is owned by 350 dairy enterprises in Washington, Oregon, Idaho and Montana.

Its 11 plants, including one in Sunnyside, process more than 100 billion pounds of milk annually into dairy products sold in groceries restaurants and other outlets.

The Darigold project will take up half the 300 acres in the port’s future Reimann Industrial Park property.

The port established the park to build on the success of the nearby Pasco Processing Center, home to major food processors. In 2018, it paid $6.5 million for 300 acres of farmland and associated water just east of the processing center.

Hayden said Darigold is the only firm to commit to Reimann to date, though other potential candidates have “kicked the tires.”

The $22,000 per acre price-tag is what the port paid. Darigold will acquire the water rights and pivot irrigation system that go with the property, currently used to grow alfalfa. It is expected to take the entire circle out of agriculture production.

The discussions with Darigold coincided with the port’s efforts to plan the future development, which needs roads, water, sewer, a rail spur and other utilities. It will cost nearly $16 million to ready it for construction. Hayden said work won’t start until the Darigold deal closes, he said.

Funding includes a $7.5 million appropriation in the state’s biannual capital budget, approved by the Legislature this year if the port inked a deal for a “large food processor” by late 2023. Hayden said the port will leverage local economic dollars to round out the budget.

Darigold has applied for funds from the Governor’s Strategic Reserve. Tara Lee, spokeswoman for Gov. Jay Inslee, said its application is under review.

Darigold expects to employ 200 in Pasco addition to the 1,700-plus it already employees. It will support more than 1,000 jobs in related industries in the supply chain.

The city of Pasco will provide water and sewer service to the plant, which will tap into an existing natural gas line that crosses the property.

Darigold will split its wastewater stream with half going to the city’s industrial wastewater processing reuse facility and half to the municipal treatment plant

The company will construct a wintertime wastewater retention pond to hold waste during the cold season when it cannot be sprayed on fields.

The food processing industry employs 47,000 people in Washington at 1,765 firms with a combined annual payroll of more than $2 billion, according to Food Northwest, an industry association.

Franklin County, the city of Pasco and the Tri-City Development Council (TRIDEC) supported the effort to bring Darigold to the Mid-Columbia.