MARYSVILLE — The city has entered into a contract to buy the old Welco Lumber mill site adjacent to Interstate 5 on the Ebey Slough waterfront.

While the site doesn’t look like much now, with asphalt and half-torn-down buildings, the city is excited about its potential. If the sale is completed, the city would then own all of the property on Marysville’s waterfront.

An appraisal put the value at $2.78 million, although the city is testing the soil before a deal can be finalized.

It could take up to a year for those environmental studies to wrap up, said Gloria Hirashima, the city’s chief administrative officer. The appraisal assumed the property is free of hazardous substances, she said.

Hirashima said the city would be looking at the site for a variety of uses, including widening First Street, building a stormwater treatment facility, or putting in another park or trail. The purchase would come as the city has been ramping up its waterfront development. The city already is improving waterfront property it owns. It is anticipating that in the coming year it will pave a trail leading from Ebey Waterfront Park to the Qwuloolt estuary.

Hirashima said if contaminants are found the city still could decide to buy the land. However, it would be up to negotiations as to whether Welco or the city would pay for cleaning it up and how the price may change because of it. Whether it is cleaned up at all or not would depend on its future use.

Hirashima said funding for the purchase would come from a combination of sources, such as the general fund and utilities.

The 4.9 acre site was used as a lumber mill until 2007, when the housing construction industry took a downturn and the mill closed. It had been operational since the 1960s and at one time had about 150 employees. More recently the old mill has been the site of homeless encampments and fires.

Welco Lumber has since installed more lighting and removed flammable debris.

Marysville Fire Marshal Tom Maloney said most of the buildings on the site have been dismantled, and the site is now being used to store construction equipment for road crews.

The mill site lies between I-5 and the Geddes Marina, which the city purchased in 2010.