Seattle-based maritime conglomerate Saltchuk has dropped plans to buy Kimberly-Clark’s 66-acre former mill site on Everett’s waterfront as a new location for its 250-employee Foss Maritime shipyard.

Both companies confirmed Wednesday that the sale agreement, announced in October 2013, has been terminated.

While inspecting the site, Saltchuk found problems with soil stability and seismic and environmental conditions at the property, said company spokeswoman Emily Reiter.

Reiter said the two companies were unable to agree on who would pay for cleanup, restoration and repair of the property, ultimately leading to the deal’s termination.

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The plan had been to move the shipyard to Everett but keep at Lake Union the 100-employee Foss headquarters as well as the corporate offices used by Saltchuk to oversee several other marine and transportation businesses.

Foss operates a fleet of 180 tugs and barges, and has 1,600 employees. However, its shipbuilding and repair operation is limited by the size of its shipyard and dry docks, as well as the size of the locks and depth of Lake Union, Reiter said.

Moving the shipyard to Everett would have enabled the company to broaden its market with a deep-water facility for larger ships than the current yard can accommodate.

Reiter said Saltchuk is still interested in expanding the Foss shipyard but had not scouted out a second choice in case the Kimberly-Clark deal fell through.

Everett Mayor Ray Stephanson, who had called the deal a “win-win for Everett and our economic future” when the deal was announced in October, said Wednesday he hopes the two companies will resume their discussions.

“Preserving our working waterfront is important, and I believe a maritime use is a great fit for this unique site,” he said in a written statement.

Kimberly-Clark spokesman Bob Brand said the company plans to put the property back on the market immediately.

Information from Seattle Times archives is included in this story.

Coral Garnick: 206-464-2422 or cgarnick@seattletimes.com. On Twitter @coralgarnick