Clatsop County taxpayers deserve answers about a $4 million verdict against the Port of Astoria, but they’ve heard mostly silence except from the jury and judge.
And what little they’ve heard isn’t good.
The verdict, another black eye for the Port, was the result of a breach of contract lawsuit filed by a Portland hotelier, Param Hotel Corp., which sought in 2015 to take over the lease of the Astoria Riverwalk Inn on Port property. Although Port Executive Director Jim Knight was dismissed as an individual defendant, the jury’s verdict found Knight knowingly made fraudulent misrepresentations to Param’s owner, Ganesh Sonpatki.
The Riverwalk Inn at the time was being operated by Brad Smithart, who was heavily indebted, and Param was negotiating to take over the lease. Testimony showed the Port Commission approved contracting with Param, but the lease wasn’t executed. The Port eventually terminated Smithart’s lease and awarded it on a short-term basis to a local firm, Astoria Hospitality Ventures, which had been formed by Chester Trabucco and Astoria native William Orr, a brother-in-law of then Port Commissioner Stephen Fulton.
During testimony Knight said terminating Smithart’s lease before the deal with Param closed was necessary because of the rundown state of the hotel, bad operations, Smithart’s growing debts and his pursuit of other suitors behind Sonpatki’s back.
Afterward, however, at a hearing to determine whether Param should be granted a seven-year lease for the hotel or get up to the $4 million in damages, Clatsop County Circuit Court Judge Dawn McIntosh said she “did not find the testimony of Mr. Knight to be particularly credible.” Param’s attorney has indicated the hotelier would opt to assume the lease in November 2018, after Astoria Hospitality’s Ventures’ term expires.
Following the verdict, there wasn’t much fallout:
• The Port’s attorney instructed commissioners and staff to remain quiet while future legal strategy is determined.
• Port Commission President Frank Spence said he supports Knight “wholeheartedly. I have no doubts whatsoever on his capability.”
• Spence placed much of the blame for the verdict on Fulton, who publicly recused himself during Port discussions on the Riverwalk Inn, but testimony showed he was in contact during that time behind the scenes with Trabucco through text messages — some of which didn’t show up on his phone but were found on Trabucco’s. Fulton lost re-election in May.
• At its only public meeting since the verdict, Port commissioners did not discuss the verdict but gave Knight a vote of confidence by inking him to a three-year contract extension with a 4 percent pay increase.
Taxpayers deserve more answers than just statements of support and blame. There are questions that need explanations:
• Will the Port appeal and how will it cover its legal costs?
• How will it move forward with a relationship with Param as a result of the more-than-rocky start?
• What will happen to Trabucco’s and Orr’s vision for a Marina Village at the Uniontown property with the hotel as a centerpiece after Astoria Hospitality Ventures relinquishes operation of the facility?
A huge legal battle was fought over the hotel property and it could be an amazing asset for the Port and city. It’s vital that relations be rebuilt with Param in order to arrive at the best possible outcome for the local economy and the aesthetics of the waterfront.
Importantly, commissioners and staff should also be discussing what lessons were learned to prevent future legal mistakes in contract negotiations, and what steps can be taken to raise the confidence of businesses who contract with the Port. Knight, who has gained the community’s trust as a low-key, sensible manager during his tenure, should address the questions with the commission and staff, and with the public to boost that confidence.
That will take more than silence.