Tuesday night might be a turning point for the Port of Astoria – but not in a good way.
After a tense executive session, Commissioner Ric Gerttula left before the public meeting started and this morning announced his resignation. Commissioner Jack Bland left minutes in, as the remaining three commissioners readied to strike an all-important lease vote from the agenda.
Behind Gerttula's and Bland's exits were likely leases for Da Yang Seafoods and Bornstein Seafoods on Pier 2. The Port Commission depended on them to help pay for a multimillion-dollar dock reconstruction project but has instead stalled or lost both.
The commission's inaction risks a domino effect that could cost the agency more than $1 million it doesn't have.
Remaining Port Commissioners Bill Hunsinger, Stephen Fulton and Chairman James Campbell voted unanimously Tuesday to remove from the agenda Da Yang's proposal to place cold storage on Pier 2.
“The Da Yang lease has been on the table for more than eight months, and we're no further than we were eight months ago,” said Gerttula this morning. He said the Port's inaction on Da Yang was the primary reason he resigned.
Meanwhile, Hunsinger revealed that Bornstein pulled out of its proposed lease on Pier 2. It instead decided to buy an adjacent processor.
The Port remains $532,108 short on the cost of the Pier 2 project, said Interim Executive Director Mike Weston. Perpetually hamstrung during his interim stint, he appeared somewhat dejected, often resting his face in his right hand and speaking in a haggard tone.
Weston convinced the Port Commission to let him dip into its legal settlements from former counsel Heather Reynolds and David Lilly. Weston said he needs the money immediately to pay a $165,000 bill the Port owes to Bergerson Construction, the main contractor on Pier 2.
The Port Commission's inaction risks the agency having to pay back approximately $750,000 it spent on a $1 million grant from the Oregon Department of Transportation to improve Pier 2. Bland, who has repeatedly warned the commission about not losing the grant, left after it became obvious Da Yang's lease wouldn't be discussed.
Without the operations on Pier 2, the Port could also be liable to repay upward of $400,000 in loans from the Infrastructure Finance Authority, one of its major lenders.
The IFA loaned the Port $1.298 million to support the expansion of Lektro at the Astoria Regional Airport. The loan becomes a grant if Lektro can reach the equivalent of 88 full-time jobs. The company recently reported topping 70.
The IFA hasn't collected on the debt, giving the new Port Commission time to figure out a solution. Its director, Lynn Schoessler, attended a previous meeting. He said his department would consider crediting the positions created on Pier 2 against the job creation requirements at Lektro.
The Port agreed to lease proposals from Da Yang and Bornstein Sept. 24. But negotiations drastically altered the leases.
Da Yang, which had previously sought to expand its processing space, now proposes building more than 30,000 square feet of cold storage and a shipping hub on Pier 2. In addition to the cold storage and resultant jobs, it planned to invest more than $317,000 into the pier's reconstruction.
Hunsinger, a consistent opponent of the two seafood processors expanding on Pier 2, said the Port needed more information on Da Yang's new proposal. Ironically, he had stumped for a public cold storage during his opposition to Da Yang's and Bornstein's proposals to expand processing.
Bornstein Seafoods owners Andrew, Colin and Kyle Bornstein opted to buy Astoria Pacific Seafoods, located in Pier 2's warehouses since 1999.
Their father Jay Bornstein owns Astoria Pacific 50-50 with business partner Darrell Kapp. The two men,who are from Bellingham, Wash., previously announced their intention to retire.
Jay Bornstein attended the meeting, along with Chief Financial Officer Rich Griffith from Bornstein Seafoods.
Can the director direct?
Griffith and Jay Bornstein appeared baffled as the Port Commission declined to authorize Weston to assign the lease to Bornstein Seafoods. Commissioners said they want to see the final lease documents first.
Port Attorney Ronald Guerra, who asked whether the executive director has the authority to reassign a lease, soon found himself trying to take commissioners off the scent. He and Weston tried to explain that the lease assignment was a pass-through. Nothing about the operation, they added, would change.
“I would like to stress that we're looking right down the gun of hake season,” said Jay Bornstein.
“If this thing is delayed a couple weeks, we'll likely lose the sale,” he said. “There will probably be about 100 people who won't get work until much, much later in the season.”
Griffith said Bornstein could have final documents available by today. He implored the commission to hold another meeting this week to transfer the lease assignment.
Fulton said the commission would try to accommodate Bornstein. Hunsinger said he'd be gone commercial fishing.