With some difficulty, the Port of Astoria is hashing out a settlement agreement with liquefied natural gas developer Oregon LNG.

On Tuesday, the Port's attorney in the breach of contract lawsuit, Thane Tienson, said: "Nobody's going to characterize this as a great deal for the Port. It's not."

Oregon LNG's lawsuit against the Port has brought up painful memories of the previous Port administration for Commissioner Bill Hunsinger, who on Tuesday suggested suing former director Peter Gearin and former Port counsel Heather Reynolds to recoup some of the damages he believes they caused the agency.

The Port's settlement negotiations follow a long legal battle between?the Port and?Oregon LNG over the 94-acre lease of land on the Skipanon Peninsula in Warrenton. Left with little choice after federal judges sided with the company, Port commissioners have told the state of Oregon they want to renew their lease for a 30-year term.

The Port spent nearly a year attempting to avoid the renewal, which would lock in a "passthrough" deal with Oregon LNG and Oregon Department of State Lands where the Port is a middleman and doesn't make any profit.

The settlement agreement prohibits Port leaders from taking action that would impact, delay or impair the company's ability to use the Skipanon site and includes steep penalties if they do so.

Under the agreement, the Port could assign the primary lease to Oregon LNG so it would no longer be sandwiched between the state and the company.

Hunsinger griped Tuesday that the Port owned up to 18 acres of the property when the Port Commission essentially donated the land to the state in 2004 through a quitclaim deed.

"It was just a gift, basically, to the state, done to remove a clouded title," said Hunsinger. "In fact, the Port did own between 14 and 18 acres of that land. That information was not disclosed to the Port commissioners at the time."

Hunsinger wants to get that acreage back. The settlement agreement stipulates that even if the Port does get its land back, it must sell the property to Oregon LNG for a profit unless the company says otherwise.

Hunsinger said he blames Gearin and Reynolds for leading the 2004 Port commission astray. He suggested suing them for giving the commissioners bad information.

"They knew deeded land was in there," he said. "I felt the commission themselves, if they'd known they were voting on deeded land, they may have voted differently. I want to go back and file litigation against Heather Reynolds and Peter Gearin for defrauding the commission."

Tienson said he would need a lot more information before he could determine whether the Port has a case against its former employees.

Another portion of land alongside the 94-acre site is in dispute through the Oregon LNG settlement agreement. Port leaders have suggested leasing that property from the state and subleasing it to Oregon LNG at a higher rate to make up for the lack of profit in the existing lease. Oregon LNG may need the land for its docking facilities. The agreement would prohibit the Port from making a play for that acreage.

Oregon LNG and any other companies that operate under the lease agreement for the Skipanon would be restricted to building an LNG facility only.

The agreement also requires the Port to write letters of support for a variance the company needs from the city of Warrenton to build its LNG storage tanks to a certain height and to support the city of Warrenton's vacation of a platted street that runs through the Skipanon site.

"I think Oregon LNG wants as much as they can get,"?said?Commissioner Jack Bland. "Every time this thing comes back to us it's larger and larger and way beyond what the judge has ordered."

Tienson said the situation is not ideal, but the Port is in a difficult position.

"It's not a deal the commissioners would agree to outside of the predicament they're in,"?Tienson said. "You don't have a lot of options unless you want to go the appeal route."

The Port has filed an appeal of the decision with the Ninth?Circuit Court of Appeals. The deadline to file an appellate brief is May 17. Another meeting may be scheduled within the next week for the Port Commission to approve the settlement agreement.


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