After several meetings in which members split votes, and voluminous public testimony on both sides, the Port of Astoria Commission finally voted Tuesday to sign leases with Da Yang Seafoods and Bornstein Seafoods for their expansion on Pier 2.
For Commissioners James Campbell, Stephen Fulton, Ric Gerttula and Jack Bland, who all voted yes on both leases, the issues boiled down to fulfilling obligations with the state, not losing their $1 million grant with the Oregon Department of Transportation and creating jobs.
Bill Hunsinger voted no.
We just dont have a lot of money, said Fulton in his justification for voting yes.
Fulton said that as part of the deal to bring in Westerlund Log Handlers, the Port was supposed to put $750,000 in a loan reserve account within five years, in case of any effects on the new Bornstein fish plant. The Port put up piers 2 and 3 as collateral to finance a more than $10 million loan.
We have zero in the account, said Fulton, adding that the Port also hadnt done enough to keep Pier 2 in good condition. Were not in compliance.
In August 2012, the Port was awarded $1 million grant from the Oregon Department of Transportation, not including its required match of $250,000, to improve the western face and deck of Pier 2, which is nearing 100 years old. It awarded a bid on the project to Bergerson Construction and started work on the project. But it underestimated the cost of structural improvements, and Interim CEO Mike Weston reported Tuesday that an overage of $460,000 remained.
Bornstein and Da Yang, who operate on and around Pier 2, approached the Port early this year with proposals for their operations to cover improvements on parts of Pier 2, in exchange for the right to expand and potentially build new processing facilities there. Staff have repeatedly recommended moving forward with the leases.
Andrew Bornstein said theres more opportunity than he can grasp with his current facility, adding that there are constraints indoors and offloading from boats. Da Yangs General Manager Chang Lee was in Seattle and unable to make the meeting.
Please, this evening, announce that the Port of Astoria is still open for business, said John Lansing, chairman of the Ports Budget Committee and a member for nearly a decade. He added that passing the leases would make a good impression on the state for future negotiations.
The Port leased Da Yang 38,475 square feet of space at $8,122.50 per month, minus $2,444 a month in rent credits for 120 months to pay the company back for the $242,000 it will invest in improvements on Pier 2. Bornstein leased 27,000 square feet at $5,700 a month and will be paid back its $169,000 investment in rent credits over three years. Both leases last 20 years, with a 10-year extension option at the end.
This seafood cluster didnt work for the Port of Astoria under the Peter Gearin era, and its not going to work now, said Hunsinger, the lone no vote on the leases and a strident opponent of expanding seafood processing rather than cargo loading on Pier 2. He said seafood cold storage would be a waste of the valuable waterfront real estate.
Everybody in this room knows that sardines are cyclical, added Chris Connaway, who is leery about giving 20-year leases to businesses whose products could disappear and leave behind failed ventures in dilapidated buildings. Pat OGrady, owner of Warrenton Auto & Marine Repair, said there are better places for seafood cold storage.
The Port potentially owes Business Oregon, its largest lender, more than $400,000 for a loan it took out to support the Lektro electric vehicle companys expansion at the Astoria Regional Airport in Warrenton. The loan was to become a grant if Lektro could create or retain 88 full-time positions, a goal it fell about 24 short on because of a sluggish economy. Representatives from Business Oregon said they would consider crediting the jobs from seafood processing to offset the shortage on the Lektro agreement.
Hunsinger, a longtime proponent of longshoremen, said that instead of crediting part-time, low-wage seafood plan jobs, the state should be crediting the high-wage jobs with benefits such as Westerlund and longshoremen positions.
A job is a job, said Gerttula, adding that the expansion follows the Ports master plant for a seafood cluster on Pier 2. He said he had been wracking his brain, thinking of a logical cargo off of Pier 2 that could take the place of fish processing, and couldnt come up with anything. The seafood cluster makes sense.
Bland, who was integral in securing the $1 million ODOT grant, said he didnt want to risk losing it and not being able to improve Pier 2. He said that being able to create upward 120 jobs some part time and some full time is better than creating none.
I dont like turning a cargo dock into a fish dock, said Campbell, adding that in the interest of moving on and keeping state assistance forthcoming, the Port has no other choice than to sign the leases.