Commissioners cite Fremont's bad debt for changes in lease agreementFremont Seafoods' lease at its facility on Pier 2 should be reassigned to Da Yang Seafoods, the Port of Astoria commissioners decided Friday, with the condition that an account be set up to pay people and businesses still owed money by Fremont.
There were some at the special commission meeting, however, who said that Fremont should be given a second chance. Representing local longshoremen, Bill Hunsinger said that Michael McLenaghan of Custom Freezers, who manages the Fremont facility, has hired local union workers, while other fish processors often bus workers in. He said that the longshoremen have always been paid, and added that it was his understanding Custom Freezers was getting financing to pay its bills.
However, one spotter pilot who was present said that he and the sardine boat he spots for are owed money by Fremont Seafoods, and that this year they delivered fish to Fremont for more than a month without receiving payment, prompting them to file a fishermen's lien.
He added that he didn't want to fly for Fremont, and knew of others who don't want to do business with the company either.
Randy Stemper of Astoria Builders Supply echoed those sentiments.
"I'm tired of Fremont, and the sooner they're out of here the happier I'll be," he said. He added he is owed money from the company as well, and though he expects to receive his payments, he encouraged the port commissioners to make sure other people got paid as well.
Da Yang is willing to cover these debts, estimated at $133,000, through the establishment of an escrow account, said Da Yang attorney Bill Bennett.
Some of the money that the company would have paid Fremont Seafoods for the facility will go into this account, and be used to pay those owed money by Fremont.
"Da Yang wants to be a good neighbor and a good business partner," Bennett said. "They can't pay twice for the same amount of stuff."
He said that Da Yang probably will not take over the lease if the escrow is not approved.
The port staff had recommended transferring the lease immediately, because Da Yang wants to make $1.8 million of improvements in the fish processing plant before the June 1 start of sardine season.
Although some port commissioners expressed sympathy for McLenaghan, those present voted unanimously for the transfer of the lease, with Dan Hess absent.
"It's almost like a soap opera with these guys," commissioner Glenn Taggart said. "It's just an ongoing battle."
In the staff report on the lease transfer, it was noted that the port signed a lease with what was then Seafood Exchange on June 22, 2001, and the company had not paid the rent by September of that year. The port has had continued problems with the company, and port attorney Heather Reynolds noted that Fremont Seafoods is currently in default of its lease, and a lawsuit from a creditor has been filed against the company.
"This has been an issue for years," port Deputy Director Bill Cook said.
The port approved the transfer with the condition that Da Yang assume payments due to local businesses and individuals from Fremont and Custom Freezers, and approved an amendment that authorized the signing of the lease after the establishment of an escrow account to pay those bills.
"We think that is this is the cleanest way to get people paid, and that part of the property making money and contributing to the community," commission president Larry Pfund said.
At the special meeting, the port also voted unanimously to sponsor a project in which the Lower Columbia Solutions Group is investigating the benefits of disposing of dredge spoils in test sites near the south jetty, and entered into an agreement with the Oregon Department of Land Conservation and Development to do that.
Commissioners also approved a conditional use permit for Englund Marine to use their new facility for retail purposes.