Last year, when I was on the Port of Astoria Commission, we went to Clatsop County and asked for a $100,000 loan as part of the down payment for purchasing Tongue Point.
The proposal at that time was a simple, clear-cut purchase sales agreement, without any lease option attached.
At that time, the Port had negotiated a fixed purchase price with Washington Group in a nonbinding sales agreement. I was very supportive of acquiring Tongue Point on the basis of that agreement.
However, since then, the Washington Group has decided not to follow through on the purchase sales agreement. This is why there is a new proposal on the table for acquiring Tongue Point. The Port recently chose to enter into a lease with an option to buy, as was reported in the Sept. 29 article in The Daily Astorian ("Port signs lease for North Tongue Point").
I was present at the Sept. 28 Commission meeting when the lease option was approved. The details of the lease were discussed in executive session and not in the public portion of the meeting. While understanding confidentiality issues, I am concerned that the details of the lease were unknown to the public prior to the vote being taken.
I am also concerned that a written financial report, requested by commissioners from Port Director Jack Crider regarding the Tongue Point property, was not available at the meeting when they made the decision to approve the lease option. Handwritten notes on poster paper tacked to the wall cannot be analyzed prior to a meeting, and do not allow commissioners adequate time to review the information upon which they must make decisions. It also does not allow for a permanent record of the information upon which the commissioners base their decisions.
If the loan of $100,000 needs to come back for review before the Clatsop County Commission to see if the new lease option proposal meets the intent of the original loan, I would urge the commissioners to ask the tough questions necessary to ensure this is a viable, workable plan for economic development in Clatsop County. It might be necessary for the Port Commission and the County Commission to hold a joint executive session so that all details of the lease can be disclosed completely without jeopardizing confidentiality requirements.
It may be a good idea for the County Commission to request a written business plan with financial analysis from the Port outlining the specifics on income from tenants, possible capital improvements needed for sewage and water, current water depth at the piers, the cost of dredging for deeper water depths as well as proposed solutions for upland disposal, along with estimated costs. The equation for expenses should also include Oregon Department of State Lands charges for using the piers as moorage rather than for cargo handling.
The Port needs to prove to the county that using this $100,000 toward a Tongue Point lease with option to buy is a wise investment for future economic development. Leasing instead of immediate ownership may make it more difficult to attract grants and other government money for improvements to infrastructure. Also of concern is what happens if Washington Group decides sometime down the road that they don't want to sell after all?
The Port's recent entanglement in a lawsuit with Oregon LNG is another factor that may need consideration in the viability equation. In a Sept. 16 article in The Daily Astorian, it was reported that one of the Port's attorneys had quit and the commission had subsequently hired another attorney to defend the Port, and all five commissioners, against the Oregon LNG lawsuit ("Port files countersuit against Oregon LNG").
The last time the Port Commission hired attorneys to defend themselves, Peter Gearin and the Port over the dredging violation, it ended up costing the Port and the citizens of Clatsop County more than $600,000 in legal fees, along with nearly $200,000 in fines before the bloodletting was over. The difference is now there is no reserve to spend down.
If, in the future, a sizeable judgment were to be levied against the Port as a result of this lawsuit, having a large liability on the books could make it even more difficult for the Port to get the loans they need for development at Tongue Point, since purchased land would not be available as collateral while in the leasing phase.
Until the Port has a financial reserve, and some of its potential legal liabilities resolved, it may be better to delay acquiring Tongue Point until they have a better business deal, such as an outright purchase instead of a lease with option to buy. Rushing headlong into acquiring this property without considering present circumstances could end in frustration and failure.
As a long-term goal, I am in favor of the Port purchasing Tongue Point for future expansion and economic development. However, I am not completely convinced that now is the right time or that this lease option proposal holds the best chance for success for the future.
Kathy Sanders is a former Astoria port commissioner.