After the recent events surrounding the LNG lease with Oregon LNG and the current commission’s inability to grasp the fact they have a valid lease, I am more than convinced they have NOT taken the time to carefully think through the ramifications of their idea to export logs.
There is consensus in the community that the strategic plan that was set in place nearly a decade ago is sufficient for the port to follow as a blueprint for the future. Minor tweaks here and there will need to be made but the macro idea of the plan is a sound one. Judging on the way the current commission is handling (or better yet, bungling) their ideas to move the port forward, is further evidence this commission is being led by a force of egos that don’t want to admit a good plan is in place. Further compounding of their bungling is consistent bad advice from the legal firm they hired to try to get out of the Oregon LNG lease.
To give you readers and idea of what steps need to be taken to validate (or invalidate) this idea of log exporting, I will give you my experience of being a former port commissioner and how we looked at these types of businesses and our process that is determined by the outcome of the sniff test.
1. What is the job creation? New jobs. If you are going to displace other jobs, there needs to be value added jobs.
2. The boat yard revenue (which is on Pier 3) is budgeted to be $175k for fy 09/10. What is the forecasted revenue for the log export business?
3. What is the plan for the boat haulout/yard facility? I assume it will have to move to Tongue point.
4.Once the haulout facility is moved, what is the economic effect on Englund Marine who cited the haulout facility as one of the reasons they set up shop adjacent to it?
5. How long will it take (ie permits etc.) to accommodate a travelift at Tongue Point, and at what cost. There would have to be pilings and a hole big enough adjacent to the land to accommodate vessels. Construction would certainly be affected by in-water-work restrictions. The infrastructure cost of the haulout was $589,000 and that didn’t include the travelift itself ($271,000) 5 or 6 years ago. How long and at what cost will it take to get the permits. Flow lane dredge disposal is a non starter at Tongue Point and the disposal would more than likely have to deposited upland.
6. How long of a lease is Westerlund logging planning to sign on for? What is the lease rate? Where are we if the exports take a turn for the worse and Westerlund ceases to operate? One thing that is certain now, the port is not reliant on one single tenant on Pier 3.
7. Will the Westerlund lease be sufficient to provide the port with greater financial benefit than the boat yard including the cost of abandoning the current infrastructure? Assume for a moment that Westerlund leases the boat yard (6.5 acres) and that the industrial property value is still valid at $175,000. 10% of the fair market value of the land would command an annual lease of $113,750. But the port expects boat yard revenue of $175,000. Were the port to move the boat yard, the cost of new infrastructure at least as much as the last time, how can it justify spending more for less revenue. Proponents will argue that its additional log ship vessel calls, but that assumes no cruise ship vessel losses.
8. Who is Westerlund, how long have they been in business, what is their experience? How can they guarantee lease payments particularly in view of the potential investment the port will have to make to
preserve existing business.
9. Impact on community. Construction of the river walk extension is due to start soon. DSL land on the western edge of pier 3 is slated for a park. A debarking operation will be loud and intrusive to homes above the port. Has this been discussed?
As you can see, there are a lot of hoops to jump through before a log export facility is realized at the Port. While the notion of exporting logs will more than likely put a few people to work, I can’t see from a financial standpoint or a logistics standpoint of how this can possibly work at the Pier 3 location.
So, port commissioners, since you have made it painfully obvious you don’t have the collective intelligence to make sound decisions, at least take the points I listed above and follow up on them. These 9 points are critical questions that must be answered positively for the log export idea to work. Don’t force log exporting. To do so could mean the bungling of the ports greatest asset (boat haulout facility).