After several months of talks, Port of Longview is inching closer to striking a deal with International Raw Materials to run an upgraded bulk facility that could translate into new jobs and millions of dollars of new revenue at Berths 1 and 2.
While negotiations are taking longer than expected, port staff says they are confident the new tenant will provide a much-needed boost to the previously underused Bridgeview Terminal.
International Raw Materials used the terminal from 1981 but then sold the rights to Kinder Morgan in 2001. At the time, it was largely suspected that Kinder Morgan only purchased rights to the terminal to shut out competition and intended to rely on Port of Portland docks more heavily, said Commissioner Bob Bagaason. (Kinder Morgan has denied this claim, according to Commissioner Doug Averett.)
Regardless, Port of Longview hasn’t been pleased with the low cargo volumes moving through Berths 1 and 2, and for years it has wanted out of its agreement with Kinder Morgan. So when Kinder Morgan’s lease recently expired, the port rebranded Berths 1 and 2 as the “Bridgeview Terminal” and began marketing it to new potential clients last September. The idea was to attract a tenant who could ship greater volumes of the same products the berths have handled historically, including bulk minerals, fertilizers and agricultural products such as pot ash, soda ash and soybean meal.
Kinder Morgan, IRM and S.S.A. Marine submitted proposals, but IRM was selected as the favored proposal because it could guarantee the highest volume of products, according to port commissioners.
Originally the port had been scheduled to complete lease negotiations by March. Five months later, the port still hasn’t signed an agreement with IRM. It’s not clear what’s causing the delay because negotiations are private. But at least two significant details emerged at this week’s port commission meetings, and at least one commissioner isn’t happy about the outcome so far.
Commissioners Averett and Jeff Wilson approved the port to pursuing a five-year lease with IRM, with three five-year renewal options. But Commissioner Bagaason is concerned five years is too short, especially because the port plans on investing $1 million into repairing the aged berths before IRM moves in.
“It’s shortsighted to go with five years, because they could just cut and run,” Bagasson said. “Especially since we’re going to ponying up $1 million for repairs. How long will it take to get that money back? Are we going to operating on a zero budget for the first couple of years and nothing is coming back in? And then only to realize three years of profit after that? Seems like a poor business formula.”
Wilson noted that the repairs are needed regardless of the tenant. Both he and Averett thought that five years would allow the port and IRM to test out the agreement to see if it works for both sides.
Wilson urged the public to not pass judgment on the deal until more details can be made public.
“Before anybody jumps to any conclusions or opinions, the document that is still being worked on ... nothing has been concluded, and it’s a work in progress,” Wilson said.
Averett said the deal will have a big impact on the waterfront.
“(Kinder Morgan hasn’t) produced the volume that facility was destined to do. What we’re hoping with IRM is that they exceed that by quite a bit ... that naturally will create more jobs for tugs, pilots and railroad personnel and longshoremen,” Averett said.
There is no timeline yet for when negotiations will be complete, but the clock is ticking. The port’s budget process will start in October, so any request for funding of facilities repairs would likely have to be approved with the 2018 budget this fall.
Tim Mahoney, IRM spokesman, declined to offer details about the deal but said the company was eager to start operations in Longview.
“We’ve got a whole host of reasons why we’re excited (to get to the Port of Longview). We got a lot of history with that port and we’re anxious to get back into it,” Mahoney said.