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Port to discuss Fisheries building
Steve McCasland, Bandon
Western World
January 3, 2008
http://www.bandonwesternworld.com
The
Port
of
Bandon Commission
will discuss the future of the big blue building on the waterfront
during an executive session scheduled for 8 a.m. tomorrow (Jan. 4) at
the port office on
First Street Southwest
.
In legal parlance, the purpose of the closed meeting is to discuss
pending litigation. But the underlying reason was made clear during
the commission's discussion of the agenda item "Pacific Seafood
lease update" at its regular monthly meeting on Dec. 20.
Background
Thirty years ago, the port leased the land the building occupies to
local businessman Graydon Stinnett and his partners, who constructed
the building and operated it as a seafood processing plant for several
years. The lease and building have changed hands multiple times since
then, with subsequent investors continuing to employ people to process
fish.
In the late 1990s, however, most of the processing equipment was
removed from the plant. Since then, Pacific Seafood Group of Clackamas
has operated the Bandon Fisheries Retail Market in the building,
leaving the majority of its square footage unused. The market's
employees Ñ six in summer, three or four in winter Ñ include
Stinnett, the manager, who indicated the staff does some processing of
its seafood products on-site.
According to port officials, the lease requires the building to be
used for marine industrial activities and, more specifically, as a
seafood processing plant. Beginning last spring, port staff made
multiple attempts to contact PSG in an effort to move toward returning
marine industry to the site or to renegotiate the longterm lease.
Those attempts were unsuccessful.
Eventually,
the port hired attorney Andy Jordan, of Jordan, Schrader, Ramis PC of
Portland. On Nov. 2,
Jordan
sent PSG a notice of default regarding the lease, citing the lack of
marine industry as the reason. The letter gave the company 30 days to
cure the default and avoid termination of the lease and repossession
of the property.
On Nov. 28, PSG responded that the company planned to continue to
operate the retail store on-site. It said it also would use the
premises for net, crab, and gear repair and storage, among other
marine industrial uses. Additionally, PSG said that a joint venture in
a tuna canning operation was possible in the near future.
On Dec. 12,
Jordan
responded that the retail store and gear storage and repair "do
not constitute seafood processing as intended by the lease, nor are
they established within the 30-day cure period. Therefore É the lease
is null and void and terminated as of this date." The letter told
PSG to vacate the property immediately to avoid an eviction action on
Jan. 14.
Prior to the regular commission meeting on Dec. 20, Commission
President Donny Goddard, Commissioner Robin Miller and Port Director
Alex Linke met with Stinnett and John Dulcich, a cousin of Frank
Dulcich, the founder and president of PSG.
A memo from Miller to the other commissioners and staff said John
Dulcich expressed an interest in working together to address the
port's concerns.
The memo went on to propose that commissioners extend the Jan. 14
deadline to June 30 to allow PSG and the port "to identify and
propose new uses and redevelopment opportunities" for the
property.
The
commission would be updated monthly by port staff or PSG as to the
status of the discussions, the proposal said, and would agree to
re-consider its declaration of default if the company showed progress
in identifying a real plan to beneficially use the site.
Dec. 20 regular meeting
At the Dec. 20 meeting, Miller reviewed his proposal to extend the
company's deadline until June 30, then told the commissioners that he
trusted Dulcich to follow through with finding the best use for the
site.
Dulcich then spoke, saying: "We feel the lease is valid and that
we have not breached it. We want to be a good community partner with
the port, and will look at various options/alternatives for the
property over the six months."
He said that efforts toward increasing the property's building height
limit and, possibly, changing the site's zoning (marine commercial)
"are encouraging."
Dulcich added that the company wants to continue to operate the retail
market and a small processing operation at the site. A restaurant,
business offices and high-end residential were listed as other
possible future uses.
That's
when the train derailed.
Commissioner Reg Pullen asked how the company's plans for the property
could benefit the port.
Dulcich said that development would bring more people to the port and
would increase property values. Street improvements and improved
erosion-control efforts also could result, he said.
Pullen then asked staff how much the port had spent on legal fees
regarding the lease. The answer was approximately $5,000.
Pullen: "It bothers me that the port only receives $400 a month
for an acre of the choicest waterfront property. I'm not in favor of
extending the situation further. I say we proceed with the legal
action to terminate the lease."
Goddard recused himself from the discussion because he owns a
commercial fishing vessel that delivers product to PSG.
Miller
then restated that he supported a grace period to propose and discuss
alternatives for the property, with both sides' legal positions
remaining intact.
Pullen responded, "I would consider supporting an extension if (PSG)
would renegotiate the lease at the fair market value of the property.
I think it's an outrage to wait until (the year) 2076 at $400 a month
to get the lease terminated. The port needs to get fair market value.
Four hundred dollars a month doesn't cut it."
Linke then pointed out that the port wrote the original lease.
"I couldn't support kicking Graydon out," Linke said,
implying that his pending retirement would take effect immediately if
Stinnett was banished. "I'd prefer the six-month extension to
telling them to get out."
Commissioner Steve Martizia said he felt "there should be some
way to compromise."
Pullen then agreed to have the port's attorneys look at Miller's
proposal before the commission takes action.
"I could see (an extension of) a month or two, not six
months," Pullen said.
Commissioner Ernie Amling expressed his concern for the retail
market's employees, saying, "We need to give ourselves more time
(to work something out)."
Miller then moved to table his proposal and ask staff to check with
the attorneys, retaining the Jan. 14 cutoff date. The motion passed
unanimously.
Pullen said he thought the waterfront property "could probably
bring several thousand dollars a month" in rental income for the
port.
Dulcich added that the lease was acceptable to both sides when it was
created.
"What if you put us in court and (PSG) prevails?" he asked.
"Then the lease could remain in effect until 2076. Is that worth
(a six-month delay)? I drove down here to start a dialogue. Maybe
there's a creative way to deal with this. If there's zero dialogue,
I'm not sure who wins."
Pullen then moved to "schedule an executive session in the first
week of January to discuss Robin's motion and resolve it."
The motion passed unanimously.
Linke said later that the port's attorney will be included in the
session via teleconference.
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