Commission Vice President Baker invited comments from the audience before taking the agenda item.

Bart Phillips

Bart Phillips stated he is President of the Columbia River Economic Development Council and supports the transaction. He stated that CREDC also supports the Port entertaining sales of property if it meets both the Port’s and community’s economic development objective. Mr. Phillips added that CREDC introduced Roy Bennion to the Port and indicated Mr. Bennion and his client could bring 800 family wage jobs to this community.

Mr. Phillips also stated he would urge the Port to move aggressively with developing the balance of the Reufner property. He indicated that CREDC has shown the property quite significantly over the last several months and there is significant demand.

Eric Holmes

Eric Holmes, City of Vancouver Economic Development Manager, stated the City of Vancouver also supports this transaction. He indicated this project is good not only for the Port, but for the City of Vancouver, the County and the rest of the region. Mr. Holmes stated the City is ready and willing to assist with any subsequent permitting necessary to bring this transaction to fruition.

ACTION ITEM

Sutherland Development, LLC - Option Agreement for Parcel 8

Director of Facilities Shuck stated action item C-1 is for the approval of an Option Agreement with Sutherland Development, LLC to acquire through either a long-term lease or a sale of all or a minimum portion the Parcel 8 property.  He added that the Port has been working with Sutherland Development, LLC for the past 14 months. He indicated that the exact vehicle of conveyance, lease or sale, will be negotiated during the due diligence period of the proposed Option Agreement.

Director Shuck indicated the project is predicated on a single user taking a majority of the property, for a conditioned light industrial use that would produce between 600 and 800 living wage jobs for the Port District.

Director Shuck indicated the negotiations have been complicated. He further stated what is currently important to this project is the submission for New Market Tax Credits that will help the project’s economic feasibility. He added the application for New Market Tax Credits is due tomorrow in Washington DC and stated the hope was to bring this to the Commission at a regularly scheduled meeting, but unfortunately that could not be accomplished due to a delay in finalizing the option agreement.  

Kathy Holtby, Property Manager, provided the highlights of the terms of the agreement.

Commissioner Baker stated she has always been opposed of sale of property so she hopes this turns into a lease. She added that should this become a sale, the port will have an option to repurchase the property. Ms. Holtby stated that was correct.

Commissioner Wolfe expressed concern that no one from Sutherland Development was present and added all this Agreement does is provide Port staff 60 more days to reach agreement. If it was not for the New Market Tax Credits, the Commissioners should not even consider it. He added that because there is an assertion that the Port will get jobs and because Port staff thinks this is something the Port should do, he will ultimately end up voting for it. If the Port needs cash, it should not have an option to lease. He also asked Director Shuck if he believes the language ensures the Port will have the same end user in August that we have today and Director Shuck stated that was correct.

Deputy Executive Director Coleman stated that Port staff also had concerns that Sutherland will not have put down non-refundable cash for a period of time. Port staff does not want to be tied to a deal if the Port does not have surety or any cash on the table. He indicated that the Port understands Sutherland Development’s need to get in a solid application for the New Market Tax Credits and March 5, 2008 was the application deadline. The Port also included in the negotiations (and in the proposed Option Agreement) that can continue to market the property until non-refundable cash secures the deal.  If the Port finds another user for the property, Sutherland must deposit $100,000 non-refundable within 10 days or the Port has the right to relocate them to Parcel 7.

Commissioner Wolfe asked Port Council Lowe’s thoughts about paragraph 9.1 regarding negotiation of deal points and Deputy Executive Director Coleman asked if he could respond. He stated the reason for this paragraph is that Port staff would like to have a period of time to negotiate deal points with Sutherland Development without accruing additional attorney fees. Once the deal points are determined, legal counsel will prepare the necessary documents. 

Commissioner Wolfe stated it is hard for him to understand what deal points there are to negotiate since this agreement is pretty straight forward.  Deputy Executive Director Coleman stated the Port needs to protect its interests on additional issues such as the Port’s need to develop Parcel 7 which impacts Parcel 8 and Sutherland Development’s need to do its due diligence among some of the deal points.

Deputy Executive Director Coleman stated the Port originally looked at this as a purchase because of the Port’s short term cash flow needs. He added when the Port looks at a long-term lease, it realizes better return on investment over time. He indicated the Port needs to remain open on whether or not the Port retains the property and stated that what is really important is that these jobs and the private investment come to our community. 

Commissioner Baker asked if the staff have thought about traffic impacts if the end user brings 600 – 800 new jobs. Director Shuck stated the Port has contemplated this and the traffic generated by this end user was represented in the permits obtained for Parcel 8.

Commissioner Baker asked Director of Environmental Services Boyden what her comfort level is regarding the project. She stated that when the Port looked at this property, it did the appropriate due diligence. She added she would anticipate Sutherland will do the same.  She indicated whatever business might be located there, it needs to meet the appropriate environmental standards as well as be considerate of Port neighbors.

Commissioner Oliver indicated he has read through the Agreement several times and believes he understands it. He added that he, too, has reservations. He stated this seems to be a straight forward deal and there are not a lot of unknowns. He indicated he is troubled that the developer has not expended any out-of-pocket money. He is also troubled that there is no representative here from the development company. He added there are certain timelines that require performance by the developer and if performance is not met, the option will terminate. He also stated the Port is currently working on filling the property to make it shovel ready and this will not be completed for several months anyway.

Deputy Executive Director Coleman indicated there is one other consideration that the Port put into the Agreement and that is that Sutherland Development must report back its due diligence every 60 days. He stated at least the Port will know that Sutherland Development will be investing in the property.

Executive Director Paulson stated Port staff has considered this transaction for the past 14 months. He indicated questions have been raised and staff has had their feet put to the fire as to why staff recommends this option. Based on the information staff has, the Port hopes, in the long run, it has a commitment from a significant manufacturer to provide family wage jobs with benefits here in our community. This is the goal the Port has worked for. He also added that there are compromises and things that the Port would like to see differently. But this is what is on the table right now and necessary to help obtain the New Market Tax Credits. If the New Market Tax Credits were not in issue, Port staff would have waited to work out more details before submitting this Agreement to the Commission.  

Commissioner Wolfe stated he hopes that Executive Director Paulson conveys to Mr. Bennion that the three Commissioners are reluctant and Sutherland Development must not miss any time lines. Executive Director Paulson stated he thinks everyone has the desire to make sure this tracks well with what the Port agreed to time wise and financially.

Commissioner Baker stated that at the very beginning, she had reservations about the end user, however, she has since been well educated and is excited about the jobs it will bring and its impact on our community. She added this is one of the reasons she is willing to make concessions.

On motion by Commissioner Oliver, seconded by Commissioner Wolfe, and unanimously carried, the Port of Vancouver USA Board of Commissioners approves the Option Agreement between the Port of Vancouver and Sutherland Development, LLC for Parcel 8.

ADJOURNMENT

There being no further business to come before the Port of Vancouver USA Board of Commissioners, the March 4, 2008, special meeting was adjourned at 9:18 a.m. by
Commission Vice President Baker.