The Port of Vancouver Board of Commissioners on Tuesday unanimously approved a deal to bring up to 95 acres under port ownership, opening a path to extend rails and roads westward in a long-term effort to make hundreds of additional acres available to employers and cargo shippers.
Under the agreement approved by commissioners, the port will spend as much as $17 million to acquire four parcels totaling 95 acres from Moorage 5 Properties Inc. and Hickey Family Co.
The purchase and sales agreement is complicated, involving about 20 acres of wetlands and leases held by two companies. Certain conditions must be met before the deal goes through. And the final acreage the port obtains and how much it pays could change.
But port officials said Tuesday they have plenty of options to finance the property’s purchase. And the agreement, they said, is a major step toward solidifying the port’s long-term economic development plans.
The 95-acre parcel is critical to bringing “future business and jobs into this community,” said Curtis Shuck, director of economic development and facilities for the port.
That’s because the heavy-industrial property is sandwiched between two other port-owned tracts: Terminal 5 and Columbia Gateway. If the port secures the parcel, it would connect Terminal 5 — where the port maintains major rail facilities and where it wants to land part of an oil-handling operation and a potash export facility — to the 534-acre Gateway property.
As a result, the port would be able to carry out longtime plans to extend its industrial and marine facilities westward. The port anticipates the purchase agreement will wrap up by Feb. 28, 2014.
The port’s approval of the purchase and sales agreement follows a letter of intent it inked in April with Moorage 5 Properties and Hickey Family Co., which the port describes as “two business entities of the Hickey Family.”
In presenting port administrators’ recommendation to commissioners to OK the agreement, Shuck said getting to this point has been “a journey of many, many years” involving the building of relationships between the port, Hickey Family and current tenants of Moorage 5 Properties and of Hickey Family Co.
About 26 acres of the 95-acre plot are under lease to Tidewater Barge Lines and HME Construction. Another 20 acres are wetlands.
As part of the HME lease, that company has first right of refusal to purchase its 7-acre lease premises from Hickey Family, according to the port. And HME plans to exercise that right. As a result, the port would end up acquiring up to 88 acres and would deduct the estimated value of HME’s property — about $2.1 million — from the final purchase price.
That would position the port to secure the property for a total of roughly $14.9 million, Kathy Holtby, the port’s real estate manager, told commissioners.
However, if the HME transaction “fails to close for any reason, the port will proceed with purchasing the full 95 acres and both the HME and Tidewater leases will be assigned to the port at closing,” according to the port.
Meanwhile, the port will conduct an environmental study, including a wetlands assessment, to examine how suitable the property is for the port’s intended use.
The final acreage and price won’t be known until after the port moves through its due diligence phase, which it anticipates will be completed by Feb. 14.
The cost of acquiring the parcel is included in the port’s 2014 budget. The port’s executive director, Todd Coleman, said the port has many options to finance the acquisition of the parcel, including using cash on hand, tapping its line of credit or issuing a revenue bond.
“It may be a combination” of any of those options, Coleman said.
The 95 acres surround the port’s 40-acre Terminal 5 West. If the deal goes through, the port would combine that parcel with Terminal 5 West for as much as 135 acres.
The purchase would enable the port to extend its reach into the Gateway property, where roughly 490 acres are open for future economic development.