The Port of Vancouver on Tuesday agreed to sell 18.9 acres to a manufacturer and distributor of specialty gardening supplies that plans to consolidate five separate facilities under one new roof in the Centennial Industrial Park.
But the discussion before the Board of Commissioners voted unanimously on the deal with Sunlight Supply included questions about the port’s willingness to sell the property even when, the port’s top official conceded, the port would do better financially by leasing the property.
Ron Morrison, a Vancouver resident and critic of the port, said the port’s decision to sell to the company reflects another “worrisome” move to achieve a short-term gain of income while losing the long-term revenue that would come with a lease.
Historically, the port has leased — and rarely sold — parcels to companies. In this case, the port said it’s negotiated a minimum sale price of $4.6 million.
Commissioner Brian Wolfe said the port has long marketed lots at the Centennial Industrial Park for sale or lease. “At the same time,” he said to port CEO Todd Coleman, “we recognize we get a better return on our investment if we lease. What’s the justification for selling rather than leasing?”
Coleman replied that the deal retains Sunlight’s 253 jobs and could lead to more job growth. That’s important to an area that still has relatively high unemployment, Coleman said.
Craig Hargreaves, founder of Sunlight Supply, told commissioners that if they refused to sell, it “would require our company to move our port facilities and jobs to Portland, as there is no existing industrial space of the size we need in Southwest Washington.”
As to potential future job growth, Hargreaves said if the company continues to grow, then “staff members will be added to facilitate that growth. It’s a tough crystal ball, as you know.”
Under the deal, Sunlight would use 18.9 acres of the port’s larger Centennial property to develop 285,710 square feet of space for a new corporate headquarters, manufacturing center and distribution facility.
Sunlight would consolidate five separate existing locations into one at the Centennial site. The new facility would harbor all of the company’s current 253 employees in Southwest Washington. Sunlight would invest more than $23 million in the complex, according to the port.
Hargreaves told commissioners the company wants to build the new structure in nine months.
The deal needs other steps to occur before it’s finalized, including real estate appraisals to pinpoint a final sale price. If appraisals don’t support the floor price of $4.6 million, “the port doesn’t have to sell the property,” said Kathy Holtby, the port’s real estate manager.
Yet critics questioned the port’s move to sell, rather than lease, another parcel.
The port is borrowing $17.5 million to balance its 2015 budget, Morrison said, and that’s after “using a substantial amount of income from (the) sale of property.” He added, “It would be to your long-term benefit to lease property, and that certainly would be preferred with a public port.”
Responding to Morrison, Coleman said the port once projected it would have to borrow $88 million to finish its West Vancouver freight-rail project. At this point, the port estimates needing to borrow $17 million to $20 million, he said. “I’d much rather borrow” that lower amount than the $88 million, Coleman said.
Coleman acknowledged that a leasing scenario would be better because the port could borrow against the lease income over a longer period of time. However, Coleman said, the Sunlight matter “is not about (a) financial decision, it’s about retaining those jobs in the community.”
Sunlight has been a tenant of the port since July 2010, leasing 90,000 square feet of warehouse space as its national distribution center. Helping drive the company’s search for a new location is the decision by Great Western Malting, another port tenant, to exercise its rights to a portion of Sunlight’s existing space.
