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MembersLetter
Monthly Features Issues Watch Knowing the Waters Our tenants
are seeking rent relief as a result of the economic recession. Is there a general set of procedures
for port tenant rent relief programs? Ports in Washington
have developed various business niches and unique tenant needs, therefore it
is difficult to lay out port tenant relief program guidelines that would
apply to every port. However, the
constitutional prohibitions against gifts of public funds and the lending of
public credit must be considered in any rent relief program. Article
VIII, Section 7 of the Washington Constitution, specifically prohibits
municipal corporations from giving any money or property, or loaning its
money or credit to aid any individual corporation. A test to determine whether a
financial action is a gift is the “donative intent” test. If a port does not have
“donative intent,” then the port is not giving a gift of public
funds. In other words, there must
be some business rational for the action taken. If a port
must take some rent relief action, it must incorporate some business rationale
for the relief. This could
include extending the term of the lease to recapture the reduced rent later,
or reducing the size of the rented portion of the property to remove some of
the financial strain on the tenant, rationalizing the reduction or relief as
a way to maintain business or recognizing a reduced value in light of
economic events. Further, you
may wish to consider incentives or credits outside of your formal lease
agreements for a limited period of time.
This would have the effect of not disturbing the long term attributes
of your lease provisions such as CPI adjustments. Also be aware that leasehold excise
tax is levied upon the “fair market value” of the property
regardless of your rent relief program. As always,
contact your counsel with any questions regarding this issue. Port News "Power
Up! Electrifying Transportation Summit" is being held on
May 27-28 at the Wenatchee Convention Center. The summit highlights progress
with plug-in hybrid electric vehicle (PHEV) technology. Sessions
will focus on Vehicle to Grid capabilities, Charging Stations and Utility
Needs, Battery Technology, Renewable Energy, Business and Training
Opportunities, and PHEV Pilot Projects. This event is brought to you by the
Port of Chelan County, Advanced Vehicle Innovations, and Washington Dept. of
Community, Trade and Economic Development. For more information and registration, go to www.PluginCenter.com. Hawaii
Bound Automobiles Ship Through Port of Grays Harbor Pasha Hawaii Transport
Lines’ MV Jean Anne is loading over 1,100 cars outbound at the
Port of Grays Harbor. “Equipped with
direct rail, excellent highway access and a deep-water navigation channel,
the Port of Grays Harbor has the key characteristics that make auto shipments
successful,” states Mike Pasha, General Manager of Port Development for
The Pasha Group. “In addition to this valuable infrastructure, the
people have made this a truly successful operation. The skilled longshore
workers have expertly handled the autos without damage while the flexible and
responsive port staff has ensured a smooth flow of cargo from receiving
through loading.” The Pasha Group and the
Port of Grays Harbor entered into a joint marketing agreement last month.
Grays Harbor handled its first inbound shipment of 3,100 autos in mid
January. This shipment will be the first outbound shipment of autos through
Grays Harbor. “This shipment is
completely separate from our successful auto shipment last month,”
reports Leonard Barnes, Deputy Director. “The Port of Grays Harbor is
excited to demonstrate to our partner, The Pasha Group, that we are flexible
and more than capable of handling every shipping opportunity they bring to
us.” Port of Vancouver Announces
Two Wind Energy Agreements Port of Vancouver Executive Director Larry Paulson announced a
three-year extension to an existing contract with Vestas Wind Systems, which
includes options for extending the contract. He also announced an agreement
in principal on a new two-year contract with Siemens Energy. The work that comes with these agreements is expected to provide
235 jobs and $20 million in economic value to the community. Port of Vancouver crews have been handling Vestas cargo since
2000. The port has been operating under an exclusive agreement with Vestas,
the global leader in wind energy components since 2006. “These agreements are critically important to the
port,” Paulson said. “They provide jobs and revenue for our
community, and we’re very proud to announce these agreements. In Memoriam Port of
Silverdale Commissioner Harry Knapp passed away in early December. He was
first elected to the Port Commission in 1975. During
his 33 years as a Silverdale Port Commissioner, Harry applied his lifetime of
experience in construction to oversee real accomplishments for the port:
including a public dock, all season boat launch, transient moorage with
security, power, water, and pump-out facilities. He supervised construction
of significant improvements to the port facilities, including expansion of
boat launch parking, dredging for boat launching at all tides, a new public
restroom at the launch ramp, and new restrooms at the Silverdale Waterfront
Park with showers and a laundry facility for boaters. He will be greatly missed. |
LTCA is Vital to Our
State’s Economic and Environmental Health In 1988, the
citizens of Washington State voted to set aside money in a special fund to
pay for tough toxic clean-ups.
Since then, hundreds of contaminated sites around the state have been
cleaned. And hundreds more
remain. But the Governor’s budget proposes to deplete the entire $75
million in the account and transfer the monies into the general fund. Twenty years
ago voters passed I-97 which created a dedicated fund called the Model Toxic
Control Account to help local governments pay for expensive clean-up efforts
of contaminated sites around the state.
The passage was a rare instance in which voters statewide
overwhelmingly supported taxing themselves, and the only time voters passed a
levy that included a funding source. Washington citizens firmly stand behind
keeping our state green. The program
has been tremendously successful in cleaning up toxic sites and returning the
land to use. Today the program is in serious jeopardy. Gov. Gregoire has
proposed emptying the clean-up account into the state’s general fund.
It is an ill-conceived proposal that threatens thousands of environmental
projects. Most
clean-ups occur in under-utilized or abandoned industrial areas that, once
cleaned, allow ports and local governments to return these areas to local
economic development and job creation opportunities. Over the past 20 years ports
throughout the state have cleaned up industrial and commercial upland,
shoreline and aquatic property. Bellingham The
Port of Bellingham is completing a comprehensive cleanup of six state-listed
sites within the 220-acre Waterfront District redevelopment area surrounded
by Bellingham Bay. The state-required actions will remove contamination and
restore the land and aquatic habitat. The
cost of restoration activities of the Waterfront District redevelopment sites
total $94 million. The investment of MTCA funds of $47 million will be matched by the Port of Bellingham. The
work will create miles of public access to the waterfront, complete dredging
of the Whatcom Waterway to improve marine access, restore and create a new
basin for a Clean Ocean Marina and clean 200 areas of uplands to accommodate
a vibrant mixed-use waterfront with up to six million square feet of new
development and green community space. Olympia A MTCA remedial action grant was recently awarded to the
port to help clean up Budd Inlet, restore parts of shipping berths and
evaluate future clean-up alternatives for the port’s remaining
navigational areas. The port began working on the project in 2000 and again
in 2005. It has now committed over one million dollars through initial
monitoring after construction. Ridgefield The account is being used to clean up the Lake River industrial site
where a wood treatment plant went bankrupt after 30 years in operation,
leaving the site contaminated by creosote and other chemicals. The
cleanup, started in 1995, is entering its final stages which include
redevelopment of the site into a vibrant mixed use waterfront area that will
include moorage, office space, retail and green spaces. When completed, the
site will create jobs, increase the local tax base and stabilize the local
economy. Funding to complete the project is more critical now than ever before. Vancouver The
Fruit Valley groundwater cleanup has been a beneficiary of this account, and
because of that, we can see a massive source of clean drinking water for our
community in the near future. The funding has given the port the opportunity
to return 55 acres of previously contaminated land to safe and productive
use. Citizen Support Washington
state citizens consistently support the environmental clean-up projects
throughout our state to restore our land and water. Many cash-strapped
communities rely on this funding to help pay for these expensive clean-ups.
Many unemployed citizens are relying on the Governor’s own stated goal
of increasing green collar jobs to 25,000 to get them back to work. Robbing
our state of the money for environmental clean-ups would mean robbing our
citizens of resulting jobs at a time when unemployment rates are soaring. To take this
money away not only ignores the will of the voters, but also means that
hundreds of projects in the pipeline would be delayed. Delays only further threaten our environment, and cost
taxpayers even more money in the long term. The raid on
this environmental clean-up account is catastrophic and we urge the
Legislature to fully fund the account and to use it for its intended purpose
of funding local toxic cleanup projects.
To do so will continue the legacy of job creation, long-term economic
development and environmental stewardship that stand as a hallmark of this
vitally important account. BARS Manual and Reporting Package Updates
Available Online The
Budgeting, Accounting and Reporting System (BARS) Manuals and Reporting
Packages have been updated for the 2008 fiscal year. For your convenience,
the updated information is available at: www.sao.wa.gov/LocalGovernment State law (RCW 43.09.230) requires all local
governments in Washington to file their annual report with the State
Auditor’s Office within 150 days after the close of the fiscal year.
Please refer to your specific manual or reporting package for a detailed list
of requirements. There were some major
changes to the reporting requirements last year that may affect your government. For
further information, please contact Alexandra Johnson at (360) 725-5596. Important Filing Reminder Contact the PDC staff for assistance with filing: pdc@pdc.wa.gov,
(360) 664-2737, or toll-free 1-877-602-2828. EPA Announces Grant Opportunities A list of available grants and more information can be found at www.epa.gov |
February
2009 Upcoming
Events January 12 –
April 26 March 6 March 25 Ports Offer Rent Relief
to Struggling Tenants While our
ports struggle with cargo downturns and decreased bond ratings, their tenants
struggle with economic hardships of their own. Ports are seeing a reduction
of employment by their tenants, slower lease payments, and a slight increase
in vacancy of spaces that are taking longer to lease. Recognizing that
keeping existing tenants and the jobs they offer is beneficial to a port and
its community, many ports opt to work with their tenants and provide some
form of rent relief. Port Angeles Port of Port
Angeles Finance Director and WPPA Finance and Administration Committee Chair
Bill James said, “We have had several
tenants paying reduced, or no rent in some cases, for awhile. These
reduced or no rent situations are always approved by the commission.
Their general criteria, not formalized, include job creation and/or community
service such as visitors/convention bureaus, lobbying groups for logging,
etc.” He cautions that the
Department of Revenue has billed the port for the Leasehold Excise Tax on the
implied fair market value on such agreements and ports should consider this
in negotiations. However,
the Port of Vancouver has effectively
argued that the "contract rent was the maximum attainable by the
lessor" per RCW 82.29A.020. The DOR agreed and additional leasehold
excise tax was not assessed. Kennewick Director of
Finance-Auditor, Tammy Fine says the Port of Kennewick has given rent
abatements in the past as well. “We give out rent abatements for (1)
start up/expanding businesses –justified by job creation and the
economic benefit to the Port/economy and (2) to hardship businesses,”
she said. They document the request, defer to commission approval and have
the tenant pay the leasehold tax on the FMV of the rent. Skagit Director of Finance Kristin Garcia noted that the Port of Skagit
County also recently implemented a “struggling tenant” policy
that allows tenants to apply for a renegotiated lease. Tenants must demonstrate that they are experiencing a financial
hardship and provide a recovery plan which clearly documents the benefit the
program will give them since the port’s purpose in providing it is to
retain jobs. Once staff has determined the tenant qualifies, the
commission approves the new lease. The Port of Bellingham is currently drafting a general set of
procedures for dealing with tenants asking for rent relief during this
recession. And with these hard economic times forecasted to continue through
2009, more ports may be faced with the same dilemma. Container Ports and Land Use Work Group Releases
Report In 2006, Governor Gregoire announced a Container Ports Initiative to improve coordination and investment in rail and container port freight mobility. As a result, the Container Ports and Land Use Work Group was formed to study current land use regulations and their impacts on the effective functioning of container ports, and to make recommendations for improvements on better accommodating urban and industrial growth. Representatives
from WPPA, the Ports of Seattle and Tacoma as well as other local governments
and state agencies served on the Work Group. The
Work Group recently completed their report to the Governor in which they note
that Comprehensive Plan Updates under the Growth Management Act provide the
best time for the city and port to work collaboratively in developing an
effective policy framework. The Work Group also recommends the state provide
matching funds to assist in meeting this new requirement. To
address the movement of freight to and from these ports, the Work Group
recommends better identification of key freight corridors in local city and
port plans, stronger recognition of these corridors in state transportation
plans, and priority consideration for project funding. The Work Group has
also endorsed the top priority freight mobility projects in Seattle and
Tacoma, and recommends priority consideration of early state funding for
these two projects. To
implement their recommendations, the Work Group has drafted legislation, HB
1959 and SB
5853, which creates a new planning process within the GMA requiring the
cities and ports of Seattle and Tacoma to account for the long-term
transportation and land use needs of the marine ports. The
complete report is now posted online at http://www.ofm.wa.gov/reports/default.asp#c
and http://www.governor.wa.gov/priorities WPPA Now Accepting Holcomb Scholarship Applications In 1988, the
Washington Public The $1,500
scholarship is available to employees and commissioners of a Washington
public port, their spouse, children or grandchildren who demonstrate a need
and intend to pursue studies in academic areas related to port district
purposes, including international trade, foreign languages, finance, business,
engineering, environmental sciences, and other port related fields. The
Association will accept scholarship applications between now and March 13,
2009. Applications
are available online. Announcement
of the 2009 scholarship recipient will be made during the business meeting at
the WPPA Spring Meeting at the Red Lion in Pasco. |
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