Port of Port Townsend commissioners to meet again on leasing policy

PORT TOWNSEND — Port of Port Townsend commissioners expressed frustration at the lack of progress in developing a leasing policy during a public workshop session Wednesday morning.

Commissioners called on staff to gather samples of other ports’ leases as a template for review and set another public hearing to request public comments on the draft leasing policy. It is scheduled for 5:30 p.m. July 25 at the port commission building, 333 Benedict St.

This was the third draft of the port’s policies and practices guidelines and was made available to commissioners Tuesday evening for review. Other drafts were presented and discussed at June 13 and June 27 public workshops.

“It’s the commission’s job to create strategic direction,” Commissioner Bill Putney said. “The staff’s job is to give us a helping hand. I don’t feel that I need to sign off on something that I don’t think is as good as it could be.”

Commissioner Pete Hanke was aggravated with the lack of progress and the lack of a clear direction.

“What’s confusing is that we are working on one policy. This is the third meeting we’ve had on this one policy. We have a whole boatload of stuff to get through,” he said.

”If we can’t come up with a way to expedite this process then we aren’t going to get through this. I would encourage staff to really figure out how to streamline this process.

“In the business policy,” he continued, “you talk about how we are going to follow our business plan. We don’t have a business plan.

“If we keep doing this with comments in the margin, do you know how much time it will take to come up with a business plan?

“I would encourage us to discuss how we are going to streamline these policies. It still doesn’t work. I’d like it on a more timely basis, not the night before.”

Putney said the policies are the basis for the relationships the port has with its tenants.

“A lot of our anxiety and struggles we have communicating with tenants is based on the fact that they don’t know what the heck we’re thinking about or doing from day-to-day,” he said.

”If we have good policies, whether they like them or not, and they are not ambiguous or to the point, then that’s a basis for going forward.”

Commissioner Steve Tucker referred to the Washington Public Ports Association (WPPA) membership dues and said it is a way to get the collective wisdom of all the ports. He directed staff to obtain sample leasing policies from them for review and discussion.

“Most of this stuff is normal stuff that we haven’t been keeping up with because we’re isolated out here,” Tucker said.

”We need to normalize our leases to modern 21st century standards. We’ve got an attorney that represents a lot of ports and this is a bread-and-butter issue. This would be a good person to go through the WPPA guidelines and say this works, this doesn’t.”

Tucker requested that port attorney Frank Chmelik of Chmelik, Sitkin and Davis be asked for input.

Executive Director Sam Gibboney suggested that leases should be tied to the consumer price index (CPI) plus 1, then re-examined in five years, which prompted debate among the commissioners about a competitive market rate.

Greg Englin, director of Operations and Business Development, said that there is no “normal” for rent adjustments.

“Lots of ports are grappling with this right now,” he said. “CPI isn’t always enough.”

Hanke referenced three current leases, pointing out that all were on very different programs.

“We were looking at doing improvements to the Armory building (but) we weren’t good stewards of the triple bottom line issues and we lost a huge heritage marker,” he said.

”Yet we are talking about spending a gob of money for Washington Department of Fish and Wildlife (WDFW) because they are threatening to leave because they don’t like the creosote smell on their clothes.

“It boils down to who is sitting in chair making the leases. They are all going to be different.”

Hanke said he gets confused when the discussion becomes the financial recovery of assets.

“You aren’t going to rent something out here that will recover the assets for the breakwater, the docks, the stormwater, or paving the yard,” he said.

“None of those improvements or rehabilitation are going to be incorporated in the market rate. We need to be careful how we use these words. If someone says I’m going to make sure all those cost recovery items are wrapped up in the leases, my guess is that you are going to be quite a bit higher than market rates.”

Gibbny pointed out that, in spite of a lack of policy, “our yard occupancy is at a five-year high.”

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Jefferson County Editor/Reporter Jeannie McMacken can be reached at 360-385-3225 or at [email protected]

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