Company in lease negotiations with Port of Port Angeles

Unnamed entity could create 15-20 living-wage jobs

PORT ANGELES — A company that has requested its name not yet be publicly divulged is reviewing a lease proposal from the Port of Port Angeles for 15,000 square feet of manufacturing space.

The contract could include periods of discounted, deferred and free rent, and in the long term generate 15-20 new jobs, according to a port staff report on the lease presented at a Jan. 14 commissioners meeting.

The business is a maritime company based in Clallam County, and its owner is a Clallam County resident, port Commissioner Colleen McAleer said Monday.

It would expand “to increase capacity and introduce a new product,” the report said.

Port officials said in the report that the company would create 15-20 living-wage jobs “over the next several years.”

Board President Steven Burke said Monday the company is not an existing port tenant.

But commissioners and port staff are not identifying the business at the owner’s request.

“They just asked us, until we sign a contract, to keep it confidential,” Burke said.

The company is trying to be cautious, McAleer said.

Burke, McAleer and Commissioner Connie Beauvais reviewed the proposed lease terms in a 20-minute executive session at the Jan. 14 meeting.

The company’s identity and the lease terms will be made public if the contract comes up for approval by commissioners.

That could occur at the Jan. 28 meeting, Deputy Executive Director John Nutter said Monday.

The proposed contract would be included in the meeting agenda packet, available online before the meeting at the port’s website at www.portofpa.com.

At their executive session, port commissioners considered the proposed lease for 15,000 square feet of space in suites C, D and E of the multitenant industrial building at 2007 S. Oak St.

The building was occupied by Airborne Environmental Control Systems, an aerospace technology company purchased in May 2019 by RAM Manufacturing Company out of St. George, Utah.

After about 20 minutes, commissioners directed staff to submit the proposal to the company, Nutter said.

“We provided [company officials] with a potential lease document and their legal team is reviewing it right now,” he said.

“The ball is in their court.”

Burke said most leases for port property include temporary special terms and breaks for new tenants.

The fair market value of the site is $10,350 per month, according to the report prepared by Nutter, Executive Director Karen Goschen, Real Estate Administrator Susan Scott and port lawyer Brian Wendt.

Commissioners cannot discuss a lease rate in executive session unless factors that affect the price are first discussed in an open meeting, they said in the report.

Those factors were not discussed at the meeting but are included in the report.

“The prospective tenant is amenable to the port’s current lease template,” the report said.

But the prospective tenant also is making four requests.

According to the report, the company wants limited free rent during move-in and setup, discounted rent while ramping up production, deferred rent during the early part of the lease that would be paid off during contract’s latter period, and “credit against deferred rent for new job creation.”

The report does not quantify the terms in dollars and cents that would be applied to the fair market value.

Burke said many port tenants initially get some kind of break on their lease.

“Our main mission is to create economic development, not to get the highest rent possible,” he said.

“We don’t necessarily have all four [requests], but all four are always in play, it seems like.

“Generally, it all comes down to cash flow, trying to make sure they have enough cash flow.

“Cash flow at the beginning is going to be different than two years from now.”

McAleer said commissioners discussed “the lowest lease rate we would accept,” the company’s proposed terms and risk factors.

The company’s and owner’s credit is satisfactory, as are financial statements and the business plan, the report said.

Potential tenant improvements include a gantry crane, the size of which was not specified.

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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at [email protected].

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