Port of Port Angeles to provide rent relief

Commercial, live-aboard tenants can delay paying if hampered by COVID-19 impacts

PORT ANGELES — Port of Port Angeles commercial and live-aboard tenants burdened by the COVID-19 pandemic can delay paying up to three months of rent under a policy reviewed Tuesday at the regular port commission meeting.

The three commissioners, who also learned the port’s end-of-2019 financial position was strong despite a sharp drop in logging revenue, spoke highly of the policy, suggesting it may need to be extended depending on how long Gov. Jay Inslee stretches out limitations on non-essential business activity to combat the virus.

Port Deputy Executive Director John Nutter, outlining the rent-deferral guidelines, said delayed 2020 rents will be due by Dec. 31 without being subject to late fees or finance charges.

“We want to help tenants, but we don’t want to give away the farm,” Nutter said.

Recreational moorage tenants, who constitute the bulk of renters, are not eligible for deferred payments.

Nutter said the port earns about $3 million annually in lease revenue, much of it earned from government agencies such as Homeland Security and the Department of Transportation that are guaranteed sources.

Most of the 74 other port districts in Washington state that are offering deferred rent to tenants are using the same deferral model, Nutter said.

The port is expecting to remain fairly stable financially while the policy is in place, he said.

“We’re not anticipating a cash-flow issue.”

Health officials expect Inslee’s stay-at-home order to be extended past the May 4 deadline, and a University of Washington study has predicted deaths nationwide will drop sharply by mid-June.

But port Commissioners Connie Beauvais and Colleen McAleer said the rent relief program is an evolving effort.

“It could be we have businesses that declare bankruptcy,” said McAleer, also the executive director of the Clallam County Economic Development Council.

She said rent may need to be deferred for some tenants by more than three months.

“We may have to play it by ear,” McAleer said.

Beauvais said the temporary policy is “a good, general, overall start to the issue.”

Nutter also said he expects the state Department of Revenue to release a policy on deferral of leasehold excise taxes, paid by those who lease publicly owned property.

Executive Director Karen Goschen will approve rent deferrals based on factors such as the lessee’s credit worthiness, the term of the lease, and “the degree to which a business has been partially or fully suspended as a result of a government order limiting commerce,” according to a draft of the policy reviewed Tuesday by the commissioners.

At most, a half-dozen tenants have inquired about a rent relief program, Nutter said in a later interview.

He said 93 commercial and 20 liveaboard tenants — 10 at the Port Angeles Boat Haven and 10 at John Wayne Marina — will be eligible for the program.

Inslee issued a 30-day moratorium March 18 on residential evictions.

Nutter said public comment on three proposals for ownership or management of John Wayne Marina has been extended indefinitely due to Inslee’s order that limits gatherings such as public meetings.

The public comment deadline on the proposals had been March 31.

Revenues

Nutter also reported that 2019 operating revenues were $8.9 million, an amount under budget by $2.1 million, or 19 percent.

According to port staff report, the decrease was due to factors including China substituting West Coast logs with less expensive logs from Europe, the devaluation of Chinese currency, an increase in ocean shipping rates and the U.S.-China trade dispute.

The port ended the year with an operating margin of $950,000 despite a decrease in board-feet volume from 80 million board feet to just over 40 million, Nutter told the commissioners.

“I was kind of hyped about that,” he said.

“We knew we had limited income during the year so we tried to aggressively manage expenses.”

Savings included reduced staffing at the log yard and marine terminal, reduced expenditures for consulting services and less spending for discretionary travel, Nutter said in the interview.

“It was across the board.”

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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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