Port signs agreement to map out PDA takeover


The Port of Grays Harbor and the Grays Harbor Public Development Authority have entered into an agreement that paves the way for a Port takeover of operations at the Satsop Business Park, possibly as early as Oct. 31.

An interlocal agreement was approved unanimously by Port commissioners on Tuesday after a joint meeting with the development authority board and staff, which has operated the business and development park since it was founded in 1999 at the former site of the abandoned nuclear plants once planned by the Washington Public Power Supply System.

The agreement, which will now be placed before the PDA at its next regular meeting at Satsop on Tuesday, provides a framework so the two organizations can map out a permanent Port takeover. It provides “for an orderly system of information sharing and a cooperative process for decision making” and gives the Port “direct input on decisions that may create a legal obligation or responsibility on the part of the PDA.”

It also gives the Port assurances that it will be provided written notice and the opportunity to participate in any proposed action by the PDA board or its administrative officers that might create a legal obligation in the future.

“It’s really an opportunity to bring two extremely strong, competent organizations into the form of one, and (be) a premier economic development organization for the state,” said Port Executive Director Gary Nelson. “We have an opportunity to not only serve our community in providing jobs, but to also be a model for the state in how rural economic development can work and serve the citizens.”

TIMELINE

The agreement would help guide a transition in which the PDA would transfer its assets and operations to the Port, a process that Port and PDA attorney Art Blauvelt said might be completed by the end of next month or before the end of November at the latest. The goal, he said, was for the Port to assume operations at Satsop by Jan. 1.

PDA board member Tom Casey, the PUD commissioner, had pushed for the joint meeting and wondered if there was a way the Port could take over operations if the PDA board was left intact. He suggested the meeting was long overdue since the Port’s takeover of the PDA already has been given initial approval by Grays Harbor County Commissioners as well as the Port commission.

“It should have happened a year ago, but better late than never,” Casey said.

Port Commissioner Stan Pinnick noted the process really began over a year ago when the Port and PDA started to consider the possibility of a merger.

“This is not something that came up at the last minute,” Pinnick said.

Port officials outlined their vision in taking over the site, which would be to continue the PDA’s master plan and to better market the facility with the addition of Port resources. The idea would be to create a separate Port management division to handle the Satsop operation, similar to how the Port operates the Westport Marina.

“My own personal opinion is that we have adequate staff to handle anything that happens up there.” said Port Commissioner President Chuck Caldwell.

The PDA currently has an operating budget of $2.38 million, with assets valued at $65 million, before depreciation, and total debt of just $805,940, according to figures presented by Tami Garrow, Satsop’s CEO. She announced her retirement in advance of the decision to have the Port assume operations at the site. In addition, Satsop has cash and investments totalling a little more than $6 million as of June 30.

“We’re in a very, very strong financial position,” Garrow said.

The business park includes more than 1,700 acres of land and buildings, with 440 developed acres and more than 1 million square feet of building space. In addition, the PDA owns and operates a municipal water system, wastewater treatment plant, an industrial water supply system, stormwater retention system, a fire protection system, telecommunications system and the electrical infrastructure at the site.

SATSOP ASSETS

Garrow, who has been CEO at the park for the past 12 years and was the second person hired there, noted that when the PDA was formed, its purpose was to “improve the regional economy by creating jobs and tax base.”

“That’s really been our guiding light for the entire time that the park has existed,” she said.

Since taking over the facility and transitioning it from the unfinished nuclear energy plants there, Garrow said, about $35 million has gone into the business park in the form of improvements, such as roads, water, sewer and telecommunications, along with new buildings.

“The majority of that has been from grants and low-interest loans,” she said.

While Satsop is run by a public agency, Garrow pointed out the PDA is not a municipality and does not receive any local, state or federal tax money, and has no authority to issue bonds. Such restrictions “frankly impact our ability to build and grow,” Garrow said.

Currently, Garrow has a staff of 12 people to run the park, with about 40 businesses located there employing an estimated 400 people. The master plan for Satsop envisions a 30-year build-out of the park that eventually could produce 2,000 more potential jobs “should we be so fortunate,” Garrow added.

“We have a mix of business interests at the park,” she said. “We take good care of our customers.”

Garrow also said much of how the PDA operates already is modeled after how ports are operated under state law, and Satsop belongs to the Washington Port Association as an associate member to help with professional training and information resources.

“We manage the park in a virtually identical way to the way that a landlord port would manage their properties in the state of Washington,” Garrow said. “… Port districts are economic development engines, and we have mirrored many of our day-in and day-out functions and the rules we follow off of that model.”

PORT’S PLAN

The Port’s Nelson said he believes Satsop would give the Port another line of business to go with its industrial properties business, the operation of Bowerman Airport and the Westport Marina, its pilotage program and its marine terminals.

“It would be the Satsop Business Park division of the Port of Grays Harbor, much as our other facilities are a division of the port,” Nelson said. Satsop, under the Port plan, would retain its identity as a business park “and building upon the success that has already been established there,” Nelson said. “I think we have a lot more alike than we have differences.”

Both organizations, he said, are about providing jobs for the county along with economic development.

“We also think there is an opportunity to build upon the Port’s recent success and exposure that has raised the visibility of Grays Harbor internationally,” Nelson said, saying some of the attention for the Port’s increase in marine shipping could be “diverted some of that attention up on the hill to help attract some businesses.”

The move would disband the seven-member PDA board with the ultimate oversight of the three members of the Port Commission. Port Commissioner Jack Thompson sits on both boards.

Nelson explained that the Port, with 41 employees and about 100 tenants, does have taxing authority as a municipal form of government.

“The consolidation would not have any change or impact on our ability to collect taxes, and it certainly doesn’t increase them because you don’t have any,” he said. “It just expands the asset base for the combined organizations to move forward and leverage those assets for private development.”

Nelson likened the business park to being more like a small city with the extent of the utilities and services it provides. Blauvelt noted that the Port, however, would have to give up the telecommunications part of the operation, likely to a private operator, because the Port cannot offer such service under state law.

“The benefits to the Port are that it provides an immediate presence in East County and would add developed acreage in the portfolio for the county,” Nelson said.

He believes the PDA currently “is a little lean” in terms of management personnel at Satsop and the goal would be to add more people there. Casey said his biggest concern was the elimination of the PDA board and whether the Port could also manage the forest land or the other utilities at Satsop.

“Is it OK to take that tool out of the toolbox and toss it into the brush?” Casey asked about the potential end of the PDA board.

Pinnick replied: “From my point of view, I think we have the tools for a successful merger.”

If you want to know more about the plans for the Port to take over the Satsop Business Park you have opportunities next week.

There will be two public workshops on the plan next week: at 5:30 p.m. Tuesday at the PDA offices at Satsop; and at 5:30 p.m. Wednesday at the offices of the Port.

The PDA also will discuss and possibly vote on the interlocal agreement at its Tuesday board meeting.