Port of Bellingham Commission

Action Taken at April 5, 2016 Meeting

Shall the commission:
59. Authorize the executive director to award the only bid of $34,067 to VidTroniX of Shawnee, KS, for the annual paper supply used at the Bellingham airport? Airlines at the Bellingham airport use a shared computer system for baggage tags and boarding passes. The purchase was advertised and one bid was received. (5769/Consent Agenda B) Approved 3-0

60. Authorize the executive director to sign a $58,000 contract (amendment #3) with Puget Sound Executive Services of Sequim to extend security at the Bellingham airport on a month-to-month basis through 6/30/2016? The contract was originally approved at the 7/7/2005 meeting, vote #74. The company provides law enforcement officers at airport screening checkpoints. The federal government reimburses the port for approximately 45 percent of the total cost with the remaining balance reimbursed by the airlines. This amendment brings the total contract to $633,815. (5770/Consent Agenda C) Approved 3-0

61. Authorize the executive director to sign a $10,843 contract (amendment #6) with Moffatt & Nichol of Long Beach, CA, for permitting support of the second phase of the pier condition survey and shipping terminal pier repair project? During a high wind event on 12/9/2014, the Bellingham Shipping Terminal sustained damage along with Berth #2 when the port’s tenant’s vessel Horizon Fairbanks broke free from the pier. Damaged areas include mooring system (cleats and bollards), fender system and pier structure. This amendment brings the total authorized contract amount to $374,146. (5771/Consent Agenda D) Approved 3-0

62. Approve a modification of the harbor land lease with W. Bryan Chesledon and Mary Lou Chesledon for property located at Squalicum Harbor? The property is on the corner of Roeder Avenue and Coho Way, and is referred to as the marina or LFS Building. This lease modification adjusts the rents and updates the insurance provision to the port’s current standard. The 40-year lease ends on 12/31/2041. Rent for the first five-year period will be $203,294. (5772/Consent Agenda E) Approved 3-0

63. Authorize the executive director to sign a $127,723 contract with PND Engineers of Seattle to provide 30 percent design level drawings and apply for all permits for the Bellingham Shipping Terminal marine rail span repurposing project? This contract is for the initial phase of consultant support for rehabilitating and repurposing the marine rail span at the shipping terminal as a roll-on/roll-off barge-loading facility for oil refinery modules. The existing structure was built in the 1960s and was used for loading rail cars onto barges. The project includes demolishing existing steel towers, offshore mooring bollards, and portions of the chemical pier; replacing failing timber piles; rehabilitating the steel transfer span; reinforcing structural elements; and installing a new deck, loading ramp, and mooring dolphins. A contingency fee of $15,277 brings the total contract to $143,000. (5766/Action Item 1) Approved 3-0

64. Authorize the executive director to sign all settlement documents to conclude the legal actions arising from the boathouse fire of 3/30/2012? The fire claimed two lives, destroyed the boathouse and twelve yachts. As a result of the fire, there were eventually 14 different lawsuits involving over a dozen parties and about a dozen insurance carriers. On 3/4/2016, Executive Director Rob Fix and port counsel Frank Chmelik participated in an all-day mediation with all parties and all insurance carriers. Late in the evening, a settlement was reached providing the estates of the two deceased people with $7.3 million. The port’s insurance carriers, the general contractor’s insurance carrier, and the subcontractor’s insurance carrier will contribute $2 million each; the boathouse owners’ insurance carriers will contribute $1.3 million collectively. Earlier in these lawsuits there was a settlement of all port property damage claims and the port was fully reimbursed. The fire has likely been factored into the port’s current insurance premiums. (5767/Action Item 2) Approved 3-0

65. Approve a harbor land lease and project development agreement with All American Marine for relocation on Hilton Avenue and a new building? At the 6/16/2015 meeting, vote #82, the port commission approved a memorandum of understanding with All American Marine to prepare a site and construct a 39,000 square foot manufacturing building in Fairhaven. Last October, the state Department of Ecology informed the port that ecology would not be funding its portion of remediation costs. Port staff and All American Marine evaluated alternate sites and agreed to move the project to Hilton Avenue. At the 11/17/2015 meeting, voter #152, the commission approved a restated memorandum of understanding. This lease and development agreement includes the following points: project budget of $10.37 million, including Economic Development Investment Board (EDI) funding but not financing costs; port’s construction of a 40,000 square foot manufacturing building and two ancillary buildings; a 25-year lease term with one 20-year renewal option and a lease commences the month following substantial completion of the building, scheduled to be completed about 12/31/2016. Rent is based on an average of 3 percent return over the term of the lease on the cost of the project less a $1 million EDI grant, plus financing costs at 1 percent on a $2 million loan and 3 percent on the balance using a 20-year amortization schedule. The port is responsible for site preparation, environmental costs and realigning the Squalicum boat ramp. The port will receive a 3 percent return on its investment over a 25 year lease term. If the project is terminated, All American Marine will pay the port one-half of project costs, less costs associated with the original Fairhaven design. (5768/Action Item 3) Approved 3-0

Action Taken at April 19, 2016 Meeting

Shall the commission:
66. Authorize the sale of one vessel for the nonpayment of moorage fees? An auction will be held for a 79-foot wood purse seiner with unpaid moorage fees of $4,577 (as of 3/31/2016). After a commission discussion, the owner will be given an additional thirty days to make payment. (5786/Consent Agenda A) Approved 3-0

67. Approve a lease modification with Gaston Bay Development for property located at Squalicum Harbor? At the 3/7/2006 meeting, vote #37, the commission terminated a lease with Sonny Foods and entered into a 35-year harbor land lease with Gaston Bay. The lease requires renegotiation every five years. The nominal rent for the next five-years is $105,699. (5787/Consent Agenda B) Approved 3-0

68. Approve a lease modification with Searay Sports Yachts d/b/a Lake Union Sea Ray for property located at 2121 Roeder Avenue? The property at Squalicum Harbor includes upland and in-water area. In 2011 the port entered into a new lease with Lake Union Sea Ray. The ten-year lease included three five-year renewal options. This modification of lease includes rent adjustment for the period from 4/1/2016 through 3/31/2021. Rent for the 2016/2017 period is $50,329, not including state leasehold tax. (5788/Consent Agenda C) Approved 3-0

69. Approve a lease modification with Bitter End Boatworks for property located at 1000 Hilton Avenue? At the 10/6/2016 meeting, vote #128, the lease was modified to add 21,000 square feet of additional property to the lease premises to provide added boat storage and to relieve congestion in the existing facility. The lease term was month-to-month with a 30-day termination clause. This modification converts the term for the additional property to a term coinciding with the period for the initial lease area, which extends to 12/31/2017 and includes one three-year renewal term. The rent remains the same through 12/31/2017. (5789/Consent Agenda D) Approved 3-0

70. Approve a memorandum of understanding with Pando Innovations of Bellingham for the purchase and sale of property and improvements, and a lease for real property generally located at 800 Cornwall Avenue? Pando desires to expand to meet growing demand for commercial and residential applications of solar panels. The Cornwall warehouse will allow Pando to consolidate operations. In late 2014, staff and Pando began negotiating for the use of an existing 48,000 square foot warehouse and approximately three acres of real property on Cornwall Avenue. Negotiations have resulted in this MOU. Transaction points: purchase and sale of an approximately two acre parcel including 1.56 acres of improved property including East Ivy Street and Myrtle Street rights of way and .44 acre of unimproved property for $900,820; purchase and sale of Cornwall warehouse improvements for $800,000; ground lease for approximately 1.34 acres for an annual rent of $42,000; port’s right to purchase real property and improvements should Pando choose to sell; Pando’s right of first offer should the port choose to sell either the banding yard or the 1.34 acre leased parcel; and port shall provide up to a maximum traffic impact fee credit of $70,000. (5790/Action Item 1) Approved 2-1, Bobbie Briscoe opposed.

71. Authorize the executive director to award the low bid of $234,462 to Razz Construction of Bellingham for construction of a barge loading ramp at the C Street terminal? The engineer’s estimate was $200,000. The contract period for Phase 1 of the project — providing a barge ramp that can be lifted into place by crane when a barge is present and used in this temporary over-water position — is 120 calendar days, from May through August 2016. A contingency fee of $50,000 brings the total contract to $284,462. (5791/Action Item 2) Approved 3-0

72. Increase the contingency fee by $30,278 for completion of the Bellingham Shipping Terminal repair project? A large area of rot in the pier was discovered that was not found in the condition survey. The need for this contingency is anticipatory; it is unlikely to be fully deployed. Razz Construction was awarded the low bid at the 11/17/2015 meeting, vote #150. This contingency fee brings the new total authorized contract to $710,000. (5792/Action Item 3) Approved 3-0

Authorize the executive director to sign a lease modification with The Landings at Colony Wharf for premises at C Street adjacent to the Whatcom Waterway? Chevron donated the property at 1020 C Street to the port; see the 11/2/2004 meeting, vote #109. The property is part of the old Roeder garbage dump. At he 9/5/2006 meeting, vote #102, The Landings at Colony Wharf entered into a harbor land lease for approximately 3.52 acres of land; the lease expired on 1/31/2012. At the 5/4/2014 meeting, vote #61, the commission approved a 10-year harbor land lease with The Landings at Colony Wharf. The lease authorizes use of approximately 6.7 acres of land and 43,000 square feet of buildings and sheds for marine-related activities. The lease acknowledges that the premises are encumbered by Whatcom Waterway and Central Waterfront environmental cleanup sites. Colony Wharf acknowledged that partial or complete disruption of Colony Wharf operations is possible. On 1/7/2016, Colony Wharf requested that their current percentage rent be extended for 24 months. The average rental payment has been $6,800 per month (with $5,500 to the port). Rent as currently scheduled in the lease is set to increase to $16,300 per month (with $11,200 to the port). If the modification of lease is approved, the port would be forgoing about $5,700 in rent per month. Given an additional one year of percentage rent, the port would forgo about $68,000 in total revenue. (5793/Action Item 4) Approved 2-1, Dan Robbins opposed.

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