Just a month after it approved a temporary container subsidy plan to boost business at its struggling Terminal 6 facility, the Port of Portland has sanctioned a subsidy for the terminal’s operator, ICTSI Oregon.
On a majority vote during its Feb. 13 meeting, the nine-member Port of Portland Commission authorized as much as $3.7 million in rent rebates to ICTSI, which operates Terminal 6 under a 25-year lease. The vote was 6-1, with one abstention and one board member was absent.
Commissioner Tom Chamberlain, president of Oregon AFL-CIO, was the abstaining member, while the lone vote against the subsidy was cast by Commissioner Bruce Holte, president of ILWU Local 8. In explaining his opposition to the rebate plan, Holte called ICTSI Oregon a “failed enterprise” that the port must “walk away” from.
No tax dollars are involved in the subsidy: the rent rebate, effective during the 2013 calendar year, comes directly from the $4.7 million in annual rent received from ICTSI Oregon, with the amount not to exceed $308,333 per month. The port says it intends the payments, which take the form of rent reductions, to be savings that ICTSI can pass on to shipping lines so the ocean carriers continue bringing vessels to Portland.
Commission President Jim Carter said the rebates are viewed as just a temporary measure.
“Moving forward, we must stay focused on long term solutions,” he said. “The end game is keeping the container terminal operating.”
The agreement requires that existing container services are retained and that the carriers call at the same frequency as during 2012. If there are changes in service levels during the rebate period, the port has the discretion to reduce payments in proportion to the service change. Also, if labor productivity improves, the port has the ability to decrease the rebate payments.
Under a similar rebate plan, which was approved on a 7-2 vote Jan. 9, a $10 per container subsidy is being given to carriers calling at the facility, with the amount to be doled out capped at $1 million. Like the newly approved rebate plan, the money comes from ICTSI’s rental payments.
“The container terminal has been a mission critical part of our marine operations and we are doing everything we can to ensure it remains that way,” Sebastian Degens, the Port of Portland’s general manager of marine and terminal business development, said. “This is a delicate and complicated phase of a relatively new terminal lease arrangement. It is in our shared interest to ensure it is successful and that our customers have certainty of continued, reliable service through Terminal 6.”