The Port of Oakland has agreed to a lease termination agreement with bankrupt tenant Outer Harbor Terminals LLC.
The port’s Board of Port Commissioners approved the agreement the afternoon of Feb. 19, and it is now set for review by a bankruptcy judge in Delaware who is overseeing Outer Harbor Terminals’ request for bankruptcy protection.
In January, Outer Harbor filed for bankruptcy and announced its intention to close its Oakland operation, which is one of five privately-operated marine terminals at the port. If the bankruptcy court approves the lease termination agreement, Outer Harbor Terminal will close April 29.
The agreement terminates the 50-year lease that Outer Harbor signed with the port in 2009, and imposes several conditions, among them that Outer Harbor Terminal would continue Oakland vessel and cargo operations through March 31, and that it would pay about $6 million in February and March rent to the port.
The agreement also requires the terminal operator to clean up debris and remove equipment on the 166-acre property, plus pay the port $5.1 million for additional cleanup and repair.
In return, the port would provide free rent in April to ensure the terminal remains open for cargo operations until the shutdown.
“We’re not pleased to see a terminal close, but this agreement helps ensure a smooth transition for our customers,” Port of Oakland Maritime Director John Driscoll said. “All of our attention now is on efficiently migrating their cargo to the other terminals in Oakland.”
Earlier this month, the port developed a continuity plan to move ships and cargo to adjacent terminals when Outer Harbor Terminal closes, and also implemented a $1.5 million transition assistance program to extend gate hours at port terminals.
