Cascade gets port help with dock lease
Shipyard owner gets a better deal on its Navy-owned dry dock
The Port of Portland again has come to the aid of Cascade General, the financially troubled owner of the Portland Shipyard, by negotiating a lease for a U.S. Navy-owned dry dock for a lower rate than Cascade could get on its own.
The arrangement was disclosed last week when the port approved an updated management agreement for Dry Dock 1, the 57-year-old facility the port leases from the Navy and subleases to the shipyard.
The Navy originally wanted to increase the annual lease payment for the 598-foot-long dock, the older and smaller of the two remaining floating dry docks at Cascade, from $127,500 to $740,000. Port staff members successfully negotiated with the Navy, however, to lower the amount to $375,000 for the year beginning Feb. 1, 2002, and ending Jan. 31, 2003.
The port will sublease the dock to Cascade for the same amount, which could be offset by any money Cascade spends to maintain the dock. When the lease is terminated, Cascade must move the dock at its expense to wherever the government specifies and pay any related costs.
Dave Lohman, port policy and planning director, said in a report to port commissioners that Cascade 'has attempted to purchase or lease the dry dock directly from the government, but it was unable to achieve all the necessary approvals within the term of the current lease.' Those efforts will continue this year.
Rival shipyard owner Tom Maples of Mar Com Inc. complained in a December letter to the port commission that the port, by negotiating a lower lease, was favoring Cascade over other competing private businesses.
'The port has already provided much more to Cascade General than any other city or state should give to a private contractor,' Maples wrote.
In his reply to Maples, port Executive Director Bill Wyatt said that 'transitioning a wholly public asset as complex as the Portland Shipyard to an essentially private asset will take time and thoughtful engagement by the port.'
Wyatt said the agency is not subsidizing Cascade.
'The Port stands by its decision to get out of the shipyard business to concentrate on its transportation mission, and we will continue to hope for success in the local shipyard industry as a whole because of the quality jobs it provides,' the port director wrote.
Under the management agreement approved last week, Cascade also will pay $375,000 to the port this year Ñ in addition to the $375,000 lease payment for Dry Dock 1 Ñ as an early and partial payment on interest accrued on Cascade's $8 million unsecured debt. The principal does not come due until 2009.
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