Remember all the excitement and buzz in June of 2007 when Senator Joanne Verger proudly announced HB 5036, supported by Rep Arne Roblan, would provide $60 million towards deepening and widening the Port of Coos Bay for a container facility? The World wrote,
House Bill 5036, which Verger said Gov. Ted Kulongoski has promised to sign, secures $5 million for the dredging project this year, if APM Terminals North America commits to coming to Coos Bay. An additional $55 million in state money would be spent on the project over the next four years.
Verger revealed in March of that year, that A.P. Moller-Maersk, cryptically referred to as ‘Project April’ in Port of Coos Bay minutes, was considering the North Spit for a new container terminal prompting her to sponsor a bill, “SB21”, which later became HB 5036, to fund widening of the bay within certain conditions and restrictions. Port CEO Jeff Bishop at the April port commission meeting says, “SB 21 is solely contingent on a commitment from Project April” and further says “no state funds would be made available to the Jordan Cove Project”.
Bishop downplays an unfavorable 2003 feasibility study by Parsons Brinkerhoff, “Feasibility Analysis For a Modern Marine Cargo Facility in the Port of Coos Bay, Oregon “, saying it was “targeted specifically to break bulk and not containers”. Bishop goes on to acknowledge “Project April remains speculative — far from a certainty”
That was April and by June the governor was signing a bill allocating $60 million in lottery funds, subject to conditions, for the Coos Bay Channel Project.
(4)(a) Prior to the distribution of bond proceeds described in section 13 (2)(a) of this 2007 Act, the primary sponsor shall provide to the director a budget document outlining expenditures for the Coos Bay Channel Project and verify and certify to the director that:
(A) The primary sponsor has entered into a commercially reasonable agreement with a cargo terminal developer to construct and operate cargo terminal facilities on the Coos Bay channel; [emphasis mine]
(B) The Secretary of the Army has authorized the performance of environmental studies on the channel pursuant to section 203 of the Water Resources Development Act of 1986 (P.L. 99-662); and
(C) The cargo terminal developer has entered into, or made appropriate progress in negotiations toward, a contract with rail service providers to ensure adequate rail infrastructure and service capacity to serve the cargo terminal facilities to be developed as part of the Coos Bay Channel Project.
As of June, there were still two key components missing before getting the first $5 million, progress towards providing rail service and a “commercially reasonable agreement to construct” a cargo terminal. In August, Bishop requested the Port commission ratify authorization to sign an agreement with “Project April”. Jody McCaffree requested a copy of this August 2007 agreement but was instead provided with a redacted subsequent agreement dated May 15, 2008.
The May 2008 document is curiously redacted but this section looks more like a plea than a “commercially reasonable agreement” to “construct and operate” a cargo terminal-
As set out in Section 1, in consideration of the substantial time and expense that APM has already invested in its investigation of locating operations in Coos Bay and in order to induce APM to continue to invest in negotiating the feasibility of constructing and operating a container terminal in Coos Bay
Perhaps the apparent shakiness of the agreement with APM is where the lobbying services of Steve Marks came into play and earned such high praise from Bishop in July, 2007 and a plum consulting contract.
Mr. Bishop recognized Steve Marks of Marks Network. Mr. Marks has helped the Port quite a bit on the 203 process. He will be coordinating some of the technical issues of the dredging process. Port staff will probably put together a more detailed presentation of the 203 process and timeline when negotiations are finalized. Mr. Bishop thanked Steve for all of his help.
Whatever is in the August 2007 agreement and whatever progress was being made with CORP (Central Oregon Pacific Railroad), operator of the Coos Bay Line, was apparently enough to satisfy the Director of the Economic and Community Development Department and presumably the Attorney General giving the Port a green light to start spending. Giddy with the opportunity and unable to wait until lottery bonds issued in the spring of 2008, the Port commission agreed in September 2007 to 1) establish a line of credit with Umpqua Bank to provide interim funding for the “Federal Channel Deepening Project – feasibility study phase”; 2) commit all $5 million including a contract with David Evans Associates for up to $4,592,330 to conduct the “Feasibility Study, the Environmental Impact Statement and to negotiate the Memorandum of Agreement with the U.S. Army Corps of Engineers for the oversight process”.
Once all that was ratified, moved, voted on and approved, the commission adjourned to an executive session to discuss the news that CORP, critical to condition 14 (C) of HB 5036, had embargoed the Coos Bay Line. Returning to open session the commission authorized Bishop to bring suit against CORP and its parent company, RailAmerica, ultimately leading to the Port purchasing the Coos Bay Line for $16+ million.
We now know APM Terminals chose Vancouver, Canada over Coos Bay and while everyone from Ron Wyden and Peter DeFazio have ridiculed CORP for pulling out without six months notice it is hard not to speculate that CORP got a look at the August, 2007 “commercially reasonable agreement” with APM and found it lacking in substance and not consistent with what the Port had been claiming.
In May, 2008, the Port commission authorized Bishop to enter into a “SECOND AGREEMENT OF UNDERSTANDING” with APM and was advised the Director of the Oregon Economic and Community Development Department has requested the Department of Administrative Services issue Lottery backed revenue bonds for the Coos Bay Channel Project.
I knew what happened to the 60 million for the dredging, Go to the “Mill Casino” on Highway 101 where the logging mill was once at. They took that money and built a concrete hotel. And it average $150 a night there.
What people do not realize is the APM, like many industrial concerns played Vancouver against Coos Bay to get a better deal in BC. These corporations are lured all over the globe and frequently place two or three governments bidding against each other. This is a classic. What the State of Oregon and the International Port of Coos Bay did was allow themselves to get played so that APM could get the best deal they could from the place the actually intended to go from the very beginning. All the while Mr. Bishop pulls down what $750.00 per day?
Methinks an email may be good for a start, fred, am working on one now and I encourage everyone else to inquire as well
Greetings from the first person making the paid to consider observation. Some of us worked with three letter organizations where professionals redacted documents – the person with this magic marker wasn’t. The port is obligated to report on expenses. Why don’t one of you folks go to the next port meeting, with camera rolling Mr. DeMille, look Mr. my poop don’t stink chairman in the eye ball, and ask, how much was paid to APM or to any party for any purpose related to the siting of a terminal at Coos Bay. And, specifically, under the received redacted document, what is the port obligation regarding payment to any party of any monies. I doubt the man will want to answer.
Funny, aghast! you are the second person in less than a day to make that observation to me.
It might have been the beer, the lime and the beer, or the hot peppers in the salsa but a few of us read that agreement and we think it looks like the port paid apm terminals to look at coos bay – just saying, as in reading between the black spots
Running it the old way was just as bad. Neither way allows for a real plan that the community is invited to agree on. Bishop is driving this train wreck and the board just sit in the dining car looking at the scenery
Of course, wring is wrong.
Wring about the dredging monies. West Coast Contractors, a small local business operated by the chairman and Mr. Smith, is not in the dredging business – the US Army Corps of Engineers is.
If my mail is repreentative of fact, there are many who want to commence an effort to reverse the decision of 1987 and return that bloated, overstaffed, feifdom port from a state port district run by a group of the governors political appointees to a locally managed port goverened by the people paying the millions in taxes to operate the port. So far my research locally and in Salem suggests that passing a simple ballot measure could accomplish that. But, are locals prepared to operate a port?
Isn’t the Chairman of the Board the guy who gets the millions for dredging? Kind of keeping it in the house? Am I wrong on this one?
Where IS the 5 million now? Might be sitting under or on top or next to the other 7 Million in someones’ closet.
I’m confused, I attended a public meeting at the Port and tried to ask a question, was rudely stopped and was told “we don’t answer to the public, you may speak to us, but we won’t answer your (bosses’) questions at all.
And I’m told they do not respond to questions by mail usually either. Don’t know, I’ve not tried.
So this is a public commission sucking multiple millions of dollars from our pockets and they refuse to be asked questions publicly?
Is it legal?
Is it legal that they have absolutely NO conversation AT THEIR PUBLIC MEETINGS, NO discussion of the issues. The Very Big Guy speaks, the others vote yes. Every time, so when do they discuss the issues they vote on?
IS IT LEGAL FOR THEM TO CONTINUE DOING SO?
People do business behind closed doors do so for a reason.
Doesn’t take much to meet a $5,000,000 payment. Has the DA looked at this?