There is an old saying about purchasing expensive items that goes something like “Price is no object, its the terms that count”. Southport Forest Products appear to have gotten some very desirable terms for what some would argue is overpriced real estate. According to September, 2010 Port minutes Southport Chip Co, LLC only paid a $7,500 down payment, less than 1% of the purchase price and received an excellent 3% interest rate. Wow!

An Option to sell real property to Southport ChipCo., LLC, was authorized at the September 16, 2010 Regular Meeting. Southport has now exercised the Option and the matter is proceeding toward closing. This transaction includes the sale of approximately 32.88 acres more or less together with the tidelands fronting and abutting on such property to Southport ChipCo, LLC. The transaction also includes an easement for access across a strip of land that the Port is reserving for future rail improvements. The Oregon International Port of Coos Bay has extended credit to Southport ChipCo, LLC for the purchase price of $1,337,100 of which $7,500 consisted of the money paid as an option to purchase, and the balance of $1,329,660 shall be paid in monthly installment payments of not less than $7,373.93 including interest on the declining balance at the rate of 3% per
annum. Final payment is due on or before twenty years from the date of this trust deed.

Southport Lumber originally moved to its North Spit location to take advantage of enterprise zone property tax exemptions. According to October 2009 Port minutes the intended use for the thirty-three acres is to establish a whole log chipping facility and is projected to add twelve local jobs.

Approximately 23.68 of that acreage is upland acres and 6.32 acres of that is wetlands. SouthPort is also asking for the tidelands that abut the property. They are offering $50,000 an acre for the uplands and $500 per acre for the wetlands. The intent is to install a whole log chipping facility and increase what they do out there. It will add 5 jobs initially and another 12 to follow for a second shift. They have a long term plans to install docks and marine dependant infrastructure on the property.
In June of 2009, they approached us about an option and at that time the Port did an appraisal of the property. The appraisal came back at $50,000 an acre for the uplands and $500 per acre for the wetlands so they are offering the appraised value. They are asking the Port to carry the contract which ends up with a sale price of about $1,187,160 for 20 years at 3% interest. It equates to about $79,000 per year added to the Property Reserve Fund.

Word that Southport had decided to exercise the land option came coincident with news that emergency railroad line repairs are being conducted to facilitate Roseburg Forest Products in exporting wood chips. Wood chips are used in the production of paper and some press board products. In June 2003, Weyerhaueser closed its local paper mill, laid off all its workers, shipped the equipment overseas and dismantled the buildings despite turning an estimated profit of $12 million annually.

Roseburg Lumber has laid off 230 workers in Douglas and Coos County and now plans to export raw material, effectively exporting jobs out of Oregon. It has been reported in The World that reactivating the rail line will create 3,000 rail dependent jobs. The public were told that the county owned 12″ pipeline would create 2,900 jobs.