Many of you have read the news coverage in our local papers regarding lease renewal discussions between the port and our longtime tenant NW Packing. To supplement that coverage, the port’s CEO Todd Coleman answers some frequently asked questions:

What negotiations are taking place with NW Pack?

NW Packing’s lease expires at the end of this year, and we’re discussing renewal options. NW Packing would like to continue leasing the property at or below their current rate, which is approximately 60 percent below today’s fair market value.

Why does the port feel it’s necessary to transition the lease to fair market rate?

First, the terms of NW Packing’s current lease requires that rent be adjusted to fair market value if the company chooses to extend the lease. It’s a contractual agreement. Second, the port is committed to approaching all port industrial properties in a consistent manner. Over time, we’ve adjusted other “legacy leases” to fair market value as those leases were renewed. As a public agency, we consider it a matter of integrity and good financial stewardship.

How does the port determine fair market value for the property it leases?

The port hires independent, professional appraisers who specialize in valuing industrial property. The appraised value is based on the specific location of a property and the individual characteristics of the property, such as size, zoning, topography, access and the specific characteristics of the property being appraised compared to other similar properties in the same market area. Appraisal industry standards do not consider how the industrial property is used (as in this case for fruit packing) when determining the fair market value of a property.

Does the port want NW Packing to stay at the port?

Absolutely. The company is an important port tenant and provides a significant number of jobs in our community, and we don’t want to see them relocate. However, we understand that businesses are regularly faced with difficult decisions when it comes to keeping costs down and their operations viable. We know NW Packing is currently facing those types of decisions. From the port’s perspective, the only thing that would be worse than losing NW Packing as a tenant; would be seeing them close up shop entirely. We understand that they need to do what’s best for their company.

If the company chooses to relocate, does the port have plans for the 16 acres currently leased by NW Packing?

No, we have no plans for that property. Again, we hope NW Packing remains on that site for years to come. Our hope is to find a solution that works for both the port and NW Packing.