Someone sent me a copy of a lawyer's letter addressed to Port Executive Director Jack Crider dated May 19th of this year. The letter, signed by J. David Bennett, renders his opinion of what might happen if the Port Commission failed to properly exercise it's lease with the Department of State Lands for the Skipanon property under sublease to Oregon LNG.
Guess what?
It absolutely confirms the chain of events that likely will occur if the Port fails to enter into the 30 year lease with the state that I had speculated in an earlier post here.
Bennet states "It is our strong recommendation that the Port exercise its option with DSL and extend the OLNG sublease."
That doesn't mean extending the current five year term but to continue along the lines of the original agreement which called for one five year term to be followed by two 30 year successive terms.
Bennett also states "It is likely that OLNG would be successful in a suit against the Port if the Port prevents OLNG from obtaining a new 30-year term. The damages OLNG would suffer would be subject to proof, but its initial thrust would be its out of pocket expenses (which would be in the millions of dollars) and loss of profits (which would be more difficult to show, since it is not currently permitted and the economic feasibility is not known)."
My understanding is that this letter dated in May is not the first piece of legal advice the commission ignored from different lawyers who said pretty much the same thing.
I would also say at this point that OLNG simply can't accept a change in lease terms and doesn't need to do so since they have unilaterally entered into the first 30-year phase of the agreement with the Port.
The Port commission is gambling that a current Department of Justice probe into past port dealings under Peter Gearin will somehow negate the lease agreement with OLNG.
I strongly doubt this is a possibility. The lease with DSL appears to be in order. The sublease with OLNG also appears to be in order. The motivation behind the terms of the leases are in question. Regardless of the outcome of that investigation it would take yet another suit to put the question of the validity of the lease before a judge based on the outcome of the investigation.
That's a very "thin ice" gamble for the Port and the taxpayers the Port owes responsibility.
The letter is posted on our main station site: http://www.kast1370.com/
What's your point Tom?
ReplyDeleteGood thing they, "The Port", didn't buckle under to that recommendation by Bennett's firm huh?
Now they, "The Port", have a 2 year DSL extension on the 5 year segment of "The Lease" to shake all this B.S. out and that can only serve the ineterests of the citizens that "The Port" serves.
Good move!!!
OLNG needs to sue somebody now, I guess it will be the State of Oregon head-on huh?
This will, nonetheless, be an interesting excercise to observe.
"Someone" sent you a letter threatening the port?
ReplyDeleteGee, wonder who that might be.
If OLNG has such a great case they'll sue and quit trying to run a PR campaign about a lease that benefits only them. Certainly not the Port and absolutely not the people of Clatsop County.
My question is, was this a legal opinion solicited by the Board, or was it just something received in the mail from someone who happens to be an attorney. Absent some verification as to what this attorney's connection, if any, is to this subject, it is difficult to imagine how the Board could take it as anything other than an opinion of questionable value. He could be paid by OLNG for all I know, or he could be someone who is connected directly or indirectly with related businesses that might benefit from a successful OLNG project there. Who knows? Or he could just be an interested party such as those like me who are taxpayers in the county and want our tax monies to be used properly and diligently. Unless I'm missing something (quite possible), this letter just doesn't add anything to the puzzle spread out on the Port and Public's table at the moment.
ReplyDeleteArt Hyland
Astoria
You can read the letter on kast1370.com. In it it is clearly stated that the advice was sought by Jack Crider on behalf of the Port Commissioners. We confirmed this with Crider before publishing it.
ReplyDeleteTom, I've been busy, so until just now didn't look back at this CoastWatch comment area; your added reference indeed led me to the entire letter including the fact that the Port requested the legal opinion. Therefore, your concerns are indeed understandable and reasonable. The only thing I can estimate that's going on would be some additional information the public is not privy to that mitigates the liklihood of an OLNG lawsuit being successful. Absent such important mitigating arguments, it would seem questionable for the Port to not extend the lease for the reasons the letter stated. As I said in another comment elsewhere, the investigation by the Prosecuting Attorney is perhaps a wild card here that is possibly a factor for the Port commissioners private reasoning, but we just won't know until it all shakes out. We have to hope that the commissioners are protecting the public's financial position including the risk of a lawsuit that indeed could be very costly. I generally do not like any entity public or private to run their business by being scared of legal consequences, but in this case, because of the rather clear wording on a previously signed contract, along with the verification by an outside attorney of its veracity, the Port's actions look rather risky. Perhaps the Port solicited one or more other legal opinions that differ from this, but haven't made them public. Again, difficult for the general public to know, or at least for a semi-casual observer to know. All anyone can do is request and demand full accountability, and you are doing so.
ReplyDelete