More than a year and a half after confidential meetings between Tacoma and Seattle port commissions began, one Tacoma port commissioner says he has lingering doubts about how a proposed alliance will function.
“We’ve got to do things differently than now,” said Don Meyer. “I support the idea of an alliance.”
But Meyer said he thinks the way the shipping alliance is structured in the draft revealed last week has potential pitfalls for Tacoma.
“I have a real difficulty with the basic structure of the alliance,” he said.
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Veteran Tacoma Port Commissioner Connie Bacon takes issue with Meyer. She is surprised that Meyer still has doubts after countless hours of meetings and discussions with fellow port commission members from both ports.
“Don is passionate about his concerns,” said Bacon, “but I was nonplussed that he chose to bring these concerns up after so much debate and compromise.”
The two commissions met more than two dozen times in confidential meetings they say were allowed under the Federal Maritime Act. An Olympia government watchdog, Arthur West, is challenging the privacy of those meetings under the state Open Meetings Act. West lost in King County Superior Court, but is appealing that decision.
Meyer said he was uncomfortable with so much of the planning and discussion of the alliance being confidential. “I think we went too far in not giving the public the benefit of our thinking.”
Under the draft alliance plan formally unveiled last week, the two ports would form a public development authority to market and operate shipping facilities in each port. Each of the ports has designated terminals and other property that would be operated by the alliance under the leadership of Port of Tacoma Chief Executive John Wolfe.
Ownership of those cargo facilities would remain under each port, but the day-to-day leasing and, in some cases, operations of those facilities would be handled by the alliance.
Each port under the draft agreement proposed last week contributed facilities to the alliance for operations of roughly equal value. The alliance’s profits would be split equally between the two ports.
Meyer said he’s concerned that the facilities that Tacoma is offering the alliance have a more diverse domestic and international revenue base while the facilities contributed by Seattle are focused on terminals in the troubled international shipping sector.
Tacoma, for instance, is turning over operations of its Alaska cargo terminals, its auto import facilities and its break-bulk terminals to the alliance, as well as its international container handling terminals. Seattle’s contributions are mostly international terminals. Not included are that port’s cruise ship terminals or its fishing fleet facilities.
One of the principal reasons the two ports are forming an alliance is that the region’s share of the international container shipping trade has been slipping in competition with ports in Canada, Mexico, Southern California and on the East Coast.
The two ports say they’re joining together to market their terminals in part to attract new business, to improve customer service and to halt cutthroat competition among the two neighbor ports.
Meyer says he fears the revenue sharing between the healthy terminals in Tacoma and the troubled terminals in Seattle could affect Tacoma’s bottom line and its critical bond rating.
A poorer economic performance for Tacoma could push Tacoma port commissioners to consider raising port property taxes, he fears. The Port of Tacoma now collects some $13 million yearly in property taxes. The Port of Seattle collects about $70 million in King County, where property is more valuable than in Pierce County and there are more residents.
The Tacoma port commission member says he also fears that the Port of Tacoma may be borrowing trouble because of controversy surrounding Seattle’s Terminal 5. The Port of Seattle closed that terminal to consolidate its container business at other terminals. In the meantime, it has leased Terminal 5 as a winter base for Shell oil exploration vessels. That lease has brought protests to Seattle port meetings because environmentalists are concerned that oil drilling in the Arctic by those vessels will compromise the environment. Terminal 5, under the draft agreement, would be part of the Northwest Seaport Alliance properties.
Meyer also is concerned that the Port of Tacoma is unequally lending its most qualified and talented maritime staff to help run the alliance. Wolfe, likely to head the alliance, will remain the Port of Tacoma’s chief executive simultaneously.
Bacon said she believes that both domestic and international facilities should be included in the alliance portfolio in order to allow the alliance staff to offer potential customers a full range of services and properties.
“I’m surprised that Don can’t get past his parochial views to support the alliance,” she said.
Meyer said he’s not yet decided whether to vote to send the alliance plan to the Federal Maritime Commission for its approval. He will be considering carefully the remarks from the public about the alliance plan before making up his mind.
“It would be a lot easier to ‘get along, go along,’ ” said Meyer. “But I’m still considering if that would be the wisest course.”