The Port of Vancouver on Tuesday signaled it’s ready to use eminent domain to settle how much it should pay Pacific Coast Shredding — a port tenant — for acquiring a piece of the company’s property to build a key segment of its $275 million freight-rail expansion project.
The port’s Board of Commissioners unanimously approved a resolution allowing the port to launch a legal process to decide “just compensation” for acquiring roughly 1.1 acres of the nearly 14 acres Pacific Coast Shredding leases from the port.
Under the two parties’ current lease agreement — adopted in September 2011 and revised two years later — the port already has the right to access the parcel to build a $38 million grade-separated rail entrance to move cargo into and out of the port more efficiently.
At issue is how much the port should pay Pacific Coast Shredding, which has raised concerns about the port’s handling of the matter, for the inconvenience.
Both parties have been unable to agree on a price. As a result, they’re bound by the lease agreement to kick the compensation question to a neutral judicial proceeding under eminent domain. The port has until Friday to launch that process. The commissioners’ action Tuesday prepares the port to do so.
The port prefers to avoid the condemnation process, said Theresa Wagner, the port’s communications manager. But lease terms require it to be ready to do that. The two parties remain in negotiations, she said. “Our hope is that we won’t need to condemn.”
Joe King, a spokesman for Pacific Coast Shredding, said Tuesday the commissioners’ decision was unnecessary. The Jan. 31 deadline could have been extended to allow more time for negotiations, he said, to avoid an eminent domain action.
“We could have moved that date out,” King said. “We’re just disappointed that commissioners (are) being heavy-handed. Condemnation is a very serious thing.”
‘The crown jewel’
Port administrators say the port is following state guidelines in acquiring the property at Pacific Coast Shredding to construct a new rail entrance as part of its larger $275 million West Vancouver Freight Access project.
The company, a port tenant since 1997, breaks down hundreds of thousands of tons of recycled scrap metal for shipment overseas. The metal processor’s parent is Metro Metals Northwest Inc., which operates in Vancouver and Portland.
During Tuesday’s public hearing, Curtis Shuck, the port’s director of economic development and facilities, said Pacific Coast Shredding “continues to work closely” with the port to move through the land-acquisition process.
Cager Clabaugh, president of the International Longshore and Warehouse Union Local 4 in Vancouver, told commissioners the company represents “a lot of our work right now” and that he doesn’t want to see it hurt by the port’s action.
“I don’t want you to run off (Pacific Coast Shredding),” Clabaugh said.
Commissioners and port administrators say that’s not what’s happening.
While eminent domain may raise red flags in the public’s mind, said Commissioner Jerry Oliver, the port’s action is part of the agreement “the parties entered into.” And the port’s decision to prepare for a third party to decide the compensation matter “does not preclude ongoing dialogue and negotiations” between the two parties, he said.
“It’s a tool in the toolbox,” added Commissioner Brian Wolfe.
The port has called its planned $38 million rail entrance — for which it needs the piece of property at Pacific Coast Shredding — “the crown jewel” of its $275 million rail-expansion project. The rail entrance is intended to eliminate a chokepoint on the regional rail system and to reduce congestion by as much as 40 percent.
In a news release in August 2013, the port said the rail entrance, which is being built in four phases, is expected to wrap up in 2015.
The larger West Vancouver Freight Access project aims to speed freight and to attract more private-sector investment and jobs. The project is roughly 50 percent complete.
King said Pacific Coast Shredding understands the importance of the rail project. “We think it’s a good thing for the port to do the rail,” he said. “It doesn’t necessarily benefit us.”
