The companies seeking to build the Northwest’s largest oil-by-rail terminal at the Port of Vancouver have thrown a counterpunch at the developer who argues the terminal will severely curtail his plan to construct a $1.3 billion commercial/residential redevelopment of the city’s waterfront.
In a market analysis commissioned by Tesoro Corp. and Savage Companies — operating together as Vancouver Energy — Heartland LLC, a Seattle-based real estate advisory firm, says “that under reasonable market input assumptions,” the waterfront project “is not viable as conceived, making an argument about the impacts to value from the proposed terminal irrelevant.”
Waterfront developer Barry Cain, president of Gramor Development — a member, along with local investors, of Columbia Waterfront LLC — called the analysis “trash.” Tesoro and Savage are “working against the waterfront,” he said Thursday. “They’re working against what’s good for the downtown, because what they’re doing is bad.”
The Heartland analysis is available for public review as part of a 2,161-page preliminary draft environmental impact statement submitted by Tesoro-Savage to the Washington State Energy Facility Site Evaluation Council. The companies posted the draft document on their Vancouver Energy website, a decision that has prompted criticism from opponents who say the release is premature in the exhaustive review process.
The Heartland study is just one piece of a larger decision-making process. But it intensifies a public battle between Tesoro-Savage and Cain, who, in December 2013, submitted analyses to the evaluation council showing the oil terminal would undercut the waterfront project and hamper investment in the downtown area. The oil terminal would be built less than 2 miles west of the 32-acre waterfront site, which is next to port and BNSF Railway tracks.
‘Financially feasible’
Tesoro-Savage hired Heartland to help deal with Cain’s concerns. Yet the joint venture seeking to build a terminal that would receive an average of 360,000 barrels of crude per day at the port also faces opposition from the city of Vancouver. In voting 5-2 for a resolution opposing the oil terminal, the Vancouver City Council noted the city invested about $45 million in transportation infrastructure serving the waterfront site. The resolution outlines multiple concerns, including that the waterfront project “could be impacted” by the oil terminal.
City Manager Eric Holmes said Thursday he’s not bothered by the Heartland analysis and that the city supports the waterfront project developers. The waterfront project, he said, is a long-term investment in the city’s future. Mayor Tim Leavitt echoed Holmes’ remarks. You can conduct “10 different economic analyses,” Leavitt said, and receive a different perspective “from each and every one of them.”
The Heartland analysis examined many factors, including rents, capitalization rates and structured parking. And while the waterfront project “could outperform the Vancouver market,” according to Heartland, the company’s analysis “would stop short of the notion that the project will be able to realize performance on-par (let alone above-par) with that of Portland’s newest master-planned community, the South Waterfront.”
Heartland’s analysis also asserts the waterfront project will “continue to suffer from the externalities of I-5 traffic noise, location within the flight path of Portland International Airport, and the view across the river to the Jantzen Beach mobile home park.”
As a path to viability, the analysis says, “we recommend the (waterfront) developer structure a development program that minimizes structured parking (especially below-grade), allows for at least interim surface parking, and targets economical construction methods that don’t require achievement of top-of-class rents to be financially feasible.”
Cain fired back Thursday, saying Tesoro-Savage can’t make the case that the oil terminal won’t negatively impact the waterfront project, so they’re using the Heartland analysis to try to lessen the project’s value. And it’s folly to argue Vancouver is a cheap market, Cain said, because the waterfront project must be compared with similar developments in the context of the greater metro area. “Vancouver isn’t an island all by itself,” he said.
‘A little unusual’
Meanwhile, opponents of the oil terminal questioned Tesoro-Savage’s decision to post its preliminary draft environmental impact statement on the joint venture’s Vancouver Energy website.
Jim Luce, a Vancouver resident who chaired the state Energy Facility Site Evaluation Council from 2001 to 2013, said he doesn’t recall a project applicant ever taking the step of releasing a draft environmental impact statement before it was reviewed by the council. “It is the responsibility of the energy siting council to release that document to the public,” said Luce, who is working as a consultant for Columbia Waterfront LLC. “Frankly, in my opinion, it’s a little presumptuous of applicant to be releasing that before EFSEC has released theirs.”
Said Vancouver City Attorney Bronson Potter: “I do think that it’s a little unusual for the applicant to make a preliminary draft to publicize it before the agency has reviewed and adopted it.”
Jeff Hymas, a spokesman for Savage, said the companies have “made clear on our website that the contents of this preliminary submittal are considered just that —preliminary.” The evaluation council and its consultant are ultimately responsible for preparing impact documents, Hymas said. The draft document is a public record under the state’s Public Records Act, he said, so Vancouver Energy posted the draft online to make it publicly accessible and to reduce the administrative burden on the evaluation council. “We consulted with (the evaluation council) staff before posting (the draft) documents on the project website,” Hymas said.
The evaluation council is examining air, land, water and other impacts of the Tesoro-Savage proposal. Eventually, it will make a recommendation to Gov. Jay Inslee, who will approve or deny the project. Opponents may appeal to the state Supreme Court.
Staff writers Erin Middlewood and Stephanie Rice contributed to this story.
