A new lease approved by Port of Tacoma commissioners Thursday ensures the port’s nearly 40-year-old Schuster Parkway grain terminal will remain an active export facility until at least 2040.
The lease approved Thursday afternoon also contains two five-year optional extensions that could lengthen the lease’s expiration until 2050.
That lease, a modified extension of the existing lease with Cargill Inc., will substantially increase the port’s income from the facility.
The port, which has leased the grain terminal for a nominal $50,000 a year to Minnesota-based Cargill, will receive $460,000 a year rent from 2013 through 2025. Beginning in 2026, the basic lease for the facility jumps to $1.8 million. Beginning that year dockage fees are levied based on the gross tonnage of the vessels that call at the terminal. That dockage fee, 20 cents per gross registered ton for the years 2026 through 2030, then escalates in 5-year increments. Cargill pays no dockage fees now or through 2025.
The port built the terminal beginning in 1972 with active usage starting in 1975. The original lease amount was set to recover the facility’s $15 million construction cost over 30 years. Once that original lease ran its course, the port set the yearly rental at $50,000. Under that lease, however, the tenant is responsible for all building maintenance and repair and upkeep of the adjacent rail yard where grain cars are stored.
Larry St. Clair, the port’s director of non-containerized cargo, said Cargill approached the port last year asking to extend the lease. The grain company had signed long-term leases in Asia for grain-handling facilities, and the company wanted to ensure it had comparable facilities on this side of the Pacific where it could store and load grain into ships bound for Asia.
The grain terminal supports some 80 jobs. Many of those jobs are for highly-paid longshore workers who load the ships arriving at the terminal.
In recent years, the terminal added a huge canopy over the ship-loading area to keep the grain dry during the loading process.