Columbia Grain Extends Port Lease,
by Erik Siemers
Columbia Grain Inc. plans to invest as much as $45 million over the next 30 months to expand its Portland grain handling facility.
The Port of Portland Commission paved the way for the expansion Wednesday when it approved a 25-year extension of Columbia Grain's lease at the port's Terminal 5.
According to the port, Columbia Grain will expand its T-5 operation to meet growing customer demand by adding new storage, cleaning, transporting and inventory management systems. The moves could also allow the company to increase its business in corn and soybean exports. Work is expected to conclude within 30 months.
As part of the investment, Columbia sought to expand its port lease, which dates back to 1984 and was set to expire in 2014, to help it recover the expansion costs and generate a return on investment over a longer term.
Under the terms of the amended lease, Columbia will pay the port $1,045,206 per year in rent, as well as a wharfage fee based upon the amount of tonnage it handles. The port estimates revenue from the wharfage fee at around $1.9 million annually. The rent fees will increase every five years, while wharfage fees rise annually using a formula based on the Consumer Price Index.
Columbia has invested $18 million in capital improvements, upgrades and other enhancements at the 43-acre facility since first becoming a port tenant in 1984.
"We are excited to extend our Terminal 5 ground lease, and this would not be possible without the Port of Portland's leadership and advocacy to deepen the Columbia River channel from 40 to 43 feet,"Columbia Grain CEO Tom Hammond said in a news release. "In addition, the port, BNSF Railway, Union Pacific and Columbia Grain have and will make significant investments in rail and facility expansion to insure that Terminal 5 remains competitive in the future."
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