Port of Grays Harbor

Special Commission Meeting

May 3, 2016

The Port of Grays Harbor Special Commission Meeting on May 3, 2016 was called to order at 8:30 a.m.

Mike Johnson, Contract and Project Manager, led the meeting in the Pledge of Allegiance.

Those in attendance at the meeting were as follows:

COMMISSION AND STAFF

Chuck Caldwell - Commissioner
Stan Pinnick - Commissioner
Jack Thompson - Commissioner
Arthur Blauvelt - Legal Counsel
Gary Nelson - Executive Director
Mary Nelson - Director of Finance & Administration
Leonard Barnes - Deputy Executive Director
Randy Lewis - Director of Environmental & Engineering Services
Mike Johnson - Contract & Project Manager
Alissa Shay - Manager of Business Development
Seth Taylor - Marine Terminals Manager
Shannon Anderson - Business & Trade Devel. Assistant
Marisa Yauch - Executive Administrative Assistant
Lisa Benn - Accounting Manager
Kayla Dunlap - Public Affairs Manager

VISITORS
Penny Eubanks - Pasha

Items discussed and action taken where required is as follows:

RESOLUTION

Resolution 2905
Gary Nelson reported that the Port purchased the NewWood assets in receivership about three and a half years ago. There were many efforts to find a tenant that could lease the space and use the equipment for produce product and jobs.

Alissa Shay mentioned that after the purchase of the equipment they worked with multiple businesses that had strong interest in using the equipment and space at Satsop Business Park. Unfortunately, for one reason or another, a tenant has not occupied the facility since NewWood vacated. The Port worked for over three years to find a suitable tenant and the decision has been made that it is the time to sell the equipment.

Mr. Nelson stated that multiple proposals were received on how to liquidate the items for the best return. Options such as auctioning and aligning specific buyers were considered. With EuroSource, the option we chose, this specialty equipment will be matched with appropriate buyers.

Doug Moore, owner of EuroSource explained his background and the beginning of this business in 1996. He has extensive knowledge of the industry and market where this equipment will be desired. Unfortunately, this equipment is very specialized and he does not feel there is a market currently for a tenant to locate here to produce product using the installed equipment.

This will be a calculated asset recovery of each piece for the highest prices on each item. The goal is to maximize recovery and leave the buildings leasable to the next tenant. An agreement between the Port and EuroSource includes pricing tiers for acceptable bids or instances where the Port will need to weigh the offer if it falls below satisfactory.

The brokerage agreement is for one year and it is written to allow adjustment for a potential new tenant should an interested party inquire before sales are complete.

A 17% commission on equipment will go to EuroSource once each sale is finalized. EuroSource is very familiar with the tax laws and will be diligent that these are followed closely with thorough documentation provided to the buyer and the Port.

Commissioner Caldwell asked about the market conditions. If they are unfavorable as stated earlier, why do you believe other companies would want to purchase this equipment.

Mr. Moore stated that there are other factories in the world that do similar manufacturing where this type of equipment is useful for them. If they are established, used equipment is much more affordable than new.

Mr. Moore has valuable experience in this field and is aware of the issues that can arise. A damage deposit may be required or other safeguards to ensure that money received for equipment is in irrevocable funds before anything is removed from the site. He will work closely with our financial team to be sure that everything runs smoothly on either end as the sales begin.

Motion to adopt Resolution 2905: A Resolution of the Port Commission to Declare Surplus the Process Equipment Acquired from NewWood Receivership and Authorizing the Executive Director to Negotiate and Execute Agreements with EuroSource, LLC for its Sale, was made by Commissioner Caldwell and seconded by Commissioner Pinnick. Motion passed unanimously with a vote of 3-0. Resolution Adopted.

The Special Meeting adjourned at 9:07 a.m.