Former Olympia mayor to port: Begin shutting down marine terminal

Former Olympia Mayor Bob Jacobs called late Monday on the Port of Olympia Commission to begin the process of shutting down the marine terminal, saying the waterfront operation is no longer the destination it once was and continues to lose money.

“It’s time to recognize that this (marine terminal) location made really good sense 100 years ago, but the times have changed,” he said. “It really is time to start preparing to shut it down.”

Jacobs, who served as mayor in the 1990s, is a frequent critic of the port’s finances. His comments Monday were similar to those shared in a recent letter to The Olympian.

He also said he had delivered the same message to the port commission about a month ago, and the response he got then was that the marine terminal needed to diversify its cargoes to perform better.

Jacobs said he has heard it all before.

“That would’ve been the right answer many years ago,” he said about diversification, “but it is not the right answer today.”

The marine terminal has had better years, but 2015 was not one of them.

Total port operating revenue last year fell 34 percent, pulled lower by a lack of business at the marine terminal. Projected revenue for 2015 at the terminal was $8.3 million, but actual revenue fell to $3.3 million, according to port data.

The port used to regularly import ceramic proppants, also known as fracking sand, to ship to drillers in the North Dakota oil patch. But after oil prices crashed, fracking sand imports came to a stop. The last delivery of fracking sand by ship was in January 2015.

Jacobs acknowledged that closing the marine terminal would be a long, complicated process, “but it is time to start making those preparations.”

“Let’s be rational and do the right thing,” he said.

Jacob’s comments elicited a range of responses from the commission.

Commissioner E.J. Zita acknowledged that the port has not been meeting its financial benchmarks. Increased recreation and tourism could be beneficial to the marine terminal, she said.

She also said that if “shipping is not earning its keep, perhaps we should be looking at long-term changes.”

But she also said the port needed to be sensitive to longshoremen who receive their income from the marine terminal.

Zita has asked Executive Director Ed Galligan to prepare a cost/benefit analysis of the marine terminal, she said.

“What would the consequences of changing our direction at the marine terminal be?” Zita said.

Commissioner Joe Downing said he is studying the port’s operations.

“I’m starting to feel like part of my legacy might be to look closely at the port’s operations to make sure we are operating the port in the best possible way,” he said.

He said he is working hard to make the port “transparent, accountable, so people can see how we’re spending their dollars and that we’re making good investments.”

Commissioner Bill McGregor was the most bullish on the marine terminal. He cited state law about port districts, saying the Legislature didn’t design them to make money, but instead they were created for “economic development, tourism, infrastructure improvements and to provide jobs.”

The vast majority of port districts in the state are not on the water. Instead, they typically operate industrial parks and lease land.

McGregor said the marine terminal has a role to play in national security matters because it could become a second port for Joint Base Lewis-McChord.

“We need to be ready to serve them,” he said.

So far, 2016 could be a better year for the marine terminal.

Galligan said Monday that the marine terminal warehouse is filled to the ceiling with organic corn from Turkey, which is being shipped out of the port by truck. The port also recently received a shipment of fracking sand by truck.

This story was originally published May 9, 2016 at 10:24 PM with the headline "Former Olympia mayor to port: Begin shutting down marine terminal."