Outer Harbor Terminals LLC, the joint venture between Ports America and TIL Group that is ceasing operations at the end of March, will pay rent, utilities and clean-up costs to the Port of Oakland as part of the lease termination agreement.
The Port of Oakland has agreed to a lease termination with Outer Harbor Terminals LLC, the joint venture of Ports America and TIL Group that announced in January it would end operations at the end of March.
The port’s board of commissioners approved the agreement late Friday afternoon, and it will now be reviewed by a bankruptcy judge in Delaware overseeing Outer Harbor Terminals, LLC’s financial proceedings.
Outer Harbor Terminals announced in January its intention to close its Oakland terminal and filed for bankruptcy protection under Chapter 11.
The port said it agreed to the termination “to devote its full attention to improving service to cargo owners and other customers in the aftermath of the terminal closure.”
“We’re not pleased to see a terminal close, but this agreement helps ensure a smooth transition for our customers,” said Port of Oakland Maritime Director John Driscoll. “All of our attention now is on efficiently migrating their cargo to the other terminals in Oakland.”
The agreement imposes several conditions:
• Outer Harbor Terminal will continue Oakland vessel and cargo operations through March 31.
• Outer Harbor Terminal will pay about $6 million in February and March rent to the port.
• The terminal operator will clean up debris and remove equipment on the 166-acre property.
• It will pay the port $5.1 million for additional clean-up and repair.
• And the port will provide free rent in April to ensure Outer Harbor Terminal remains open for cargo operations until the shutdown.
The port has developed a continuity plan to move ships and cargo to other Oakland terminals and is providing $1.5 million to help fund extended gate hours at port terminals.
Elsewhere in Oakland, the city council last week delayed a vote on a plan to award a contract to a consulting firm to prepare an analysis of potential health and safety effects of commodities, including coal, that could be handled at a dry bulk terminal that developers want to build adjacent to the San Francisco-Oakland Bay Bridge.
The terminal would be located on city land, just outside the Port of Oakland. The terminal might handle also handle other mineral products such as soda ash, potash, borax and salt, but the possibility that it might handle coal has created a storm of controversy.
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