Environmental concerns have derailed plans for a new grain export facility at the Port of Portland.
The port wanted to develop about 300 acres it owns on West Hayden Island on the Columbia River north of Portland, Ore.
Tentative plans for the project would have included a grain export terminal, an auto processing facility, onsite manufacturing and about 500 acres of natural areas.
To allow for development, however, the property would have to be annexed into the City of Portland.
“You can’t develop it into a maritime terminal without the appropriate zoning and access to city services,” said Josh Thomas, marketing and media relations manager for the port.
In July 2013, the city’s Planning and Sustainability Commission agreed to annex the land.
However, environmental mitigation measures required by the commission rendered the plan prohibitively expensive, Thomas said.
“It simply priced it out of the market,” Thomas said.
Leasing industrial land in the area usually costs about $5 to $7 per square foot, he said. With the mitigation measures sought by the city, the total lease price would have to be about $12 per square foot.
Realistically, the port could not charge such high rents — and thus wouldn’t be able to cover its expenses in preparing the site for development, he said.
“Not on our best day,” Thomas said.
Since the City of Portland was unwilling to negotiate its mitigation measures, the port decided to shelve the project indefinitely despite having spent $1.6 million on planning, he said.
“We haven’t abandoned all hope, but we’ve abandoned it for now,” Thomas said.
The situation is unfortunate because the port saw interest in the market for new bulk and auto terminals, Thomas said. The facilities would also have generated up to 4,000 jobs.
“If you don’t have a place to grow here, it will just go elsewhere,” he said.
Farmers generally benefit from new grain export facilities, said Ken Eriksen, senior vice president of Informa Economics.
Export terminals must “incentivize” farmers to supply their facilities, which helps to increase or at least preserve prices, he said.
“You’ve got more competition,” Eriksen said.
It’s rare to find a property as perfectly suited for a grain exports as West Hayden Island, said Blake Rowe, CEO of the Oregon Wheat Commission.
“I think it’s a lost opportunity, or a delayed opportunity,” he said. “If you want to expand grain facilities, there’s only so many places you can grow.”
Not only is the site along the deep draft channel on the Columbia River, but it’s also near two interstate highways and a major rail line, said Kristin Meira, executive director of the Pacific Northwest Waterways Association.
“That type of land with access to river and surface transportation is in short supply,” she said. “It’s really a plum location for new terminals to be constructed.”
While there has recently been significant expansion to grain export capacity in the Northwest, new investments must be considered over the long term, said Eriksen.
Over the next two decades, exports are projected to rise and the existing system will likely hit its export capacity, he said.
When grain can’t be shipped efficiently during the prime export months, it can back up the supply pipeline and hurt market opportunities for farmers, he said.