Item 7a Supp
Item No. 7a Supp Date of Meeting July 28, 2009 Terminal 86 Grain Terminal Commission Briefing July 28, 2009 T-86 Grain Terminal 7-28-2009 Facility History Construction began in April 1968 Cargill lease commenced July 8, 1969 Terminal operational November 1970 Original cost of $14 million Assigned to Louis Dreyfus March 2000 2 Facility Overview - Receiving and Storing Commodities Handled Corn, Soybean, Sorghum Sourced mainly from upper Midwest Receiving By rail BNSF and UP Rail yard holds 240 loaded railcars, 150 empties Can offload 2,000 metric tons per hour Measuring Scales inbound and outbound Storing 68 silos, 39 interstices hold 4 m bushels 3 Facility Overview - Shipping Shipping From silos, or direct from railcars Silos Allow blending of different grades from different silos to meet exact specifications Direct Rail Loading reduces energy used, cost of handling, and reduces breakage of grain, preserving quality Two commodities can be loaded at the same time Can load a Panamax ship in 72 hours. Loading must shut down during rain 4 Lease Agreement Currently in 10th amendment Base Rent plus Volume Percentage 5-year option this November Considering lease amendment Extend term 10 years Facility Upgrades 5 Economic Impacts Port Revenues Are steady and significant T-86 diversifies our revenue base Enhances Port's credit ratings Jobs Good family wage jobs all year round 6 Key Issues Exercise 5-yr option vs. lease amendment extending term 10 years Aging facility components that require replacement/modernization Capital investment-partnership between Port and Lessee Perform upgrades while maintaining volumes and revenue to Port 7 Business Outlook Markets Served Asia, Middle East, Europe P-86 - Record volumes in recent years Current outlook strong through March 2010 PNW location is an advantage P-86 berth accommodates deep draft vessels Steady supply of grain and strong demand bode well for longer term New Grain terminal to be constructed in Longview Washington 8 Environmental Louis Dreyfus has initiated and maintained a consistent environmentally-responsible record of operation: Rail Locomotives on site now using biodiesel Direct loading from railcars saves energy Overwater systems converting from hydraulic to electric Dust Suppression Additional improvements planned Tenant shares interest with Port for sustainability 9 Summary 40 continuous years of good service Aging components Opportunities to improve competitiveness Environmental opportunities Continued Partnership 10 Next Steps Negotiations underway Report back in the Fall Questions? 11
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