PALMER — The Mat-Su Borough Assembly voted unanimously to terminate two leases with NPI at Port Mackenzie that had been in place for over 15 years each. The termination of both leases comes with several conditions and permits the Mat-Su Borough to take ownership of much of the improvements and equipment NPI had on the property.
“I know it’s got a lot of history and a little pain involved,” said Borough Mayor Vern Halter.
Halter thanked James Wilson for his work on termination of the leases, who had previously worked as an Internal Auditor for the Borough. Attorney Nick Spiropolous updated the Borough on the conditions and potential payouts enacted by passage of the ordinance. An initial lease in 2001 leased an uplands area near Port Mackenzie to NPI and a 2003 dock lease with priority use rights for a loading facility were both terminated by the Assembly’s unanimous vote on Tuesday night. Spiropolous said that the termination came before the Assembly after years of discussions between the borough and NPI.
“I’m sure that everyone that’s worked on this has worked on it very hard, but I really object to giving these people any money at all,” sait Mitzi Van Asdlan during public comment.
Spiropolous noted that the ordinances passed by the Assembly in 2001 and 2003 required NPI to remove all improvements made to the area, but the agreement signed by NPI reverses that previous condition.
“The borough would take ownership of the conveyor, all the pertinences to the conveyor, the warehouse, the associated well and septic, the scale, the loading house, the hopper, basically the major improvements that NPI has and the parking pad and road improvements,” said Spiropolous.
The Borough will receive 100 percent of revenues until a sum of $722,000 in revenues are acquired from the Port wharfage and dockage fees, lease revenue or sale revenue from any of the lands or assets transferred by NPI. Following the acquisition of $722,000 by the Borough, the revenue would be split in half by the borough and NPI until NPI had received $722,000. The borough could make a lump sum payment to NPI for $722,000 at any time. The borough could buy out NPI for $3,950,000 over the next two years or $6,450,000 after that time period.
“The reason I throw in the minus $50,000 is that was a negotiation during environmental remediation that we obtained a credit to the offset.The number of $722,000 is the credits that NPI holds, minus the taxes owed, minus another $50,000. That’s how that number was calculated.”
After both the borough and NPI have received the $722,000 from Port revenues, the following 10 years will see revenues split 80 percent to the Borough and 20 percent to NPI.
“The only way funding happens is if and only if the Port starts to make money,” said Assemblywoman Stephanie Nowers. “There is a revenue sharing up to a limited amount so just to clarify, there is no money that is exchanging hands unless the Port is making money and that is to a limited amount.”
Assemblyman George McKee begrudgingly joined his other assembly members in voting for the ordinance, but was maligned that the borough had two opportunities to terminate the relationship without cost and failed to do so.
“This is not a bad deal given the fact that we were incompetent in dealing with them okay. So I’ll probably vote for it but it really hurts me to do it,” said McKee.