War at the Port! OHPA rejects city settlement and puts port operator on notice it's not doing its job

A settlement agreement between Fernandina Beach and the port has been rejected by OHPA

A tsunami of conflict is drowning the relationship between the operator of the Port of Fernandina and its governing body the Ocean Highway and Port Authority (OHPA) to the point that OHPA is issuing a notice of breach of contract.

The acrimony reached a boiling point during OHPA's May 14 meeting where Commissioner Miriam Hill told officials of Relay Terminals (formerly Savage) that "we don't see (from you) movement, traction, responsiveness, transparency...I think we need to take formal action to put your bosses on notice that this isn't acceptable. And this doesn't reflect on the product as an investment and good faith business relations and the benefit of Nassau County and the Port of Fernandina. If you all (Relay Terminals) are not indeed going to invest in the port and fulfill those operating obligations, we need to find a partner who will."

The two entities aren't talking to one another following that explosive two-hour OHPA meeting where authority commissioners broached a series of issues with Relay Terminals including:

• OHPA commissioners nixing a proposed settlement between the city of Fernandina Beach and the port over the placement of a massive fabric warehouse in the port that was not authorized by OHPA and violated city building procedures.

• Commissioners also charged that Relay Terminals will not provide them with revenue figures from tariffs the port charges in order for OHPA to pay the city $50,000 in Payment in Lieu of Taxes due this fall.

• Then there is the issue of damaged warehouse structures on 2nd Street that Vice Chairman Ray Nelson said are in such poor condition that it represents safety concerns for port employees working in the buildings.

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Revenue for the City

Discussion began on the tariff issue and the amount of revenue that will be generated in order to pay the city its $50,000. The port accountant has told commissioners that there won't be enough money by the fall to meet the obligation.

OHPA Chairman Justin Taylor said communication from the port operator had ceased regarding the PILOT issue.

OHPA Attorney Patrick Krechowski said he drafted a letter to the operator's attorney after emails were not being answered. Krechowski said he sent a registered letter, and two weeks had passed without any response.

"Obviously there's disagreement and we have this operating agreement (with Relay Terminals) so where do we go?" Taylor asked. "Yes, we have an operating agreement, but ultimately the question is who is in .control?... For us to go back and forth with everything and for it to be as contentious as it's been, it's unacceptable."

Hill took the discussion a step further.

Commissioner Hill

"We really try to be amicable because we don't want to create more drama at the port or have negative news at the port. We want business to improve and negative press is really bad. We don't need MIRAD (a federal agency) reading the Observer and laughing at Nassau County," Hill told officials of Relay Terminals. "When I walk around the port, the workers see the warehouse dilapidated...underneath the new warehouses, the pavement is buckling. Half the port floods, our rail spur, which is one of our most important assets, floods at high tide. Are we going to invest in the port? Are we in it for the long haul?"

Vice Chair Ray Nelson followed Hill and called the condition of the port facilities 'deplorable.'

"I don't understand why it's being run into the ground. As a board is it our responsibility to the taxpayers of this county. We should not allow this to happen. Every time we come into a meeting, we're told certain things are going to be executed.... we get lip service. It's time the lip service stops, and we start seeing some action or on our part we start taking some action," Nelson said.

Commission Scott Moore said numerous requests for information from Relay Terminals have been made since January.

"Time after time, after time we ask for something, it's doesn't come, it doesn't come," he said.

Hill successfully made a motion for Port Attorney Patrick Krechowski to issue a notice of breach of the operating agreement to Relay Terminals.

City settlement scuttled

Port Chair Taylor, Vice Chair Nelson and Commissioner Hill rejected a tentative agreement that would establish buffer zones between the facility's huge fabric storage tent and the adjacent historic residential neighborhood.

The proposed agreement, which required approval by the City Commission and OHPA, resulted from a mediation hearing in April at City Hall.

The 22,000 square-foot tent, used to store shipping containers, was constructed last August at an alternative location and without the required building permits from the city. The port operator also did not have OHPA authorization for the tent to be built at that location.

"The operator was on notice when it (the tent) was 20 percent up. You could have stopped...and said we need to put it in a new location," Hill said. "We (OHPA) didn't know about the setback issue until the permit process started.... I don't know why that process wasn't followed, but that's not OHPA's problem to fix."

The settlement proposed a 10-foot vegetative buffer between the rear/western boundary and the side/northern boundary of the blue house will be established to include four shade trees, four understory trees and a continuous, unbroken hedge, double staggered to form a solid visual screen.

Another buffer will be created on the wooded, undeveloped OHPA property next door at 516 N. Third St.

Hill said she couldn't approve the settlement that placed encumbrances on port property.

"It's not OHPA's obligation to fix that (the tent location)," she said.

Krechowski clarified that the establishment of buffers around the tent was proposed by the city and not the port operator. "The city rejected the operator's proposal," he said.

Nelson supported not approving the settlement provisions.

Taylor asked Relay Terminals for an amount it would cost to move the fabric tent to its original OHPA approved location.

Taylor advised Krechowski to inform the city that OHPA was looking at "other options" regarding the tent.