Port Gives A&M Deadline

Port revenues down $4.5 million
Texas A&M not only agreed to fees of 6% for a sale and 8% of any lease they develop. A&M can earn an additional 2% by getting a substantial signed contract for sale by July 31, 2010 and closing by Jan. 31, 2011. If they do not produce a substantial sale or lease by that date they will be terminated. In order to meet the "substantial" requirement, A&M must secure a deal with a minimum of a $5 million dollar downpayment.

Commissioner Francis Gandy wanted to deduct quarterly fees of $87,000 be deducted from any commission, that failed 5-2 with support from Commissioner Ken Berry. The second amendment to terminate the contract if A&M did not produce passed 4-3 with Port Chairman Mike Carrell and Commissioners Judy Hawley and Richard Borchard being on the losing side.

Commissioners Berry and Gandy led the fight to reduce the fees termed "outrageous" to the new levels and include performance deadlines. A&M originally wanted 10% of any sale and 25% of any lease. The final amended measure passed unanimously.

On other issues Commissioner Judy Hawley reviewed the annual comprehensive financial report. The report revealed that revenues were down 9% or $4.5 million over last year. Warfage fees were down $1.5 million with dredge disposal and decreased through transport making up the rest. There was also a $1.6 million increase in operating expenses for planning La Quinta container port and remediation of ground pollution on Harbor Island.

There was no help from port investments which went from $19 million down to $18 million and earned overall only .02%. That encouraged Francis Gandy to suggest breaking it up into FDIC covered amounts of $250,000 and buy Certificates of Deposit in banks would yield 1-2% and be just as safe as the current strategy which is limited by law to non-speculative investments.