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Port board: Letter too late



South Tangipahoa Parish Port Commission officials said they learned about the letter from the state transportation department regarding a proposed development at the port only after they met to consider the project.

The letter from Thomas Clark, commissioner of the Office of Multimodal Commerce under the Department of Transportation and Development, was sent to Port Director Patrick Dufresne Tuesday before the noon meeting, according to Clark. However, the letter was not read or discussed at the meeting.

Commission President Daryl Ferrara said Wednesday he heard about the letter after the lengthy meeting wrapped up.

Clark said he wrote the letter to provide some guidance as the commission considers the proposal to transform the 40-acre port site and 100 acres of private wetlands into a nature-based tourism and residential spot off North Pass. The department, which is over the state's ports, has been in contact with both the developers and the commission about the project, he said.

The Village at Port Manchac LLC had drafted a memorandum of understanding that would have given the developers 18 months to perform due diligence research on the site. If the research concluded the project was a go, it would have given the developers a lease option to lease property from the port.

At the meeting Tuesday, the commission rejected the draft agreement as written and instead voted to ask for an attorney general opinion on whether they have the authority to vote on such a project.

The port has been doing infrastructure improvements, funded in part by the state transportation department, to make it more marketable as a facility for transloading and storing cargo. There was a question from the port about whether the commission would have to pay back funds to the state.

The letter addresses that, saying if the commission were to sell or dispose of port-owned property that had been improved using DOTD Port Priority Program funds, Article 13 of the intergovernmental agreements between the state department and the port commission would require the port to reimburse the department. The letter stated that there is about $2.86 million that could potentially be reimbursed by the port.

However, this reimbursement clause does not apply if the port were to lease and remain the owner of the property that benefited from the program funds, Clark said.

Port Director Patrick Dufresne said he and the commission's consultant wanted to get clarification of items in the letter before discussing it openly, particularly regarding the program, which is why he did not discuss the letter at the port commission meeting Tuesday.

Meanwhile, a letter from a Canadian National Railway official was read aloud at the commission meeting. Jim Binder, director of business development for CN Railway, wrote the letter to express concerns about the proposal and to describe the importance of the port to the railway company's operations as a staging area, including for repairs to the rail. Dufresne said that letter was received Monday. He reviewed the letter and found the information in it factual, so it was shared, he said.

QUESTIONS ABOUT GRANTS -- He said the DOTD letter was prompted by questions about the reimbursement of grant funding. The port has $3 million in funding for various infrastructure upgrades, 90 percent of which came from the transportation department's program, he said.

Those improvements, which are almost completed, include road and drainage work, shoreline protection/bulkhead improvements, laydown storage and a small vessel dock that is used by different agencies. Dufresne gave an update on the improvements, which started about two and a half years ago, at the port commission meeting.

Clark said in the letter the Port Priority Program has contributed about $8.6 million since 1989 toward the infrastructure at the port with the intent of improving the regional economy at the request of the commission.

Besides providing information about the potential for reimbursement of funds, Clark had written that the department's legal department had looked into regulations and laws that govern the commission and found nothing that raised any concerns regarding the commission's authority to vote on the project.

He wrote the statute on the port's commission rights and powers grants the body "broad authority to own, construct, operate and maintain recreational facilities and all other property necessary or useful for port recreational and business purposes."

He encouraged the commission, developers and stakeholders to collectively collaborate and look at all efforts to achieve a "win-win scenario" that would benefit the port, parish and state. He wrote that the office is aware of other ports that have made revenue through diversification of port-owned properties for non-traditional purposes, including the Port of New Orleans. Clark said that port has a cruise ship terminal, for example.

REACTIONS TO LETTER -- Andre Coudrain, the attorney for the port commission, said he did not know of the letter until after the meeting. Regardless though, his recommendation to seek an attorney general opinion and to not sign the MOU as written would have remained the same.

He said the port commission should still get legal guidance from the attorney general about its ability to consider this project, weighing all the details of this development that would completely change the port from being industrial to being a tourism destination.

Coudrain said he is not aware of what all was known about the proposed development when DOTD provided guidance on the legal question and the grant funding reimbursement clause. Even with the letter, he still would recommend seeking an attorney general opinion and carefully reviewing the grant program requirements to be sure.

Commission President Daryl Ferrara said knowing about the letter would not have changed how he voted Tuesday to reject the memorandum of understanding and to seek the attorney general opinion. He still believes an attorney general's opinion is warranted to learn more about whether the development having residences would prevent the commission from considering the Village at Port Manchac.

Commissioner Ernie Drake said he learned of the letter after the meeting from Dufresne. Drake was against the agreement. He said the way it was written made it a bad deal for the port.

He has several legal concerns about the project, one of which was about whether the port would have to repay grant money. He said the letter appears to have answered that question, but there remains the main issue about the port's statutory power to vote on this kind of development. He also has concerns about whether there is any title issues from past land donations to the port and said the commission needs to research that.

Drake and Commissioner Don Boihem voted against seeking an attorney general opinion. Drake, a Ponchatoula attorney, said the opinion would not solve the legal questions as it would not be a binding call. To him, it seems clear the project does not fit in with what the mission of the port is supposed to be based on the statute. Instead, he suggested the developers work toward getting that statute amended to clearly allow for their vision.

"I don't think it's legally possible at this point," he said.