Minutes of October 3, 2006 Regular Meeting
Expo Center Conference Room
5:30 P.M.

Present: Commissioners Sherry Bohn, Fred Duckwall, Don Hosford, Hoby Streich, and Kathy Watson; Attorney Jerry Jaques; from staff, Michael McElwee, Mike Doke, Linda Hull, Linda Shames, and Laurie Borton. Work Session guest Bob Naito.

Absent: None

Media: None

President Sherry Bohn called the meeting to order at 5:00 p.m. and immediately called the Commission into Executive Session under ORS 192.660(2)(e), Real Property. At 5:30 p.m. the public was notified that Executive Session would continue for approximately five minutes.

Upon conclusion of Executive Session, the Commission was called into the Work Session at 5:40 p.m. No action was taken as a result of Executive Session. President Bohn called the waterfront development Work Session to order at 5:40 p.m.

Executive Director Michael McElwee introduced Bob Naito, who had been invited to the Work Session to inform the Commission on the redevelopment of the Nichols Boat Basin property. Naito stated that he is very excited about the project and that Tom Kennedy, of Kennedy & Mohn, P.S., a company providing hotel consulting, appraisal, and brokerage services had been hired. A boutique hotel with not more than 80 rooms is the focus of the first phase of development and Naito commented that a selection on the hotel operator was expected to be made by the end of October. The permit process for the environmental cleanup is being handled by Bob Nichols; the cleanup, most of which is upland and can commence no sooner than November 15, should be completed within a two to three week period. Naito commented that a 30- to 50-slip marina accommodating vessels up to 60 feet in length was included in the conceptual plan; however, a future partnership with the Port may be necessary since the depth is too shallow within the boundaries of the privately owned boat basin. Naito also reported that he is continuing to work with the U.S. Army Corps of Engineers regarding the flowage easement, which prohibits structures for human habitation below the 80-foot level, because this deduction combined with sewage and other easements gives him just 2-1/4 buildable acres. McElwee then opened the work session for questions from the Commission, first asking Naito to comment on the hotel occupancy projections. Naito forecast 100% occupancy during the summer months, and a high rate for winter if the snow is good, and consideration is being given to meeting space for mid-week and shoulder season occupancy. Naito commented the site qualifies for a "new market tax credit" and that hotels are considered a good investment because of the employment opportunities. President Bohn asked how the proposed frontage road would impact their development? Naito stated that a 3-star hotel was factored into Kennedy's study with a frontage road included; if the road was not built, the study indicated a boutique hotel would be a better choice. Bohn also asked Naito if he thought there would be a user conflict involving the entrance to a basin marina with cruise ship, windsurfing, and kiteboarding congestion. Naito commented that while he was not sure, he didn't see access being a problem. There were no further questions and Naito, who stayed for the remainder of the work session discussion, was thanked for his presentation.

Executive Director McElwee then led a discussion on a draft waterfront development strategy in which he emphasized the need for a collaborative process involving City and public input; preparing a conceptual versus detailed master plan based on market opportunities and key public objectives with Port financial objectives clarified as well as public objectives defined; and defining technical issues, such as identifying parcels within tax lots, or helping with the solution to the sewer plant odor problem, for example. McElwee's strategy also included a task schedule with projected timeframes, and fee estimates for potential consultants. The Commission was advised their input would be required in order to evaluate a potential modification to the current industrial zone, which McElwee feels is too restrictive as written, or application of alternative zones. The Commission generally agreed the Port might be more successful if a clear and concise conceptual plan that links consistencies and compatibilities to the Nichol's zone is presented to the City. President Bohn did comment, however, that the Downtown Business Association is highly concerned with future commercial competition at the waterfront. McElwee received consensus from the Commission that he was on the right track and that strategy discussions would continue at the October 24 fall planning session.
President Bohn ended the Work Session at 6:34 p.m. and called for a short break before proceeding into the Regular Meeting.
1. CALL TO ORDER: President Bohn called the regular meeting to order at 6:38 p.m.
a) Modifications, Additions to Agenda by Staff: Finance Manager Linda Shames requested that approval for the Toll Plaza Project-Construction Management be added to the agenda as an Action Item. Attorney Jerry Jaques requested the Commission be called into Executive Session under ORS 192.660(2)(e) Real Property and ORS 192.660(2)(h) Litigation at the conclusion of Regular Session.

2. PUBLIC COMMENT: None.

3. APPROVAL OF MINUTES:
Motion: Move to approve the September 5, 2006 (regular session) and the September 19, 2006 (special session) meeting minutes.
Move: Watson
Second: Duckwall
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

4. COMMISSIONER, COMMITTEE REPORTS: Commissioner Hoby Streich reported on the League of Oregon Cities meeting in Portland that he had attended; Commissioner Don Hosford reported on the meeting he had arranged for Executive Director McElwee and Pacific Northwest Waterways Executive Director Glenn Vanselow and Government Relations Director Kristin Meira; and that he had also scheduled a meeting between McElwee and Congressman Greg Walden.
5. DIRECTOR'S REPORT: In addition to the written report submitted to the Commissioners Executive Director McElwee also noted that Mike Doke, Marketing Director, would be working with Hood River Valley High School intern Elliott Daggett; that staff intended to pursue modification of invoices submitted by the Oregon Department of Environmental Quality for work at the airport dating back to 2004; and that he would be out of the office October 11-13 attending the Pacific Northwest Waterways Association annual meeting in Tacoma.
6. ACTION ITEMS:
a. Approve Toll Plaza Project-Construction Management Contract (agenda addition): Linda Shames, Finance Manager, reported that approval would allow HNTB to provide the Port with an on-site manager to oversee the project construction and monitor the progress of the toll plaza project. The contract is Supplemental Agreement No. 1 to the Agreement for Engineering Services between the Port and HNTB Corporation dated December 27, 2005.
Motion: Move to approve Supplemental Agreement No. 1 to the Agreement for Engineering Services with HNTB Corporation for the Toll Plaza Project-Construction Management in a not-to-exceed amount of $273,500.24.
Move: Duckwall
Second: Hosford
Vote: Aye: Bohn, Duckwall, Hosford, Streich, and Watson
MOTION CARRIED

Shames commented that Wildish Paving was anxious to start work on the Toll Plaza Project, which was expected to begin before the end of the month. Shames also informed the Commissioners that bridge users calling with complaints are being offered to take part in the pilot project of transponder users and that most callers are happy to participate.
7. COMMISSION CALL AND ANNOUNCEMENTS: Commissioner Watson passed along the compliments she had received to Executive Assistant Linda Hull on Hull's working relationship with this year's instruction concessionaires. Commissioner Hosford reported he had visited with Terry Bryant who is proposing to develop an air museum. President Bohn stated she was happy that McElwee was on board and that her staff had been complaining she was now spending too much time at work.
8. EXECUTIVE SESSION (continued): President Bohn recessed Regular Session at 6:50 p.m. and called the Commission into Executive Session under ORS 192.660(2)(e) Real Property and ORS 192.660(2)(h) Litigation. Upon conclusion of Executive Session, the Commission was called into Regular Session at 7:03 p.m. No action was taken as a result of Executive Session.

9. ADJOURN: President Bohn adjourned the meeting at 7:03 p.m.

---

Minutes of October 24, 2006 Port of Hood River Commission
Strategic Planning Special Meeting
Expo Center Conference Room 9:00 A.M. - 1:00 P.M.

Present: Commissioners Sherry Bohn, Don Hosford, Fred Duckwall, Hoby Streich (arrived 9:30 a.m.) and Kathy Watson; Attorney Jerry Jaques; from staff, Michael McElwee, Mike Doke, Linda Shames (arrived 10:15 a.m.) and Linda Hull; (Linda Maddox, public)

Media: Sue Ryan, Hood River News

1) Introduction, Objectives: President Sherry Bohn called the Special Meeting to order at 9:05 a.m. for the purpose of discussing strategic planning issues for the Port of Hood River. Bohn noted this was an opportunity to come together for Executive Director Michael McElwee's first planning session so it will be in a different format from other strategic planning meetings.

McElwee informed the Commission that he would recommend focusing discussion on long-term big picture issues facing the Port. Because Finance Manager, Linda Shames, would be late arriving, it was agreed to proceed to the Strategic Planning discussion issues first.

2) Strategic Planning - Discussion Issues:

· Strategic Plan Modifications - Update or approach: McElwee asked the Commission how they viewed the document and how it is utilized. Commissioner Watson felt it was important to have as a guiding document. There are good things in it but it might miss some bigger issues that could be incorporated. McElwee said this version combines broad issues and specific work plan items; outdated ones should be modified. Bohn thought the document has 'good bone structure'. Watson felt that anyone in the community should be able to understand where we are going and that is missing from the document. Commissioner Hosford agreed there was limited vision in the Plan. Commissioner Duckwall said the Port cannot justify the Return on Investment (ROI) targets set and felt that its main objective should be job creation. Watson felt the Mission Statement was clear. McElwee thought a summation of the Strategic Plan that is communicable would be more helpful and that the Work Plan items could be removed into a separate document.

· Core Financial Objectives - Public benefit v. financial return: McElwee said the objectives are hard to translate into public policy as Return on Investments (ROI). He thinks the Port should be mindful of its ROI; however, taking the waterfront as an example, the Port builds infrastructure similar to a city (streets, amenities, etc.) but has no tax base like a city. Duckwall stated the policy should override the return objectives recognizing the investment is a catalyst, sort of like a loss leader. Watson stated you have to risk capital to gain achievement of your public policy objectives and that the Commission needs to agree on risk capacity to achieve these objectives. Bohn asked if this emphasis is shifted in the Strategic Plan, then are goals removed or changed? McElwee stated he has no clear recommendation at this time. It depends upon how the cost centers are approached, separately or as an aggregate. The Marina and the Marina Park are examples of including non-revenue assets with revenue-producing ones. If you include streets and other infrastructure you need to develop, you can achieve your job quality and density but not meet your minimum return requirements.

Watson stated each asset could be indexed into three factors, both concrete and subjective: 1) financial/ROI; 2) quality of life; and 3) job potential. McElwee thought that approach would provide some flexibility; he stated that the breadth of assets that the Port owns and manages is remarkable. He also said quality jobs, not just jobs are critical and you can calculate a per square foot salary figure. Duckwall said the risk capacity is a moving target dependent upon the individual project proposed. McElwee asked that as the Commission looks ahead, should we focus on public policy objectives (job density, good salaries, etc.) and consider ROI losses to achieve them? Commissioner Streich thought it should be a case-by-case basis. The Commission agreed that a loss of ROI may be acceptable in exchange for job creation goals. Bohn stated it was not just jobs, but livability factors as well.

Bridge revenue replacement emphasis: The Budget Committee's continual emphasis on looking at long-term revenue sources requires a look at alternatives for investments and facilities that we currently have. McElwee will bring back to the Commission an analysis on facilities, including a lease/sales income approach. Duckwall stated replacing the bridge revenue was unlikely, that's it is just not possible given our current assets and with no tax base. Watson would like the Port to tell the public where its $.75 goes so they can learn how the Port's recreation properties are funded. McElwee pointed out that the Marina basin was planned so that development would maintain the park. The Hook, Spit, and Event Site are limited to user fees for maintenance except for their bridge revenue support. McElwee will look at tracking assets in aggregate areas to maximize revenue to cover expenses. Bohn felt the more transparent we become in reporting, the better.

McElwee stated the HNTB bridge replacement study was completed in draft form. The Commission asked that a copy of the study be forwarded to them. McElwee said it would not be possible to replace the bridge without federal assistance. Bohn said we need to maintain the current bridge as long as possible and promote the two states in its replacement goals. Streich and Duckwall felt the 20-year timeframe should be kept but it will probably be a rolling date. McElwee said an engineering firm contacted him about the EIS (Environmental Impact Study) that is being done for the Regional Transportation Council. Mike Doke said the draft is done and that the Port of Hood River supports the final EIS being completed. Doke will find out the status of that study. Consensus was to have further discussion on the bridge replacement issue once the Commission has reviewed the report.

· Waterfront Development - Hold v. sell strategy: McElwee said the Hovee report advised flexibility as some businesses prefer to own. Watson said the Port of Portland always leased, except changed that policy for certain land this year. McElwee will come back to the Commission with a decision tree for certain properties. Streich believes a lease results in cash flow. Bohn stated to market the waterfront we need a clear vision, that there's no ability to do that now and every property is a case-by-case situation. Bohn stated we need to know about partitions, subdivisions, parcels, etc., and that it was always the consensus to own the outer lots along the waterfront, but inner lots could be sold. McElwee said it depends on what you want to achieve and what the financing strategies might be, that standards need to be established to be proactive and to know what is available. Doke reminded the Commission of the Hovee study's finding that the land will fill in quickly. Duckwall asked for job density to be considered.

Zoning - potential changes: Attorney Jerry Jaques told the Commission the restrictive light industrial zoning ordinance needs revisions and that staff needs to work with the city on these changes to incorporate technological/informational companies into the zone. Watson felt the city would be receptive to mixed uses on the waterfront as long as there was no housing. McElwee said mixing the zones on the waterfront would be unique as it combines light industrial with public recreational access. Jaques felt that staff can work with city planning staff to assist in the changes that would also benefit the Wasco Business Park. Financial participation in sewer plant: McElwee said the city's fixes are not working and that it's unlikely that federal money will be available to assist them. Watson said although it is not the Port's responsibility to repair the facility, it affects the Port's ability to market the property. McElwee stated it is a sustainability issue as well. Bob Francis, City Manager, said a bubble over the top would cost approximately $750,000. McElwee said Jeffrey Tashman met with the city on this and that light industrial does not create much for financing projects; mixed uses could create three times as much. The Enterprise Zone designation also negatively impacts the area because of tax abatement. Options for architectural lead role: McElwee asked the Commission if Yost Grube Hall, the firm that developed the Diamond Industrial Complex, should be someone the Port should work with for the waterfront development. The Commission felt they didn't really have any expertise on firms and that this was not a policy decision. McElwee had their support to make this administrative decision. Urban v. industrial overall vision: McElwee explained the urban vision is closer to the street and more pedestrian friendly. Naito's development in the boat basin may set a standard for development at the Nichols Boat Basin. The Commission asked McElwee to come back with a better description of this difference and where the Port should be heading. McElwee said Hood River is land poor for everything and that the waterfront is a finite resource. It makes sense to have a denser urban model for jobs and corporate headquarters. The renewable energy and sustainable designs are smart ways to save costs and utilize power resources. The sewer plant may have some possibilities for that and McElwee recommends the Port have David Evans and Associates study the feasibility of sustainable infrastructure. Duckwall said the Port needs to react to the expansion needs of our current employers and time is a factor; zoning modifications need to be a priority.

· Future of Airport-Improve, Enhance or Status Quo: McElwee asked if the airport can be better and more active. He thought the Brandt air museum was a positive project for the area. Watson asked if the airport priority should be air services or land development? McElwee thought it should be both. Streich said The Dalles is a regional airport and that geography is a problem in Hood River because of Fir Mountain. McElwee was asked to bring back ideas for the role of the airport and to explore a vision for it. The Windmaster sewer issue was discussed. Doke said while the project can accommodate future capacity. Doke will find out the funding strategies for the project. Duckwall asked about FAA constraints and Doke said the Airport Development Zone is all air-related business, but the county is open to change. The runway protection zone is in the airport master plan and changes would need community support for potential development. Doke said the runway is a separate issue from light industrial development zoning. McElwee informed the Commission that in analyzing the role of the Port's FBO (Fixed Base Operator) who does repairs and flight instruction, he believes the Port should evaluate alternatives for the airport business model. He felt the Strategic Plan was very passive in this area and would like to see more strategies to create additional opportunities. Staff will pull the Airport Advisory Committee together to work on this.

Watson stated she thought all the assets (Airport, Wasco, John Weber, Waterfront) should support each other and be part of a larger plan. McElwee asked how the Commission can connect to all people in the Port District and how it can be more relevant to agricultural interests as an economic base of the District. Watson said the wine industry is growing and that the Port could assist in a viticulture center. McElwee thought awareness and education as well as technical assistance or grant support might be considered. Staff was asked to do some more research on this subject. Duckwall said it must be sustainable and on land that is reasonable.

· Affordable Housing Challenges-Port Participation: McElwee believed the Port's focus should be on wages and jobs. Watson brought up the Community Land Trust idea where it owns the land, not the house owner, and keeps it affordable. Bohn felt affordable housing is an important factor for new companies coming to the area.

· Port's Role in Economic Development: McElwee stated that he, Mike Doke, and Bill Fashing, the county's economic development director, are working together to analyze the overlap in the many organizations in the region doing economic development with the goal to provide clarity in business recruitment.

· Real Estate Brokerage Assistance: McElwee told the Commission he believes the Port needs an industrial broker consultant who is familiar with local zoning, partitioning, etc., and in marketing for business recruitment. The Commission concurred.

· Future of Marina: McElwee asked the Commission about expanding the dock space due to the slip shortage. Commission asked staff to proceed with a new slip for next budget term. McElwee said he is unsure what the Marina Plan entails and is looking for direction. Bohn said it includes the basin, land, buildings and park east of the Hood River. The long-range plan was to develop along the basin to support the green spaces. Staff will evaluate the long-range planning for the Marina in the Strategic Plan to incorporate the Frontage Road feasibility, if needed. Watson asked if the beach area could be improved at some time because of its many uses by so many people. Bohn asked if the overflow dock could be improved, especially if the commercial dock is redeveloped.

· Property Acquisition Efforts: After meeting with Bill Fashing's industrial lands group, McElwee informed the Commission that many of the available light industrial lands are wetlands. There may a role for the Port to take the lead on, however, to assist in wetlands banking and mitigation by contributing to another area. Watson thought this might be a good opportunity to assist the farmers to benefit agriculture. McElwee will look into this further and report back to the Commission.

3) Asset Performance Review & Summary: Linda Shames informed the Commission that there are no dramatic changes in the performance of the Port's assets since last year. The UTS Portsite Building has an HVAC system that is cost-prohibitive to replace and the odor from the treatment plant limits leasing the space. Duckwall stated it should be demolished and the tenants relocated. Shames said the additional dock in the Marina could be moved up in the 5-year capital plan. Land for hangar additions at the Airport is not identified on the Airport Layout Plan and the Port would have to acquire property for them. If the college continues its presence at the Big 7 Building, a parking structure project is still a possibility. The 2nd Street landscaping project will begin soon. Bohn asked about a new building to replace UTS Portsite. It is in the 5-year capital plan. It would also benefit from light industrial zoning modifications. Doke told the Commission the first floor of the new Wasco Building is hard to lease because the companies interested do not fit the current zone and light industrial businesses cannot afford the higher lease rates. Doke also said there is interest in the Kearney Western Power Building to lease.

4) Staff - Project Updates: McElwee presented a draft of the Communications Work Plan that Paige Rouse proposed for the Port. There are four parts to the plan: Community Outreach, News Media Activities, Publications, and Electronic Communications. Consensus was the Plan looked good and fit well with the Strategic Plan.

5) Other: Bridge construction update: The first night closure took place without problems and two emergency crossings were accommodated. The contractor will work with people in special emergency circumstances. Commission discussed the need for more communication, education, and outreach about the project itself. Staff will create a 'talking points' document for the Commissioners to use. Staff will also create a FAQs (Frequently Asked Questions) page for the website. McElwee said he is impressed with contractor Wildish and commended Shames on a great job of oversight on the project. McElwee will talk with both city and state police regarding the traffic control needed during backups at the off-ramps and the 4-way stop during the construction period.

Streich asked about marketing of Port properties. McElwee said the industrial broker would know what is available. Doke said the Port's request for interest (RFI) to local companies interested in locating on the waterfront can assist in identifying the potential needs.

McElwee informed the Commission that the Expo Center analysis is progressing and he will submit a report to them before the December 5 meeting. There will be three stakeholder meetings in October and one public forum is planned for November 9 to gather input. Chuck Bugge will submit a summary report on this input. Other reports consist of structural and architectural analysis, economic analysis, and an adaptive reuse study that will identify any constraints and limitations.

Bohn asked McElwee about meeting with the city and county to discuss the coalition's federal lobbying issues and efforts in preparation for the spring trip to Washington D.C.

Shames informed the Commission that the Frontage Road study is progressing and the right-of-way issues are under discussion with ODOT with regards to both this project and the Exit 64 overpass work to avoid duplication of work.

McElwee asked the Commission if they need more communication with him. Consensus was they are happy with his communications to date. Watson said the Work Plan he has developed is very helpful.

6) Adjourn. Meeting was adjourned at 1:00 P.M.