Feb 1, 2014 22:58 BR port approves lease option on 124 acres BR port approves lease option on 124 acres Signed lease could mean $2.6 million BY BILL LODGE| firstname.lastname@example.org Feb. 01, 2014 Comments A Houston company holds a six-month, $50,000 option to lease 124 acres of land from the Greater Baton Rouge Port Commission. Should the option result in a lease, commission records show, the port could receive more than $2.6 million in annual land rent and fees for the amount of petroleum and other bulk liquids pumped into tankers. Commissioners voted Thursday to accept the option payment from Steve Nathanson, president of BR Port Services LLC, of Houston. Nathanson described the firm as a terminal services company. The option agreement states its length can be extended for six months at an additional price of $75,000 to BR Port Services. “It’s a very good port project,” said Jay Hardman, the port’s executive director. “We’re excited about it.” If BR Port Services eventually leases the property, all option payments will be credited toward payment of the first year’s lease price, according to the agreement. The optioned land is at the Inland Rivers Marine Terminal at a point about 3,000 feet from the Mississippi River, Hardman noted. Petroleum products and other bulk liquids would be stored at the site, if Nathanson’s firm goes ahead with the project, according to the option agreement. Hardman said a pipeline would be built from the storage site to the Mississippi River, where petroleum products could be pumped into Aframax-class tankers that he said have a combined ship-and-cargo weight of about 110,000 tons. Such tankers usually are used for short to medium hauls. Aframax tankers are about 245 meters long, according to information on a Hofstra University website. Larger, long-haul tankers can range from 285 meters to 415 meters. If the option agreement with BR Port Services becomes a lease, the agreement calls for a 10-year term at $6,500 per acre per year. In addition, the company would pay the port 5.5 cents for each of the first 11 million barrels of petroleum or other bulk liquids powered through the pipeline each year. Each of the next 11 million barrels would cost 4.5 cents. The fee for each of the next 11 million barrels would be 3.5 cents. BR Port Services would pay the port 2.5 cents for each barrel in excess of 33 million pumped annually. All of the those fees, however, would be contingent on the port dock’s ability to handle Aframax-class tankers. Port officials say in the proposed lease they believe the dock “is substantially capable of handling Aframax-class vessels.” Under the lease proposal, BR Port Services would be financially responsible for “maintaining the dock in good working order.” The port commission would be responsible for maintaining water depth necessary for the tankers to maneuver safely. At the end of the 10-year lease, the proposed agreement shows, BR Port Services would hold an option for as many as four consecutive five-year extensions. In other business, port commissioners approved a 2014 budget that includes $6.46 million in anticipated operating revenue and $5.26 million in expected operating expenses. That budget includes $1.65 million for salaries and wages. That is an increase of $90,000 over last year’s employee pay total. Commissioners also agreed to accept more than $1.68 million in federal and state funding for security upgrades recommended by the Lower Mississippi River Port-Wide Strategic Security Council. Cortney White, the port’s director of engineering and security, said 90 percent of the money comes through the U.S. Coast Guard. The remaining 10 percent comes through the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness. “There is nothing out-of-pocket for the port,” White told commissioners. White added the state and federal grants include $1.14 million for a surveillance site; $416,447 for mobile communications tower equipment; and $127,000 for upgrades to the port’s command and control platform.