Business Pensacola

Offshore Inland cannot make balloon payment

October 4, 2017

On Aug. 31, Crystal Yasurk, vice president of finance and administration for OffShore Inland, sent Port of Pensacola Director Amy Miller a letter notifying the City of Pensacola that her company could not make the final balloon payment required under its lease at the Port. See Letter from Offshore Inland.

The balloon payment was $199,200. Offshore Inland instead paid $15,000 and asked Miller for an extension that would pay off the balance in monthly increments of $10,000. The issue is on the council’s agenda for next week. See Amendment.

The item was on the September council agenda but was not discussed during agenda review. City Administrator Eric Olson, who was hand delivered a copy of the letter, gave an update on the Pensacola International Airport at the Sept. 11 Agenda Review but ignored the lease issue at the Port of Pensacola during his report to the council.

City CFO Dick Barker also did not mention the default in his monthly financial report to the Pensacola City Council – See August 2017 Monthly Financial Report Presentation.

The item was later pulled off the agenda before the regular meeting took place on Sept. 14.

Last year, Miller appeared before the City Council to discuss a partial deferral of rent on Warehouse #9 and the ground lease premises for Offshore Inland. She said that the rent deferral gives the City of Pensacola another nine months to see if the offshore industry turns around.

The offshore industry hasn’t bounced back.

The amended lease comes at the same time Mayor Hayward is recommending the Pensacola City Council and Escambia Board of County Commissioners approve his request that Triumph Gulf Coast give the city $14 million to restore Berth 6 at the port.

In support of his request, the Hayward administration wrote, “At maximum capacity, a restored Berth 6 could support an additional 365 vessel dockage days, worth $11 million to $18 million in additional economic impact EACH YEAR (their emphasis) over the 40+-year life of the asset. One dockage day = 1 ship in port for 1 day. Overall, from 2014 to 2015, dockage days grew by 28%, reaffirming the fact that Port Pensacola is on an upward trajectory and illustrating the importance of available infrastructure to continue to increase Port activity.”

Maybe the mayor should update his report with 2016 and 2017 data. That “upward trajectory” no longer exists. See Berth 6 request.

Mayor Hayward has to get his staff to spend more time on these Triumph Gulf Coast requests. Cutting and pasting from the RESTORE request list doesn’t work. This is too important for our area to waste the time of the Triumph Gulf Coast board.

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