Honda, Port Ink New Long-Term Lease Deal

PORTLAND-With its present 15-year lease set to expire 11 months from now, American Honda Motor Co. has inked a new long-term lease deal with the Port of Portland for its auto processing facility. The automobile manufacturer signed a 10-year lease (not including three five-year options) that will start out generating almost $1.4 million per year for the port and then escalate every three years based on the Consumer Price Index.Honda’s Terminal 6 lease area includes approximately 61.3 acres of automobile storage and processing area, a small office and service building, and the preferential use of the floating dock at Berth 607 for use by their contracted ocean carriers. The dock presently handles about 45 vessels per year and it is anticipated that Honda will be importing approximately 120,000 units per year across the facility by 2006. In consideration of the new lease, the Port committed to undertake as much as $10 million in near-term capital improvements. At Berth 607, at a cost of $5.3 million, the Port will modify the dock to enable ships to more efficiently use their side and stern ramps for loading and unloading automobiles, and also will install three new mooring dolphins for better berthing of larger car carriers. In addition, because of potential facility access delays due to rail intermodal yard activities at T-6, the Port will construct an automobile overpass on or adjacent to the lease premises. Port officials say the overpass is an improvement that the port anticipated making anyway at some point, but now will be done much sooner because it will also help minimize potential interference with Honda’s auto operations. The estimated cost of the rail overpass will range between $2 million and $4 million, depending upon final design criteria. Over the course of the past 13 years, Honda has used the T-6 facility for importing over one million automobiles and exporting over 300,000 vehicles manufactured in their US assembly plants. Honda distributes to about 28 states from the T-6 facility, primarily by rail.