Port’s contract with Earl probably makes sense
July 30, 2010 · 9:16 AM
At first blush, the Port of Bremerton’s newly announced deal to lease 7,200 square feet of space in the Olympic View Industrial Park to Portsmouth, Va.-based Earl Industries looks like a winner for the region.
But the devil can be in the details.
In anticipation of being awarded a $250 million contract to perform maintenance work on the USS Nimitz when the carrier docks here beginning in December, Earl Industries has hinted the deal could bring as many as 60 jobs to the region — at least for the 16-month duration of its deal with the Navy.
And considering the space in question had already been vacated by Westech Aerosol Corp., which moved into smaller quarters, the addition of a new client appears to represent a net gain.
Still, it’s worth remembering the deal the port cut last fall to attract General Dynamics, Inc.
In that case, before the company would agree to locate in the very same industrial park, the port agreed to provide $90,000 worth of upgrades to the building it was leasing.
At an over-market lease rate of $7,648 a month, port officials say they’ll recoup that investment in six years. The problem is, General Dynamics only signed a three-year deal, which means there’s no guarantee the company will stay long enough to justify what the port paid to bring it here in the first place.
If the port offered similar inducements to its new tenant, the contract wouldn’t necessarily be the slam-dunk it appears to be.
On the bright side, it’s possible the presence of a world-class player in the marine construction industry such as General Dynamics played a role in luring Earl Industries to the park.
If so, the earlier arrangement with General Dynamics might prove to be worth the risk after all.
In any case, having a paying tenant in the park certainly beats vacant space and the lost revenues that go with it.
To that end, the deal is a winner.
By how large a margin remains to be seen.