The Sacramento-Yolo Port Commission in California has approved a new lease for its West Sacramento maritime facilities with SSA Pacific.
The lease, which takes effect July 1, 2013, replaces an existing Terminal Operations Management Agreement with SSA. The deal provides guaranteed rent payments to the Port of West Sacramento and shifts all maritime-related operational expenses to SSA, enabling the port to reduce administrative costs and focus on development of its real estate assets.
The lease will be for a minimum of five years and can be extended by five-year increments to a maximum of 20 years. Minimum annual rent payments to the port start at $650,000, and the lease provides for additional revenues to the port as shipping tonnage increases. As part of the agreement, the port is relieved of $850,000 in existing debt to SSA, and SSA agrees to purchase the port's existing air credits related to bulk cargo handling for $50,000.
“We're redefining and redesigning the port and this is a critical first step,” said Mike McGowan, chairman of the port commission, at the commission’s meeting on May 15.