Oregon lawmakers are holding off on spending $5 million on operations at the Port of Portland’s container terminal, citing wildfire costs and uncertainties about the investment.

The Legislature’s Joint Emergency Board had planned to vote on the $5 million request on Wednesday but has pushed back the decision until it meets in early December.

While the delay was officially motivated by the need to preserve funds for fighting wildfires and other unexpected expenses, some lawmakers also expressed skepticism about the long-term prospects of container shipping at the port’s Terminal 6.

‘Grave reservations’

“I have grave reservations about this,” said Rep. Paul Evans, D-Monmouth. “There’s no doubt we need container operations. I happen to think for the future that should be on the coast, not 110 miles up a river that’s going to get harder and harder to actually navigate.”

Unlike in many debates among Oregon lawmakers, opinions about the $5 million for Terminal 6 container operations were not split along party lines. During recent legislative hearings, support for the funding tended to be as bipartisan as doubts about the proposal.

While agricultural exporters and others have a critical need for Terminal 6, lawmakers must be clear-eyed about the viability of plans to reverse the facility’s financial losses, said Sen. Lynn Findley, R-Vale.

“As reminded to me on other issues, if we’re continuing to pour money down a rat hole, maybe we need to stop,” Findley said.

$40 million plan

The $5 million request before the Joint Emergency Board is part of a broader $40 million investment supported by Gov. Tina Kotek, who pledged the funding earlier this year to ward off a pending closure of the container business.

As part of that overall investment, she’s also vowed to seek $15 million for river dredging and $20 million for capital improvements to support the container terminal during the 2025 legislative session.

Kotek recently said the port “makes a strong case” for returning Terminal 6 to profitability in a business plan, but some lawmakers weren’t as complimentary of the report.

“Every time I read it, I have more questions, not less,” said Evans, who also questioned the port’s past leadership of the container terminal. He noted that ocean carriers ceased serving the facility for years after a breakdown in labor negotiations nearly a decade ago.

“Trust is earned and right now it is not there,” he said.

Rep. David Gomberg, D-Otis, also worried that it’s awkward to vote on the $5 million to sustain the terminal’s operations separately from the $35 million needed for longer-term improvements. He asked why the entire $40 million request shouldn’t be decided next year.

“If we make the commitment now, we may be committing the full body to follow up on that ask,” Gomberg said.

According to the port’s business plan, the container business can become self-sustaining if another third-party operator is recruited to run the terminal and container volume doubles in coming years. Ocean carriers must also stick with the facility despite their growing reliance on larger ships that can’t travel that far upriver, he said.

“That’s a lot of ‘ifs’ for $40 million,” Gomberg said.

Container business debated

Supporters of the funding request countered that doubling business volume is realistic once ocean carriers begin using the facility to serve additional destinations in Asia. They argued Terminal 6’s container business is the “connective tissue” between Portland jobs and businesses throughout Oregon, but it’s suffering from uncertainty about its future.

Lawmakers need to send a signal that they will support the facility and take its financial predicament seriously as an emergency, said Rep. Greg Smith, R-Heppner.

“I want to do everything we possibly can to support our ports,” he said.

Earlier this year, during the 2024 legislative session, the port asked lawmakers for $8 million to help keep the container facility running. Lawmakers said they’d consider such funding in the future but did not grant the request, preceding the port’s announcement it would halt the container business. The outcry from agricultural exporters and others prompted Kotek to announce her support for the $40 million investment.

The facility is directly responsible for nearly 700 jobs, indirectly supports 1,500 workers and contributes $20 million in annual tax revenues, said Keith Leavitt, a consultant advocating for the proposal who previously worked for the port.

“If we shut down tomorrow, those benefits go away,” he said.

Hiring a third-party operator to manage the container terminal is crucial to the port’s plans, but negotiations with an undisclosed company have been hampered by deferred maintenance costs for the facility, Leavitt said.

“It just makes it much more difficult to get a deal,” he said. “But for capital funding in the future, we believe we would have a deal already.”

Coos Bay proposal

Some lawmakers weighed state funding for Terminal 6 against a proposed expansion of the Port of Coos Bay along the coast, raising questions about whether the latter project would be a better investment given its lack of river navigation constraints.

“Should we really be spending this money in Portland or should we be spending the vast majority of it in Coos Bay?” asked Sen. Fred Girod, R-Stayton.

Leavitt responded that the projects are not mutually exclusive, as Coos Bay would rely on federal funding to strengthen inbound shipments to the Midwest, while the container business in Portland serves a niche import market but is largely geared toward agricultural exports.

“Both of those concepts actually live quite well together,” he said.

Though it’s understandable that lawmakers must do their due diligence on the $5 million request, it’s necessary to send the message that Terminal 6’s container business will remain functional in the long term, Leavitt said.

“The market needs certainty from the Port of Portland,” he said.