A circuit court hearing on foreclosure proceedings against the Port of Port St. Joe by Capital City Bank was scheduled to be held Wednesday.

A circuit court hearing on foreclosure proceedings against the Port of Port St. Joe by Capital City Bank was scheduled to be held Wednesday.

The hearing was scheduled after this newspaper went to print (go to www.starfl.com for any updates) but Port Authority attorney Tom Gibson has indicated he would be surprised if Circuit Court Judge Shonna Gay Young makes an immediate decision on the competing motions for summary judgment.

With both sides seeking summary judgment, there are no legal facts in dispute, Gibson said.

The bank is seeking foreclosure on a mortgage of more than $4 million on land that the Port Authority transformed into a barge terminal bulkhead with uplands site.

The so-called Parcel B sits below the Tapper Bridge across the Intracoastal Waterway from the old Arizona Chemical site.

The Port Authority has not made payments on the principal for several years.

The Port Authority is countering with a motion for summary judgment based the contention that the Port Authority was prohibited by law from mortgaging public property in the first place without a public referendum.

The outcome could also impact the Board of County Commissioners pursuit of additional collateralization for a $199,000 loan made last year to the Port Authority.

There have been recent discussions with the bank about deeding the property to the bank while the bank would allow the port to proceed with its operations and providing a right of first refusal to the Port Authority should another prospective buyer emerge.

Gibson indicated those discussions have fizzled as the hearing approaches.

The Port Authority board has been disinclined to act on any proposal involving Parcel B or its collateralization until after the hearing.

While Parcel B is an important component to the port master planning area, port director Tommy Pitts noted that the focus for the port in developing for the future is the shipping channel and lands in port and St. Joe Company hands open for deepwater shipping.

The Port Authority and St. Joe Company entered into a collaborative agreement last year on development of the port.

With two Letters of Intent entered into by St. Joe with energy companies, the port stands to see more than 1 million metric tons of wood pellets shipped through the Port of Port St. Joe within two to five years.

But those LOIs are contingent on dredging the shipping channel to authorized depth.

Pitts said he, port officials and officials with St. Joe recently met with the staff of Congressman Steve Southerland (R-Panama City) and a legislative liaison from the U.S. Army Corps of Engineers to get a better understanding of the process of accomplishing the dredging.

The Corps will ultimately perform the dredging.

The Port Authority and St. Joe are exploring the quickest and most efficient path to the Corps and dredging, specifically securing funding and permitting.

“It was a lot of information we had already heard and there are still more questions,” Pitts said.

Pitts said it remained unclear if on the permitting side the Port Authority would need to undertake an Environmental Impact Statement or the less time-consuming and less expensive Environmental Assessment.

There was also a question about reauthorization given the last time the shipping channel was dredged – 1980 – and Pitts said the dredging would be more expensive because of the time lapse and volume of spoil material.

St. Joe has indicated a willingness to consider providing company-owned lands for spoil sites – an important hurdle – and it remains a potential that some dredged material be suitable for beach nourishment.

Pitts also noted that the two LOIs would meet the tonnage threshold requirements for the Corps to step in and dredge.

Another arrow in the port’s quiver is also that maintenance dredging, once done, would only need to be repeated every eight to 10 years as opposed to many ports that require such dredging on an annual or biannual basis, Pitts said.

“I am optimistic about getting certification,” said Port Authority board chairman Leonard Costin. “It is the same problem we have had. We have an ambitious objective of getting the dredging done in two years.”

The Port Authority board last week approved Hatch Mott McDonald as the engineering firm that will undertake the work required for permitting.

“We can not proceed with task specifics (in order to assess the costs) until we receive clarification on the direction we will go,” Pitts said.

Operational funds

Another Port Authority meeting was spent discussing the dire revenue situation for the port as the new fiscal year dawns at the end of September.

Come the new fiscal year, the Port of Port St. Joe will operate on a “bare-bones” budget with no funding for the port director position beyond the $1 per month Pitts is currently paid.

Further office presence would be from one contract employee working part-time.

Costin said the Port Authority would make it through the current fiscal year and he has looked at a variety of sources for funding to no avail.

“We need a break,” said board member Eugene Raffield. “We need a big bone sent to this county. It has not been for lack of effort.”

Costin proposed a public fundraising campaign – he was willing to pledge $500 from his business last week which he would encourage others to match – to provide operational dollars for the port in the short-term.

“We have to keep this going,” Costin said. “We can not stop it. This is the salvation for the community and the region.

“I am taking this as a serious challenge.”

Costin said he wanted to see community support, which might also serve as further ammunition as the Port Authority and St. Joe lobby for funding for dredging and improvements to the AN Railway.

Raffield suggested the board table the concept until after this week’s hearing and board member Johanna White said they should have a marketing plan in place for the effort.

“We need to be able to lay our cards on the table for the community,” Raffield said.

Board member Patrick Jones said the idea should be up for detailed discussion at the next Port Authority meeting.

 “We need to do everything we can,” Jones said.