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The controversial Zenith Energy fuel terminal along the Willamette River will soon have a new owner.
The Florida-based private equity company ISQ Springer Holdings plans to buy the fuel terminal from Zenith, the embattled owner of the 39-acre fuel terminal that’s long been a thorn in the side of progressive city councilors.
After months of limbo, that purchase now has a clear path forward thanks to the Portland City Council, which this week voted 7-6 to approve the transfer of the franchise agreement between Zenith and the city. That’s a requirement for any owner because one of the terminal’s pipelines runs underneath the city’s right of way.
The progressive wing of the City Council voted against the transfer of the franchise agreement, resulting in a 6-6 tie. Mayor Keith Wilson broke the deadlock, providing a 7-6 majority in favor of the transfer.
The vote did not come without drama.
When ISQ and Zenith first requested that the franchise be transferred in order to move forward a purchase deal earlier this year, members of the council’s left flank sought to put additional conditions on the franchise before its transfer. One such amendment—which would have added a provision to the franchise that allowed private citizens to sue the new owner if they believed there was a breach of the franchise agreement—died by a 6-6 vote, sparking snippy remarks between the council’s two caucuses.
Then, last week, council took what was supposed to be its final vote on the franchise transfer ordinance. It died by a 5-6 vote with one absence, because Councilor Loretta Smith, who’s in support of the transfer, arrived late to the vote. After an hour’s worth of debate about Robert’s Rules of Order and who could, and who could not, put forth a motion to redo the vote, the council punted a reconsideration motion to this week’s council meeting.
Five members of the progressive caucus voted against a reconsideration of the vote, seeking to maintain the prior week’s vote. But all six members of the moderate caucus plus Council President Jamie Dunphy, who usually votes in tandem with the progressive caucus, voted to redo the vote. The entire council knew that a reconsideration of the vote would likely mean that Mayor Wilson would break a 6-6 tie and vote in favor of the franchise transfer.
Dunphy explained his reasoning for reconsidering the vote before voting.
“I’m going to be blunt and to the point. I didn’t vote for the franchise transfer and I’m not going to,” Dunphy said. “I voted to reconsider last week because I hoped that there could be some negotiations to find mutually agreeable conditions to approve this transfer, and then get it approved and get Zenith out of this city.”
But, Dunphy explained, council reached no such agreement. He reasoned that should the transfer be denied, the city administration could bring the same transfer request back to council in a few months’ time—causing more heartache for the city with little meaningful change in the eventual outcome.
“There would be further delay, vastly greater financial and legal risk to the city, greater risk of the underlying transaction falling apart, and at the end, either a status quo with Zenith or an unconditioned transfer to [ISQ],” Dunphy said. “Same or worse outcome, more damage along the way.”
On the re-do vote, the progressive caucus members—including Dunphy—voted against the transfer. All six moderates voted for it. Wilson broke the tie, and as expected, voted to approve the franchise transfer.
ISQ’s purchase price for the terminal has not been publicly disclosed.
