In an abrupt about-face, Mayor Charlie Hales yesterday told the Port of Portland that he is dropping his support for a proposed $500 million propane terminal to be built by the Canadian company Pembina Pipeline Corporation.

That's a death sentence for the massive project, which Hales earlier championed. The Port's director, Bill Wyatt, says that Hales told him Wednesday that Hales' continued support for the project could hurt his chances of being re-elected mayor in 2016.

The Port and the city jointly announced the deal with great fanfare last September, saying the facility in the Rivergate industrial district would be "transformative," yielding 600 to 800 construction jobs, up to 40 permanent jobs and paying $3.3 million in property taxes a year. 

"This is great news," Hales said in a Sept. 2, 2014, statement. "We welcome this investment and these jobs in Portland. The city is committed to growing our economy on the land we already have, and holding industry to very high environmental and public safety standards. This proposal meets these goals."

Environmentalists and residents close to the railroad tracks that would bring propane-laden trains from Canada criticized the deal, raising concerns about safety and the export of a fossil fuel.

The proposed transaction went before the city's Planning and Sustainability Commission this year because it would require the construction of a short pipeline to transfer propane from trains to the terminal where it would be loaded on ships. Construction of that pipeline requires city approval.

The Planning and Sustainability Commission narrowly approved Pembina's application with conditions and the project was tentatively scheduled for a city council vote in June.


This story was updated at 1 p.m.

Hales' spokesman, Dana Haynes, denied in an interview with WW this morning that re-election concerns played a role in the mayor's decision.

Rather, Haynes says, Hales is taking a pragmatic approach in the face of overwhelming criticism of the project from people who believe the propane terminal could not meet Portland's environmental standards.

Here's a statement Hales released today, after WW broke the news of his reversal:

“From the beginning, I said Portland welcomes this investment because we are committed to growing our economy and holding industry to very high environmental and public safety standards. I have spoken to countless Portlanders. I’ve studied the testimony at the Planning and Sustainability Commission. I’ve discussed this with colleagues inside City Hall and in the business community. I do not believe Pembina has made the case as far as Portland’s environmental standards are concerned. And for that reason, I am asking Pembina to withdraw.”


Hales' office noted the "environmental standards" the mayor was talking about go beyond city code to include "the broader environmental and climate values firmly held by Portlanders."

Yet Wyatt, the Port director, went out of his way in a Wednesday night email to Port officials to note that Hales expressed worries about his re-election chances if the Pembina deal went through.

Wyatt's willingness to call out Hales may reflect the Port's frustration with the city nixing the second large proposed Port-engineered development in the past two years. In January 2014, the Port abandoned plans to develop a new shipping terminal on West Hayden Island after the city of Portland's Planning and Sustainability Commission attached conditions to approval of that project that the Port deemed unworkable.

Here's what Wyatt said in his email to Port officials last night:

"Mayor Hales called me this afternoon to let me know that he was withdrawing his support for the Pembina project.  He cited concerns about the level of opposition and how that might affect his reelection as the primary concern.

This is deeply disappointing obviously, particularly because Pembina insisted on meeting with the Mayor prior to their announcement back in January.  He could not have been more supportive, and said so on the front page of the paper, inducing Pembina to spend several million dollars doing the preliminary engineering and safety studies necessary to proceed."

In an interview with WW on Thursday, Wyatt stood by his characterization of his conversation with Hales. He also took issue with Hales' claim that the project would fail to meet environmental standards.

"If you look at what the mayor has said, it's hard not to draw the conclusion that he has deep political concern about the deal," Wyatt says. "The environmental concerns that are a matter of city policy have been addressed by the Planning and Sustainability Commission. So what are the other concerns? Maybe there are secret policies I haven't been informed about."