Special Meeting - 7662- November 17, 2014
Minutes of the Special Meeting of the Board of Commissioners of the Lake Charles Harbor and Terminal District held at 5:00 P.M., Monday, November 17, 2014 in the Board Room of the Port of Lake Charles located at 751 Bayou Pines, Suite A, Lake Charles, Louisiana.
In attendance and constituting a quorum, were:
Elcie J. Guillory, President
Barbara M. McManus, Vice President
Daryl V. Burckel, Secretary/Treasurer
Michael G. Eason, Commissioner
Dudley R. Dixon, Assistant Secretary/Treasurer
Walter M. Sanchez, Commissioner
Absent:
John L. LeBlanc, Commissioner
Also Present:
Bill Rase, Executive Director
Mike Dees, General Counsel
Louis Colletta, Assistant General Counsel
Richert Self, Director of Administration and Finance
Todd Henderson, Director of Operations
Donald Brinkman, Director of Engineering, Maintenance and Development
Dan Loughney, Director of Marketing and Trade Development
Michelle Bolen, Executive Administrative Assistant
Mr. Guillory called the meeting to order at 5:00 P.M. and asked Dr. Burckel to give the invocation. Ms. McManus led the Board and audience in the Pledge of Allegiance.
Mr. Guillory made a statement reminding the Public of the Port’s procedure for the Public to address an agenda item to the Board.
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1. Approval of the October 27, 2014 Regular Meeting Minutes.
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Dr. Burckel offered a motion to approve the October 27, 2014 Regular Meeting Minutes. Mr. Eason seconded the motion and it carried unanimously.
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2. SASOL Presentation – U.S. Megaproject Property Acquisition Request.
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Mr. Guillory asked Mr. Dees to give his presentation on the SASOL project.
Mr. Dees gave his presentation and a copy is attached with the minutes. Mr. Dees asked Mr. Matt Mize, with Robichaux law firm, to render an opinion on whether the Port has the right to expropriate property. Mr. Mize stated that the Port does have a legal right to expropriate property.
Mr. Dees asked Mr. Greg Anding, Counsel for SASOL, for his opinion. Mr. Anding also stated he reviewed the statutes and concurs with the findings of Mr. Mize.
Mr. Dees called Mr. Mike Hays, SASOL, to give his presentation.
Mr. Hays began with a presentation on the U.S. Mega Project Property Acquisition.
Next to present was Dr. James Richardson, Alumni Professor of Economics at Louisiana State University. He continued with an economic impact study.
Mr. Glenn McCall, Engineering Operations Leader for Fenstermaker, spoke next on the Heavy Haul Route Sasol will construct for the expansion.
Mr. Eric Flemming, Offsite Infrastructure Project Manager with Sasol, then spoke concerning the Heavy Haul Route and alternatives and the selection of the project site location and alternatives.
Mr. Dave Brown, Manager of Safety and Health for Sasol, spoke next concerning the security concerns with the current site in addition to the future expansion.
A copy of the presentation is attached with the minutes.
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3. Submission 2014 – 052 authorizing a Term Sheet and an Option to Lease Real Estate Agreement with Venture Global LNG, Inc.
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Mr. Eason offered a motion to adopt Resolution 2014 – 052 to authorize a Term Sheet and an Option to Lease Real Estate Agreement with Venture Global LNG, Inc. Ms. McManus seconded the motion and it carried unanimously.
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4. Submission 2014 – 053 approving a Memorandum of Understanding with the Panama Canal Authority.
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Ms. McManus offered a motion to adopt Resolution 2014 – 053 to approve a Memorandum of Understanding with the Panama Canal Authority. Dr. Burckel seconded the motion and it carried unanimously.
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5. Submission 2014 – 054 authorizing a Cooperative Endeavor Agreement among the Lake Charles Harbor and Terminal District, SASOL Chemicals (USA) LLC and the State of Louisiana through the Department of Transportation and Development relating to that project designated “Port of Lake Charles-LA 379 and LA 378 Roadway Improvements/Corridor for Transport of Goods in Domestic and International Commerce, Parish of Calcasieu.”
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Mr. Dees stated he knew there were people who have signed up to speak to the expropriation issue. He wanted to outline for the public, there are three items that relate to Sasol. Submission 2014 – 054 is the item just read. It is a request for the Board to approve Sasol, the Port and DOTD enter into an agreement that would allow as it has been outlined in the presentation that the Port, in cooperation with each other, acquire the parcels needed for the heavy haul route at Sasol’s call, subject to the approval of the design and specifications of DOTD. Sasol then would construct that heavy haul route and at the conclusion of that construction, and once it is accepted and approved, it would be conveyed over to DOTD. This is that one issue.
There are two other issues. The next one deals with an agreement with Sasol and the Port. The last item is the authorization relative to expropriation.
Mr. Dees asked Mr. Lavergne if he wanted to speak on all of the items or just the expropriation. Mr. Lavergne stated he would like to speak on the expropriation.
Mr. Dixon offered a motion to adopt Resolution 2014 – 054 to authorize a Cooperative endeavor Agreement among the Lake Charles Harbor and Terminal District, SASOL Chemicals (USA) LLC and the State of Louisiana through the Department of Transportation and Development relating to that project designated “Port of Lake Charles-LA 379 and LA 378 Roadway Improvements/Corridor for Transport of Goods in Domestic and International Commerce, Parish of Calcasieu.” Ms. McManus seconded the motion and it carried unanimously.
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6. Submission 2014 – 055 authorizing the entering into of an agreement between the Lake Charles Harbor and Terminal District and SASOL Chemicals (USA) LLC entitled “Agreement to Acquire and Lease Needed Property for the SASOL Megaproject.”
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Mr. Dees stated that this is the provision that would allow if approved, the Port and Sasol to enter into an agreement to allow the Port to acquire the other parcels outside of the heavy haul route and then lease back to Sasol those items so that the plant can be constructed and operated as shown in detail in the presentation.
Dr. Burckel offered a motion to adopt Resolution 2014 – 055 to authorize the entering into of an agreement between the Lake Charles Harbor and Terminal District and SASOL Chemicals (USA) LLC entitled “Agreement to Acquire and Lease Needed Property for the SASOL Megaproject.” Mr. Eason seconded the motion and it carried unanimously.
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7. Submission 2014 – 056 making certain findings and providing certain assurances with respect to the acquisition of property needed for the development, construction, operation, and maintenance by SASOL Chemicals (USA) LLC of its SASOL U.S. Mega Project designated and named “The Sasol Megaproject.”
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Mr. Dees stated this is the, what they normally call the Expropriation Resolution. But, it does simply authorize the Port staff to undertake all the steps that are necessary before you get to expropriation and then ultimately file the expropriation. You would be determining that there is a need for the parcels based on the presentation submitted by Sasol and that if they are unable to successfully negotiate a voluntary purchase of those properties, based on the appraisals that will be conducted for them, then the Port staff would be authorized to file expropriation. That is, in general, what the resolution does. It is fairly lengthy. The Board has had it before them for a number of days and if there are any questions he would be happy to answer them. He stated Mr. Lavergne would like to speak on this issue.
Mr. Guillory asked for a motion on the item before Mr. Lavergne speaks.
Ms. McManus offered a motion to adopt Resolution 2014 – 056 to make certain findings and provide certain assurances with respect to the acquisition of property needed for the development, construction, operation, and maintenance by SASOL Chemicals (USA) LLC of its SASOL U.S. Mega Project designated and named “The Sasol Megaproject.” Mr. Eason seconded the motion.
Mr. Guillory called upon Mr. Jody Lavergne to address the Board. Mr. Lavergne stated he was an attorney in Lake Charles. He and Rusty Stutes, law partner, represent Tri-B LLC and Chris Meyer, who are the owners of a particular 5 acre piece of property in Westlake on Houston River Road. It was identified as property number 24 in area number 3 earlier. One thing he wanted to say to begin with is that they have been here two hours and folks have been saying a lot of things with a lot of pictures and talking about a lot of stuff. He wanted to make sure the Board understands this is very important to their client and to them and he appreciates their undivided attention on this matter.
There are also some things that are undisputed that they need to understand here. Is this a very important project? Yes. Are all the things Sasol talked about economic development true? Yes. Is there going to be an enhancement tax revenue? Yes. Will there be more jobs? Yes. Is this project going to move forward regardless if it expropriates Chris Meyer’s property? Yes. Is it illegal for this Board to move forward and expropriate that property? Yes. The Louisiana Constitution makes it very clear, and he will go into those details, that all those things Sasol talked about tonight – enhancement tax revenue, economic benefit and increase of economic development are specifically, expressly prohibited in the Louisiana State Constitution. Not some outlying decision, not some comment in an article, not something an expert said. It was something that was voted on by the people of Louisiana. Not some statute, not some judge in an outlying parish but voted by the people in the state in 2006. They are asking here today, on behalf of Chris Meyer, the owner of that property, to urge the Board to vote against the resolution to allow the Board to move forward with expropriating Chris Meyer’s property. This is not property that is part of a succession and they cannot find the owners. This is not about widening a road. This is owned by Chris Meyer and Tri-B LLC. Currently it is a business that operates primarily fabrication and industrial cleaning. Right now that is his business. That is his livelihood on this 5 acres. Alternatively, if this Board does not vote against the resolution tonight, they ask that they move the decision on that resolution to the December meeting to allow at least another month for parties, meaning his client and Sasol, to try to restart negotiations and continue to try to reach a mutual consensual agreement between the two parties, just like happens all over this country and all over this great state everyday when people come together and have an agreement.
Another thing that needs to be cleared that may not have been, is that this land is for sale. It has always been for sale when Sasol approached. When Sasol approached and made an offer, Chris Meyer responded and it took over a year before Sasol made a counter offer. At that point they contacted Sasol and said their client is very interested in continuing negotiations. They want to come to an agreement. This is his life, his personal life, his business. He wants that to be private, so they will continue to negotiate as long as you guys say you will be confidential. Which they thought would be easily accepted because Sasol’s first offer actually required confidentiality. In a written agreement, Sasol called for this. For whatever reasons Sasol refused to negotiate privately. They never heard from Sasol again until they heard through other people, not from Sasol, that Sasol had come to the Port to try to take his land because they did not want to do what he wanted to do. That is the process. During the course of those negotiations, the last 2 ½ years, they were told numerous times that Sasol did not need this property. They told Mr. Meyer they did not need that property. They would just build around him. He better sell it. They did not need it. They were told that numerous times. Also, this summer in July, the Informer in the American Press was posted in August with a response from Sasol. The quote states, “When Sasol’s Voluntary Property Purchase Program was announced in July, Hayes told American Press Staff writer Frank DiCesare that the company had already bought the property it needs for its plant expansion.” They were telling them that. They were telling the paper that. Now they hear, not through Sasol, but from other folks last week that they are telling the Board they absolutely have to have it and telling them tonight they absolutely have to have it. He has copies for everyone. (Mr. Lavergne passed copies of the American Press article to the Board.)
As the Board knows, most of them, not all of the Board, were contacted by Mr. Stutes, his law partner, once they found out Sasol had approached the Board to do this to let them know what had been going on. Their client has always been ready and willing to continue to negotiate and reach a mutual agreement. It is their understanding that the lawyers representing Sasol were instructed late last week to contact them to try to restart and continue those negotiations. The only person they were contacted by was Mr. Dan Flavin. That was on Thursday, at which point he told them, “He’s about to be crushed.” He is about to be crushed. That is what happened. But then at some point talks continue and they were able to schedule mediation to take place in 3 days, on Thursday of this week, with the local mediator to come together and say, “Let’s talk about this and let’s come to an agreement.” It is on their calendar and thought it was scheduled. Tonight they were notified by Mr. Flavin that he had not received a commitment from Sasol yet to go to the negotiations. He wants to make sure the Board understands. He is not sure what has been said or what the Board has been told outside of this meeting tonight, but that is what has been going on. Trying to come together and that has not happened yet. They are still, right now, totally ready to move their client to sit down and talk like folks do in Lake Charles, sit in the same room together and try to come to an agreement on Thursday. That can happen. But, with being presented tonight the expropriations and Sasol asking this Board, “Just file expropriations, great economic impact, all these great things are going to happen and they don’t want to take the money we want to pay so just take it.” There is a problem with that. And you heard Mr. Dees describe tonight that the Kelo decision and all those things, very quickly with out rehashing those things, in 2005 the U.S. Supreme Court did issue a decision in Kelo vs. the City of New London that allowed for expropriation for private purposes without really showing a public purpose. It was a decision that shook some people, including Justice Scalia and Justice Thomas. Mr. Sanchez knows as a lawyer in this community two very conservative pro-business, very pro-business, pro development, pro-business justices who said this a bad idea. They said it is an abuse of power. That is the fear here what could happen tonight, is an abuse of power. Some pretty special power that has been entrusted to you as board members and to the Port that in some instances the Port can expropriate absolutely. And it is a special power that should be taken with great care and not wielded as leverage.