San Diego Unified Port District officials have approved a request by locally based Dixieline Lumber Co. to reduce the size of its waterfront leasehold.

Port commissioners approved the 3.36-acre reduction at their Nov. 8 meeting, taking Dixieline’s presence from approximately 15.7 acres to 12.4 acres. According to a port district staff report, the move will increase the district’s ability to retain Dixieline as a port tenant beyond 2013 and into its option periods.

In exchange for the leasehold reduction, Dixieline is obligated to remove structures and make pavement repairs at a cost of approximately $250,000. Port staff will be negotiating to add the acreage to the operating area of cargo services provider The Pasha Group, which has facilities near Dixieline.

Dixieline’s lease with the port is also being transferred to Denver-based Pro Build Company LLC, which acquired Dixieline in 2009 as part of a reorganization that included an infusion of capital.

Dixieline originally leased 29.2 acres from the port district for its lumber storage and distribution facility adjacent to the National City Marine Terminal. But in recent years, it has requested reductions in the leasehold, citing a decline in lumber demand caused by the construction downturn, the port staff report said.

— Lou Hirsh