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Port, Company Said to Be Close on Lease Extension Deal

DOLE FOOD CO.

CEO: David DeLorenzo.

Revenue: $5.7 billion for three quarters ended Oct. 8, 2011; up from $5.3 billion in the like period of 2010.

Net income: $38 million for three quarters; $7.4 million in like period of 2010.

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No. of local employees: 15.

Year founded: 1851.

Stock symbol and exchange: DOLE, on the New York Stock Exchange.

Company description: Global grower, processor, marketer and distributor of fresh fruits and vegetables.

Key factors for success: Dole is dedicated to high-quality standards and satisfaction. The world’s largest producer and marketer of fresh fruit and fresh vegetables is also committed to providing nutritious products and nutrition education.

The Port of San Diego and Dole Fresh Fruit Co., one of its largest tenants, are nearing a 25-year extension of Dole’s lease at the Tenth Avenue Marine Terminal.

“This ain’t a done deal, yet, but we’re really close,” said Ron Powell, the port district’s chief spokesman. Powell said both sides have been talking in the past few weeks, and have worked out the framework of a new agreement.

Bill Goldfield, spokesman for the company’s parent firm, Dole Food Co.’s headquarters office in Westlake Village, confirmed that while a contract hasn’t been signed, the company was in the final stages of discussions with the port district to extend the lease.

Joel Valenzuela, the port’s director of maritime operations, said Dole notified the port last year that it intends to stay here, and the final contract terms are being hammered out. The lease would replace the first term of the current lease that expires at the end of this year, and is expected to be signed in March or April, he said.

It Considered Relocating

Both parties said Dole considered relocating from San Diego to Port Hueneme in Ventura County, or possibly another port before negotiating in earnest with the Port of San Diego, where Dole has been operating since 2002.

Goldfield said talks have been going on for about three months, but the parties had some conversations going back about a year ago.

Dole brings in about 23 million containers of fruit annually to the terminal located south of the San Diego Convention Center through weekly shipments. The majority of the cargo is bananas from Ecuador and Costa Rica, but shipments also include pineapples and other fruit, he said.

Dole’s leasehold generates about $2.15 million annually in rent and fees, Valenzuela said. A port district report showed Dole’s shipped containers grew 5.5 percent during the most recent fiscal year that ended June 30 to 48,750. Besides rent, the port district collects dockage fees on each ship that uses the terminal as well as wharfage fees assessed per container, Valenzuela said.

The port’s maritime operations, which also include activity at its National City Marine Terminal, generated $34 million in revenue for the 2011 fiscal year. That was down from $37.6 million in annual maritime revenue in the prior fiscal year, according to the most recent annual report by the Port of San Diego.

The $3.6 million decrease was caused from fewer cruise ship calls as well as fewer passengers embarking and disembarking from such ships, the annual report stated.

The Man With the Plan

The value of the terminal has been in the news lately following the release of a new plan for the waterfront espoused by Douglas Manchester, the local commercial developer who became part owner of the San Diego Union-Tribune last year.

The proposed plan revealed in a front-page Jan. 22 U-T San Diego article called for a new football stadium with a retractable roof just south of the convention center; a sports arena, along with a pier, beach, parkland, a parking garage and retail space. The project would eliminate the Tenth Avenue terminal, but seeks to relocate those industrial uses to National City.

Manchester’s plan aims to create a larger expanded convention center, while the stadium would replace the chosen site of the San Diego Chargers in the East Village, east of Petco Park. The plan has been criticized by Mayor Jerry Sanders and others as not feasible and unrealistic. Its estimated cost was $1.5 billion, about the same cost as that for some of the most recently constructed football stadiums.

Sharon Cloward, president of the San Diego Port Tenants Association, which represents nearly all of the port’s master tenants, said Manchester’s vision is flawed in many ways and eliminates a key deep-water berthing area that creates better paying jobs and one that the U.S. Defense Department depends upon.

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