Shipyard Legislation Helps Toledo Port Grow

Jun 30, 2017

The Oregon Legislature approved a bill this session that authorizes ports to operate shipyards. For the Port of Toledo, it is one of many steps in efforts to restore an economic driver for the region. But, some private shipyards in Oregon fear they’ll lose millions of dollars in business.

Toledo is about 10 miles up the Yaquina River from Newport, on the coast.
For the past few years, the port has been expanding its shipyard, which had been left idle after Fred Wahl Marine Construction moved away.
A crew is at work at the Toledo shipyard. Port Manager Bud Shoemake says they’re sponsoning a boat called the Redeemer.
Shoemake: “Basically, we took a skinny boat and we chopped off about three feet off the front, added that to the back and then we widened it. Basically, it can pack a lot more crab pots and be a lot safer.”
Shoemake says The Redeemer was featured in the TV show “Deadliest Catch” when it filmed in Newport last year.  Local contractor Reino Randell is in charge of this project. Randell says having a working shipyard in Toledo is important for the local economy. It’s also good for the offshore fleet who live in the area.
Reino Randell: “Now they can come here and do work, you know, close to their home. And a lot of the shipyards, like in Seattle, are struggling, but, you know, we’re actually expanding which means a lot. And it’s huge for the whole area.”
The port’s latest acquisition is a 660 ton lift for hauling boats out of the water. Bud Shoemake says the haul-out gives them the capability to work on larger boats.
Shoemake: “Newport, I’d like to say, is second only to Seattle in the number of distant water boats. So, these boats fish from the Bering Sea to the South Pacific. So, trying to bring that money, keep it home is really important to us.”
Newport is home to the NOAA fleet and Oregon’s largest commercial fishing industry. Five Oregon ports own shipyards, but Toledo is the only one that can do more than haul-out and blocking of vessels according to the state’s Public Port Authority.
Again, Bud Shoemake:
Shoemake: “A lot of our boats have been going elsewhere. They’ve been going to Seattle and out of country and out of state to have their work done. We’re trying to attract that back. So, I think there’s enough for everybody.”
But Reedsport City Manager Jonathan Wright disagrees. He says a public agency shouldn’t be competing with private industry in a limited market.
Wright: “There’s no good for each port to operate a shipyard. While it may be good for local economic development in that region. All it does is take clients from one business to another.”
Reedsport is on the south coast. The shipbuilder Fred Wahl moved there from Toledo several years ago. It’s the biggest employer in town. Wright says it’s unfair for ports, which are tax-exempt, to compete with private industry.
Wright: “The ports don’t have that tax liability. I can speak on behalf of Fred Wahl Marine Construction. They paid over $100,000 of personal property tax which, of course, over 10 years will add up to a million dollars.”
Wright says from talking to people in the industry, private shipyards have already felt an impact from the Port of Toledo operating a shipyard.
Wright: “They’re losing vessels to that shipyard which is now operated by a public entity.”
David Gomberg represents the Central Coast in the state legislature. He is a co-sponsor of House bill 2902, which authorizes ports to operate shipyards.
Gomberg says ports are involved in all kinds of enterprises. And, he says Fred Wahl left the Toledo shipyard behind.
Gomberg: “The backstory is that Mr. Wahl owned a shipyard in the Toledo area that went out of business. He sold it to the Port of Toledo, who then spent about a million dollars to clean it up and put it back into operation and Mr. Wahl is now unhappy that they are actually using it as a shipyard.”
Gomberg points out that Fred Wahl has benefited from public funds. The company’s Reedsport shipyard recently received a $3.4 million Oregon lottery grant.
Former lawmaker Kevin Mannix represents Fred Wahl as director of West Coast Marine Trades Association which advocates on behalf of ports and port related businesses. He says the legislation goes too far.
Mannix: “It empowers the marine ports to do more than the traditional role of ports as anticipated in the United States. Where normally the ports would provide facilities but then businesses come on board, businesses that pay taxes and they hire folks to do the work, constructing or repairing boats.”
Mannix says the Fred Wahl company doesn’t want to lose their competitive edge.
Mannix: “We’re concerned about government taking over the shipbuilding industry in Oregon.”
Toledo Port Manager Bud Shoemake.
Shoemake: “The port has no plan of actually building boats.”
The bill to authorize ports to operate shipyards was approved by the legislature. Governor Kate Brown signed it into law last month.
This story is part of KLCC’s occasional 50th Anniversary Road Trip series.