Port finds tenant for grain terminal

Love it or hate it, that 100-plus-foot grain elevator dominating Pier 86 on Seattle's waterfront is here to stay.

The Port of Seattle said yesterday that it will lease the pier's 30-year-old grain terminal to Louis Dreyfus Corp., a Wilton, Conn.-based exporter of agricultural goods, ending a nine-month search to replace Cargill, the facility's original tenant.

The move ensures that grain will continue to flow through the terminal, a longtime fixture in Seattle that provided grain companies $60 million in revenue last year and hundreds of jobs for longshoremen, railroad workers and tug operators.

The future of the grain terminal was left in doubt last year when Cargill announced in July that it was leaving the facility to win the Justice Department's approval of its acquisition of rival Continental Grain.

The Port built the $14 million facility specifically for Cargill in 1970. The Port would have been forced to tear down the terminal and redevelop the 40-acre property if it could not find a grain company to replace Cargill.

Residents from Elliott Bay to Queen Anne would not have minded. To some, the grain terminal is an eyesore that blocks their view of the waterfront. The Port could have also commanded top dollar for the property, possibly leasing it to a high-tech or biotech company. In 1998, Immunex bought nearby Terminal 88 for $16 million.

But the Port was confident the facility would remain a grain terminal, said Mark Knudsen, the Port's director of marine operations. With the Asian economy on the mend, the Port's long-term projections for grain exports are solid, he said.

Almost 2 million tons of grain pass through the facility every year.

The terminal "still has a lot of useful life left in it," said Knudsen, noting the facility could last 20 more years without extensive renovation.

A number of suitors had expressed interest in the grain terminal. Last month, the Port began talks with Louis Dreyfus, which was looking to enter the Asian market, said Knudsen.

The company, which generated $18 billion in revenue last year, will assume the remainder of Cargill's five-year lease. No job cuts and no major changes are planned, said Knudsen. The Port will continue to receive more than $1 million a year in rent, including 50 percent of all dockage revenue generated from the facility. Louis Dreyfus will have the option of renewing the lease once it expires in November 2005.

Thomas Lee's phone message number is 206-464-2448. His e-mail address is: tomlee@seattletimes.com