Port brings leases up to market rate to ease taxpayer burden

WENATCHEE — Getting leases in line with market value — and easing the burden on taxpayers — was the clear focus when the Chelan-Douglas Regional Port Authority approved a new agreement with long-time tenant Pregis Innovative Packaging at its November 12 meeting.

Pregis, a manufacturer and distributor of protective packaging materials used across shipping, logistics, and industrial sectors, has operated in Industrial Building 4 at the Olds Station business park since 1999. CEO Jim Kuntz said the contract had fallen far behind the market. “The lease was very old and very outdated,” he told commissioners, noting that Pregis had been paying just sixty-two cents per square foot per year. “In this business market, we’re a buck a square foot per year, so we really had to get a schedule put together.”

After what Kuntz described as some pushback, Pregis agreed to a stepped-rate schedule of seventy-two, eighty-two, and ninety cents per square foot over successive terms. The updated lease also clarifies maintenance responsibilities, shifts building insurance coverage to the Port (with costs passed through to tenants), and updates benefit-charge language for the industrial complex.

Commissioner Jim Huffman underscored the larger financial context, reminding the board and audience that non-tax revenue now exceeds tax-based income. “We get about twice as much revenue from non-tax sources,” Huffman said, explaining that the Port’s portfolio of market-rate leases now brings in roughly double what it collects from property taxes.

Kuntz said the lease renewal also helps maintain fairness among tenants while keeping Port-owned properties competitive with the private sector. “Market rate on our leases is really important,” he told the board, describing the Pregis agreement as both a financial correction and a matter of principle.

For the Port, aligning lease rates with real-world conditions is part of a broader fiscal strategy to sustain infrastructure investment at sites like Olds Station, the Trades District, and Pangborn Memorial Airport. By relying more heavily on earned revenue from tenants rather than tax assessments, officials say they can reinvest in industrial development, facility upgrades, and economic expansion while keeping the region’s public tax load stable.

The motion to authorize the new lease passed unanimously, with Chelan commissioners J.C. Baldwin (via Zoom) and Richard DeRock, and Douglas commissioners Huffman, Mark Spurgeon, and Alan Loebsack in attendance.

Andrew Simpson: 509-433-7626 or andrew@ward.media