Jessica Cejnar Andrews / Thursday, June 29, 2023 @ 3:59 p.m.
Harbor District Owes Fashion Blacksmith $1.298 Million in Damages, Must Resume Dredging Near Business By October
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The Crescent City Harbor District owes Fashion Blacksmith $1.298 million in damages and must dredge to a depth of 18 feet under the boatyard’s Synchrolift by the end of October, according to a final decision state arbitrators issued June 5.
Fashion Blacksmith could reopen the case against the Harbor District if it can’t meet that October deadline, Harbormaster Tim Petrick told the Wild Rivers Outpost on Tuesday.
Fashion Blacksmith could also withhold rent to the Harbor District starting Nov. 1 “until such time as Respondent completes the dredging,” according to the arbitration.
But to do that dredging, the port needs a beneficial use permit from the California Water Resources Control Board, which means it needs to find a project that can free up some 90,000 cubic yards of soil in the district’s dredge ponds, Petrick said.
“We’re trying to find larger projects, or projects that need more soil versus less,” he said. “I’m sure there are plenty of projects that could take 1,000 cubic yards or less, but it’s not really worth it for us.”
The final decision from the three-member arbitration panel comes after Fashion Blacksmith, which has been a Harbor District tenant for more than 42 years, filed a complaint in Del Norte County Superior Court on Feb. 9, 2022.
In its complaint, Fashion Blacksmith accuses the Harbor District of breach of contract because it did not maintain a depth of 18 feet below its Synchrolift — a wooden platform that lifts boats onto land for maintenance work. Fashion Blacksmith also stated that the Harbor District failed to maintain the facility it leases.
The dredging stipulation was included in a 1996 amendment to the lease Fashion Blacksmith has with the Harbor District, according to the arbitrators’ decision.
Arbitrators found that the Harbor District was “contractually bound to conduct whatever operations are required to maintain that the area of the harbor under the Synchrolift platform has a water depth of at least 18 feet,” which requires dredging in that area.
According to the decision, Long informed the Harbor District in mid 2020 that the 18-foot water depth under the Synchrolift wasn’t being maintained, and gave them until April 2021 to complete that dredging.
Fashion Blacksmith CEO Ted Long testified that the area underneath the Synchrolift had previously been dredged despite Harbor District officials arguing that maintaining 25 feet of vertical travel space in that area wasn’t possible.
Arbitrators also rejected Harbor District arguments that dredging deeper than 15 feet would be illegal because the district lacked the permitting and it would be “financially impracticable.”
“This latter contention is apparently based only on the contention that the cost of dredging and disposal of the spoils, for instance at HOODS (the Humboldt Open Ocean Disposal Site) would be disproportionate to the rent paid by the claimant and is higher than originally contemplated,” the arbitration states.
Arbitrators found that though it’s expensive to dredge under the Synchrolift, the Harbor District is bound by contract to conduct that dredging.
Arbitrators found that Fashion Blacksmith lost about $3.3 million in revenue because it wasn’t able to use the Synchrolift. Of that revenue, about $1.293 million is an estimate of the profits Fashion Blacksmith lost in 2021, 2022 and 2023.
Long further testified that if dredging isn’t completed in 2023, he will be forced to shut his business down and would lose $3.5 million in future lost profits.
In April, following an interim decision from the panel of arbitrators, Petrick said the Harbor District never had the necessary permits to dredge to 18 feet underneath the Synchrolift. Regulations and enforcement were more relaxed in 1996 and “it wasn’t really an issue,” he said.
Using that sediment as fill for the new amphitheater slated to go into Beachfront Park is an option Petrick is exploring with Crescent City Manager Eric Wier.
Engineers doing the permitting and design work for a rebuild of Citizens Dock and the adjacent sea wall at the harbor are also trying to determine how much fill that project needs, Petrick told the Outpost. An Elk Valley Rancheria project to fill in an old quarry could also be a possibility for that material, he said.
But those potential disposal ideas won’t pan out this year, Petrick said. Even if the port got its beneficial use permit this year, they need permission from the Army Corps of Engineers to begin transporting it. Clearing 30,000 cubic yards of material would take about six months, Petrick estimated.
“The permitting process for Fashion Blacksmith’s area is a separate process,” he said. “When we get those permits, we’ll be looking at multiple different disposal options, one of which would be HOODS.”
Creating a temporary settling pond for that material on land is an option as is depositing it roughly 100 yards away from shore to a deeper area of the harbor, Petrick said.
Meanwhile, the Crescent City Harbor District is part of a new North Coast Dredging Group, which consists of representatives from state and federal agencies as well as other harbors in the region.
According to Petrick, the U.S. Army Corps of Engineers is the lead agency.
“The idea is to figure out how we can streamline the permitting process and permitting of individual dredge pond projects on the North Coast,” he said, adding that Humboldt Bay and Noyo Harbor districts are part of that group. “It’s really complicated and it’s hard to get done. Because up and down the coast every single harbor has to dredge, you would think there would be a more streamlined process, but there really isn’t. It’s disjointed different agencies and they don’t work together on it.”
Petrick said the Harbor District will “avail ourselves of all of our legal remedies” as far as making payments to Fashion Blacksmith.
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