HomeMy WebLinkAbout(P 2) Diligence_Port_Arthur_Lease_PresentationDiligence Offshore Services LLC
Update on Lease Negotiations with the City of Port Arthur
Presented by Harry Crawford, Managing Member
Requested by Councilmember Willie Bae Lewis
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Background & Status
Over the past 60 days, Diligence has made multiple key concessions to break the deadlock:
- Environmental liability resolution
- Easement clarification
- Sublease revenue sharing proposal
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Environmental Liability
• Diligence proposes to cap the site with new soil
• Phase 2 assessment made optional, not mandatory
• Liability retained by City unless Diligence chooses Phase 2 and remediates
• This is market-standard and protects both parties
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Easement Terms
• Neighboring landowner clarified no award received from City
• Diligence revised easement language accordingly
• City’s proposed termination right is off-market and would make project non-financeable
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Sublease Revenue Sharing
• Deleted City’s demand to share 20% of sublease profits
• Sublease rent reflects massive construction investment—not just land value
• Current provision is non-commercial and burdensome
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Good Faith Engagement
• Diligence legal counsel has repeatedly sought collaborative review sessions
• Attorney Chris Wilson: "We think we are close on all fronts"
• City's unilateral changes contradict prior negotiations
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What We Need to Finalize
1. Good-faith review call with City staff and BBK
2. Resolution on environmental, easement, and sublease terms
3. End to one-sided lease revisions
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Conclusion
• $2.5B+ capital investment
• 1,000+ jobs for Port Arthur
• A national tech and clean energy hub
Diligence remains committed to partnership, transparency, and shared success.
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