November 5, 2007

Dear Editor:

I read with much interest Norman Koerner’s article letter in the Benicia Herald on Sunday November 4, 2007 claiming to lay out the “facts” on Amports operations in Benicia. He claims to have “visited” with an official from Amports. I must ask three things: Just who is Norman Koerner? What is his connection to Amports? And which supposed official of Amports did he speak with? I believe these are questions that need to be answered if we are to get an objective review of Koerner’s knowledge of Amports business practices and how it acquired the Arsenal.

Let me answer, point by point the supposed “facts” Koerner lays out.

• “Amports is a foreign company.” FACT: Amports was solely owned by Benicia Holdings, a firm traded on the London Stock Exchange until it was recently purchased by AIG, an insurance and holding company. Amports is still essentially managed by British interests. During the Arsenal purchase, Benicia Industries, which is now Amports, was a British company.


• “Amports should pay a Port Tax because it operates without paying taxes.” FACT: No one has said Amports pays no taxes. What has been stated is that Amports should pay a Port Tax on every automobile it unloads and every ton of freight it loads and unloads which every other Port in the U.S. collects.


• “Consultants and the City Attorney say a Port Tax is legal.” FACT: Consultants and our City Attorney have found that a Port Tax would be totally legal. The U. S. Supreme Court has so ruled. Amports evades paying Port Taxes amounting to tens of millions of dollars a year by NOT paying a totally legal Port Tax.


• “Amports leases the lands it operates on from the City.” FACT: Amports paid the City Attorney from Benicia over $200,000 in 1964, to write a “lease” that allowed Benicia Industries to “lease” most of the Arsenal property. This so called “lease” allowed the lessee to “lease” or SELL any of this property. (Ever heard of that kind of lease?) The “lease” allowed for the payment to the City ½ of one percent of the sale price of these lands up to a maximum of $45,000. This was for some 2,200 acres of Arsenal property. Such a deal...


• “Amports owns in fee (sic.) all operating property except for a state land grant of submerged property.” FACT: True, up to a point. Under the terms of this so called “lease” Amports did get fee simple title to the Arsenal lands when it made the land exchange in 1975. However, Amports claims in public meetings to own the pier, which is part of the submerged property, when in fact it is only leased from the City until 2031. Amports has paid a total of less than $5,000 for a sixty-six year lease of this pier. A conservative estimate of the true market value of this “lease” is $1,500,000 per year, and this estimate was done in 1995.


• “Amports does not pay its fair share of taxes.” FACT: This was explained above. But we must look at the ridiculous, low price Amports paid for this land which it now claims pays half the City’s revenue.


• “The City was pursuing various avenues...” FACT: Amports was the one who approached the City to do this “lease” not the other way around.


• “Amports ‘stole’ the Arsenal form the City.” FACT: It was against the law (it still is) for the U.S, government to sell government owned land or property to private industry. Amports got the City Council to form a “Surplus Property Authority” to buy the Arsenal. Amports gave the Surplus Property Authority some four and a half million dollars to buy the Arsenal from the government. The Surplus Property Authority then gave title under the so called “lease” to Amports. Under any common sense look at this transaction, it would be immediately questioned as a scam, pure and simple. The “land” Amports exchanged for title to the arsenal property was the yacht harbor and Benicia Green. Quite a deal for 2,200 acres wouldn’t you say?


• “Amports refused to publish a legally required tariff.” FACT: When I called Amports to get a copy of its tariff, I was told “We don’t provide that information.”


• “Amports illegally funds local politicians.” FACT: This claim was never made.

In going over the so called “facts” Koerner lays out, I found nothing that could be called the truth. I found half truths and a general twisting of the truth by someone who quite obviously has a connection to Amports, and by someone who did no research but says he relied on statements from an alleged official of Amports. Mr. Koerner, I wrote each and every one of the articles laying out the actual facts regarding the lack of a Port Tax, which I think would solve many of Benicia’s financial woes. I researched the articles I wrote. The documentation I have is very clear and none of Koerner’s unobjective hyperbole will change the facts. Amports should pay a Port Tax on each and every car or ton of freight it loads or unloads at the Port of Benicia! Every other City with a Port has a Port Tax, why not Benicia?

George Delacruz
Benicia