Business & Tech

Local Fishing Family at Odds with Harbor District Over Fish Lease

When the leases expired for three fishing companies on Johnson Pier, the San Mateo County Harbor District was faced with making some challenging decisions that not everybody liked.

Fourth generation commercial fisherman Geoff Bettencourt says he “never had a chance” when applying for one of the three open fish leases on Johnson Pier in Pillar Point Harbor. 

“A superior economic package from a family with 120 years in this community was brushed aside in favor of entrenched interests who were able to convince the Harbor Commission to turn down additional revenues,” he said. “One would have to ask if this Harbor Commission will ever allow anything to improve at Pillar Point Harbor.”

The San Mateo County Harbor District’s general manager Peter Grenell says anyone had a chance through a proposal process that invited interested parties to apply for leasing one of the three open facilities used for fish buying and off loading. 

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In December of 2011, the San Mateo County Harbor District issued a public notice requesting interested parties to submit proposals since the current leases for Pillar Point Seafood, Morningstar Fisheries and Three Captains Sea Products had expired. They received four proposals, one from the Bettencourt’s and three from the existing leaseholders.

In the end, it was decided that Pillar Point Seafood, Morningstar Fisheries and Three Captains Sea Products would continue as leaseholders of the same three spots they’ve held for 30 years.

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Currently the leases are being reviewed by each of the three firms awarded the leases from the Harbor Commission. The leases will then be forwarded to the Department of Boating and Waterways (DBW) with the Harbor Commission’s request for their review and approval. Once that is given by DBW, the leases will be signed. 

“During these challenging economic times, the Harbor Commission felt the need to reaffirm its commitment to sustaining the diversity and stability of Pillar Point fisheries and fishing activity, while obtaining increased revenues from existing and new sources,” said Grenell. “The Harbor Commission decided that renewing our relationship with the existing leaseholders is the best way to accomplish these goals.”

Still, the Bettencourt’s assert that “there was some other agenda at play here,” said Lisa Bettencourt-Damrosch, who drafted the proposal for the lease with her brother Geoff.

Even though Bettencourt Fisheries fully complied with the application and “was the only package that met the minimum lease amount required per the public notice, offered an investment for improvements to the space, had 120-year fishing family history, a plan for marketing and branding, support for sustainable and environmentally friendly fishing, expanded market opportunities for the fleet, and careful and accurate reporting using the latest technology, we never had a chance,” said Bettencourt-Damrosch.

“My brother Geoff Bettencourt and I did everything we possibly could to provide the harbor with the best possible option, economic and otherwise, and as is clear in the record, that we did provide the best option and still we were not given a lease.”

Bettencourt-Damrosch attributes a loyalty to the individuals who have been leasing at the pier for many years, multiple negotiations with the existing tenants that excluded them, and a desire to retain longer term leases to sell as major reasons why the Bettencourt’s believe they were overlooked when applying for a fish lease on the pier.

“When a public notice is issued with requirements that are suddenly changed without an additional public notice, when closed door sessions are held and votes that take up to six months are reached without discussion, and when an economically and otherwise superior package that has by all accounts met and exceeded all original requirements can be passed over for non-compliant entrenched interests, someone needs to stand up,” said Bettencourt-Damrosch.

Still, before awarding any leases, the Harbor Commission, according to sections in the State Harbors and Navigational Code, has two options: except the highest bid for filling the spots or provide a proposal and negotiating process.

They opted for the proposal process, which “gives no direction or guidance other than the implication that you will decide who is awarded the lease,” said Grenell.

Why did they opt for the proposal process as opposed to the highest bid?

“Because we need to consider the best interest of the harbor and in a highest bid process we lose our flexibility and control over ensuring the safety and wellbeing of the harbor," said Grenell.

He's referring to the fact that with the highest bid, “we will be stuck by law to take on that hirer bid even if they don’t comply with the physical limitations of the pier and its arrangement,” he said.

Traffic congestion and safety become a huge factor to consider as fish lessees jockey for space. Anyone can come in and decide to unload fish for a period of time, and then turn around and start buying.

“We can only have so many out there doing the same thing. The bid process does not allow us to manage what fish lessees do and how they do it so that’s why we opted for the proposal process,” he said.

Regardless, Bettencourt attests that Grenell released a staff recommendation that reduced the minimum lease amount from $3,000 to $2,500 and proposed to award the leases to the same businesses that have held them for 30 years without significant improvements or revenues given to the Harbor. He also wonders why the Harbor Commission with a $1.4 million debt to the Department of Boating and Waterways wouldn’t want the highest bid to generate revenue.

“We offered a significant investment into facility improvements the other three proposals did not,” said Bettencourt. “Our proposal also offered the possibility of a new and additional revenue stream such as expanding market opportunities for the fleet.”

Grenell says there was a lot more to their decision than looking to generate revenue. He admits that higher leases would indeed help pay off loans but the Harbor is already increasing their revenue sources in other ways “so this gives us another reason to not go for the highest bid,” he said.

New revenue streams for the Harbor include unloading fees, and under a new ordinance code, the Harbor District has implement a commercial buyer activity permit so non-lessees will have to apply for an annual permit before buying on the pier.

“Up until now, we never received revenue from those off-site buyers or fish unloaders, but we will now,” said Grenell.

In addition, the Bettencourt’s only wanted to unload fish “and we can only have one out there because of the physical safety issues on the pier. It would be too much chaos out here,” he said.

Also, said Grenell, with the Bettencourt proposal there were too many variables of uncertainty, including the Harbor Commission’s responsibility to maintaining fish diversity in the harbor when it comes to the individual fishing quotas (IFQ) catch share system, which has been challenged in federal court. 

A highly regulated federal government program, IFQs set a species-specific total allowable catch (TAC), typically by weight and for a given time period. A dedicated portion of the TAC, called quota shares, is allocated to individuals. Quotas can typically be bought, sold and leased, a feature called transferability.

“Uncertainty arises as to what happens if the challenge is upheld. While the Bettencourt proposal clearly says that Bettencourt would unload catch from any fishery, not just ground fish, the proposal focuses on establishing a ground fish unloading station at Pillar Point Harbor,” said Grenell.

Still, it might work for Bettencourt to be the only first receiver unloader for IFQ ground fish “but the IFQ system limits participation in the fishery, and thus may reduce local fishing activity,” said Grenell. 

This contrasts with a community fishing association (CFA) alternative, in which the association would hold the quota that would be available to a wider range of participants. The formation of a CFA at Pillar Point Harbor is being talked about, said Grenell, and would sustain a wider community access to the fishery and would be important for the Pillar Point fishing industry and its participants. 

“Under this approach, quota would be assigned to the association and thus available to all of its members, in contrast to the individual assignments of IFQs. It’s not certain, but if a CFA were to be formed and sought quota, that might be more difficult to obtain if an IFQ operation were already in place,” he said.

Yet the Bettencourt’s continue to explore options with the Harbor.

Last week they requested a meeting with Grenell to share a proposal with a solution. They would like to see a fourth location created on the pier, “a progressive and viable solution to this whole problem,” said Bettencourt-Damrosch.

“As a family that has been unloading to this dock since it was built, we are clear on what is possible within the space, and we are willing to create and fund this solution ourselves," she said.

Grenell is aware of their idea but because “the Bettencourt’s attorney had contacted the Department of Boating and Waterways about the Harbor Commission’s action on the leases, the District needs to wait until the Department has acted on its review of the leases before we are in a position to discuss new alternatives. Not until then will the question of considering other proposals arise,” Grenell said.

In the meantime, the Bettencourt’s remain hopeful that the Harbor Commission will “meet with us and resolve this with a re-evaluation of their decision," said Bettencourt-Damrosch, "or a new alternative as we have tried to propose.”

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