There are more than 2,300 acres of industrial land in Pendleton and a majority of those are owned by the city.

One city-owned property is a 9-acre parcel just east of Newly Weds Foods, which the Pendleton City Council recently agreed to lease to Queen B Storage.

The lease agreement has come under criticism from Go Construction & Development owner Gale Marshall, who said at the Nov. 17 council meeting that the city’s relatively low lease terms will significantly hurt his recreational vehicle storage business, which adjoins the city-owned land.

In an interview after the meeting, Marshall said he has invested heavily into his 24-acre property, which he uses to lease space to companies that transport travel trailers made at the nearby Keystone RV Co. plant.

Queen B, which is based out of Goshen, Indiana — the same city as the Keystone headquarters — will go from leasing land with Marshall to becoming Marshall’s chief competitor.

Marshall said the city’s lease rate, $1,825 per month, is four times less than what he currently charges companies to lease space on his land.

According to Marshall, all of his tenants have informed him that they will sublet with Queen B after their leases end.

City Manager Robb Corbett said the municipal government’s role in the industrial market is a discussion worth having.

Although the city couldn’t provide a complete inventory of industrial land it owns, Economic Development Director Steve Chrisman identified 518 acres of city-controlled property between the Westgate and Eastern Oregon Regional Airport industrial areas.

City Planner Evan MacKenzie said that land has some important caveats. While some of it is unable or unlikely to see development, a large chunk can’t be sold at all.

In accordance with Federal Aviation Administration rules, the city can only lease the 130-acre industrial park surrounding the airport.

Although the city has a say in what businesses it leases to, selling the land isn’t possible.

“It’s kind of like having U.S. forest land,” MacKenzie said.

Corbett said Queen B approached the city about leasing the land east of Newly Weds, although he’s unsure what motivated the inquiry. Corbett said Queen B may have sought out the property to either relocate, expand or leverage its lease with the city to obtain a better deal with Marshall.

Calls to Queen B did not go through and the company didn’t respond to an email.

“The other side of it is perhaps Mr. Marshall’s price is too high,” Corbett said.

Corbett said there are advantages to having city-owned industrial property.

While private property owners may expect too high a price for their industrial properties, Corbett said cities are less motivated by profit and are sometimes in a better position to secure development.

He added that Keystone might not have been interested in Pendleton if the city wasn’t able to offer the company an affordable rate.

Corbett said the city’s industrial lease rates are comparable to other industrial parks in areas like the Port of Morrow.

Despite the conflict, Corbett said he could understand Marshall’s argument.

“I’m really sympathetic to Mr. Marshall and his situation and I’ve expressed that to him,” he said.

Marshall will get his chance to make his argument count. The council will reconsider its lease with Queen B at its Dec. 1 meeting.

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Contact Antonio Sierra at asierra@eastoregonian.com or 541-966-0836.

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