UPDATE: Prembina still hopes for hearing, PBA called opinion "legal hair-splitting"

TRIBUNE PHOTO: JAIME VALDEZ - Port of Portland and Pembina representatives stand near the site of a proposed propane pipeline over the water, which requires an environmental zone change.Plans for a propane terminal in North Portland may finally be dead after the City Attorney issued an opinion Tuesday saying the City Council is not required to hold a hearing on it.

The Pembina Pipeline Co. needs a land use change to build the terminal at the Port of Portland. The Planning and Sustainability Commission (PSC) has recommended the change be granted with conditions. The proposal has been scheduled for a June 10 council hearing, but Mayor Charlie Hales did not file the necessary paperwork for it to occur.

Hales is in charge of the Bureau of Planning and Sustainability, which is overseen by the PSC.

Commissioner Nick Fish sought the legal opinion because Title 33 of the zoning code says the City Auditor must schedule hearings on land use changes approved by the PSC. The memo from City Attorney Tracy Reeves says there is no legal obligation to hold such hearings after they are scheduled, however.

"In this instance, after the report and recommendation was forwarded by the PSC, a heaing was scheduled but the Commissioner-in-Charge (the Mayor) elected not to the place the matter on the Council Agenda. We are not aware of any previous situation where the Commissioner-in-Charge elected not to place a report and recommendation of the PSC on the Council Agenda, nor are we aware of any previous City interpretation of Title 33 on this question," the memo says.

The memo also says the Port of Portland could seek a writ of mandamus in court to compel the hearing, and that it is not possible to predict how the court would rule.

The memo can be read here.

Pembina is still hopeful the council will hear the proposal, however.

"Pembina’s investment in Portland was made in good faith with the mayor’s support. We were asked to be patient with the city’s process and have participated fully with the mayor’s Planning and Sustainability Commission in receiving a positive vote to move the proposed text amendment to City Council. We continue to follow the news from City Hall with interest and look forward to a decision making process before City Council," says company spokesman Jason Fydirchuk.

Portland Business Alliance President and CEO Sandra McDonough says her organization is disappointed by the opinion, which she calls, "legal hair-splitting at its best."

McDonough says not holding a hearing on the proposal sends a bad message to other companies interested in doing business in Portland.

"What is says is, you can follow all the rules and still get shut down," says McDonough, who urges the council to hold the hearing.

Pembina proposed investing $500,000,000 in the terminal to ship propane to Asian countries. It would create hundreds of temporary construction jobs and up to 40 permanent jobs, in addition to generating millions of dollars a year in property taxes.

The project plan calls for propane to be delivered to the site by rail. To complete the project, Pembina needs to build a pipeline to the terminal across an environmental overlay. That requires a land use change that must be approved by the council after being considered by the PSC.

The project was opposed by environmentalists because of the greenhouse gas emissions that would be released by burning the propane and by some area residents for safety reasons. The PSC recommended approval of the change, on the condition Pembina pay a carbon fee of $6.2 million a year to the city.

Hales originally supported the project but withdrew his support after the PSC vote saying the project does not meet Portland's environmental standards. Port of Portland Executive Director Bill Wyatt has criticized Hales for changing its mind, saying the reasoning sends a bad message to other businesses thinking about locating here.

"It's disappointing news, because the loss of an investment of this magnitude would mean forfeited tax revenue, lost jobs and business opportunity, and negative implications for land use, trade policy and business recruitment efforts," Wyatt says of the opinion.