Tensions boil over at Port of Fernandina meeting as leaders clash over 'distrust, villains and bankruptcy'

The long-simmering conflict between Ocean Highway and Port Authority commissioners and port operator Relay Terminals escalated sharply Wednesday, with disputes over a controversial warehouse and the port’s operating agreement exposing deep divisions — and raising warnings about potential insolvency.

At the center of the conflict is a 22,000-square-foot fabric warehouse that has been the subject of repeated disputes for more than a year.

Relay Terminals President Ted McNair acknowledged the original placement by the previous port operator was flawed.

“That was a huge mistake,” McNair said.

“If you have a fire in this building … how are people going to get out? You want them jumping into the marsh?” McNair said, citing concerns about limited ingress and egress and conflicts between forklifts and container equipment.

Instead, McNair has pushed for an east-west orientation — a position commissioners have repeatedly rejected.

“I’ve made it very clear… we’re not going to construct the building in north-south arrangement,” he said.

“Just because I disagree … there’s no reason to villainize me,” he said.

“Taking it down and not putting it back up is not an option,” Nelson said. “If we take it down and don’t put it back up, it will never be put back up.”

According to meeting materials, the operator has obtained a demolition permit to disassemble the structure, but reconstruction would require a separate permit and full development review, including engineered, stamped drawings and city approvals.

The warehouse has also exceeded the 180-day threshold for temporary structures, triggering requirements for fire suppression and additional regulatory oversight.

Running parallel to the warehouse fight is a growing dispute over the port’s operating agreement with Relay Terminals — an issue that could carry far greater financial consequences.

The conflict stems from a recent court ruling siding with the Nassau County Property Appraiser that the port may be subject to property taxes because it is operated by a for-profit company. That decision is under appeal.

Port Comptroller Pierre Laporte delivered a stark warning to commissioners.

Under the current valuation framework, the property appraiser is taxing both land and improvements — estimated at roughly $26 million combined — though officials said limiting taxation to improvements alone could significantly reduce liability.

A draft amendment — now in its fifth version — seeks to clarify key provisions, including:

• exclusivity rights,

• access to port business information without nondisclosure agreements,

• revenue-sharing language,

• operational control and invoicing procedures (including Section 6.1),

• and enhanced safety and oversight authority.

The draft MOU would allow Relay Terminals to enter into a third-party service agreement while remitting 10% of gross dockage revenue from that business to the port authority.

It further includes confidentiality provisions restricting disclosure of contract terms — an issue that aligns with commissioners’ concerns about transparency and access to information involving public assets.

But negotiations have stalled.

Even if such approvals were obtained, port attorney Tammi Bach noted that changes cannot be imposed unilaterally.

Commissioners expressed frustration with the continuing impasse.

Meeting materials cited potential liabilities “in the millions” and warned of possible insolvency or receivership if tax obligations are imposed and unpaid.

At the same time, the warehouse dispute — though smaller in scale — has become a symbol of the deteriorating relationship between the port authority and its operator.

With the tax appeal unresolved, the operating agreement in limbo, and the warehouse issue still unsettled, both sides appear locked in positions that could shape the port’s future for years to come.