Homer Alaska - News

Story last updated at 4:16 PM on Wednesday, April 25, 2012

Former council member alleges city treats his company unfairly

Hogan files complaint with Federal Maritime Commission

By Michael Armstrong
Staff Writer

Former Homer City Council member Kevin Hogan on April 10 filed the legal action he'd hinted at in saying why he chose to resign earlier from the council. In a complaint filed with the Federal Maritime Commission, Hogan's seafood processing, the Auction Block Company, alleges that the city of Homer treated his company unfairly and violates rule 64 of the Shipping Act of 1984.

That section says that "A marine terminal operator may not ... (2) give any undue or unreasonable preference or advantage or impose any undue or unreasonable prejudice or disadvantage with respect to any person; or (3) unreasonably refuse to deal or negotiate."

In his five-page complaint, Hogan alleges that in 1979 the city signed a lease with Icicle Seafoods giving it a break on port and harbor fees for Fish Dock crane charges and use of the premises. That lease lets Icicle use two cranes without charge for up to 1,858 hours a year and at a rate of $15 an hour over that. Icicle also can use, without charge, a covered shed on the Fish Dock. Use of the crane is worth at least $10,000 and use of the premises worth about $31,000 a year, Hogan alleges.

The Auction Block pays higher fees and doesn't get that break, Hogan alleged. Icicle also is exempt from other fees, such as overcharges for the crane based on 15-minute increments. Icicle also is exempt from wharfage rates. Hogan alleges that Auction Block paid a difference of about $47,000 from the years 2009 to 2012. If not treated differently, Auction Block could have purchased more fish and realized revenues of up to $350,000, he wrote. In total, Hogan alleges that because Icicle got a break in its fees, Auction Block suffered damages of about $680,000. He alleges that the lease with Icicle violates the Shipping Act of 1984 and seeks reparations and damages in that amount, plus interest and attorney's fees, for the unlawful conduct.

Hogan said that on advice of his attorney he could not comment on the complaint.

City Manager Walt Wrede said he could not comment on the city's legal response to the complaint. Wrede did acknowledge that the basic facts of Hogan's complaint alleging that Icicle got a break on fees is true. Wrede noted the lease with Icicle was set up as an incentive in the late 1970s to keep Icicle doing business in Homer. Icicle operated a fish processing plant in Homer until it burned in a catastrophic fire in July 1998 that shut down the Homer Spit for a day. Icicle has never rebuilt its Homer plant. Although Icicle buys fish at the Homer docks, it now transports fish delivered here to Seward for processing. The loss of processed fish also means a loss to Homer in revenues from state ex-vessel fish taxes.

Michael Armstrong can be reached at michael.armstrong@homernews.com.