Joyson seeks new lease from port of Moses Lake
For the Basin Business Journal | December 15, 2022 1:00 AM
MOSES LAKE — Airbag explosive maker Joyson Safety Systems is asking the Port of Moses Lake for a new lease that would allow the company to sell its assets to a potential investor without needing port review, according to an attorney for the Port of Moses Lake.
Seth Woolson, an attorney for the Bellingham-based law firm of Chmelik, Sitkin and Davis — the firm that represents the port — and port Director of Real Estate Carol Crapson told commissioners at a regular meeting Monday morning that the Auburn Hills, Michigan-based manufacturer is considering selling its physical assets to a real estate management company in order to have cash on hand to improve and expand current operations.
“They have assets in different states, and they want to package this to make it attractive to investors,” Crapson said.
In turn, Woolson said the management company would lease the buildings back to Joyson. In the process, however, the management company, and not Joyson Safety Systems, would become the port’s tenant.
“It’s a bit of an unusual situation,” Woolson told commissioners. “The tenant becomes the investment company, and then there’s an unknown entity between you and the tenant who is not invested in the same way that Joyson is.”
Joyson Safety Systems was created when China-based Ningbo Joyson Electronics acquired the assets of Takata Corporation, which was forced into bankruptcy in 2017 following a recall of nearly 70 million defective airbags that could explode when deployed.
No one from Joyson Safety Systems was present at the meeting, and Joyson did not comment prior to press time. According to information from the Port of Moses Lake, Joyson owns its buildings but leases 282 acres of ground on which the buildings are located. Joyson agreed to pay the port roughly $18,000 per month under its current lease, which is set to expire at the end of 2031.
Crapson said in order to make the buildings acceptable as an investment property, Joyson is looking for a new lease that would extend past 2041. A typical port lease would be for 50 years, with three 10-year extension options, Crapson said.
Commissioners agreed they were not opposed to the idea, but all expressed concern about giving away the ability to review who Joyson might sell its buildings to and whether any investor would be involved in Moses Lake for the long haul.
“Basically, Joyson gets to choose who leases our ground,” said Commissioner Stroud Kunkle.
“I’m not in favor of signing open-ended leases, and I’m concerned that they would take the money and leave empty buildings,” said Commissioner Darrin Jackson.
However, Port Finance Director Kim DeTrolio told commissioners that there is another possibility to consider.
“If they are unable to raise capital, they could vacate the buildings. Will Joyson be able to stay in business without the ability to raise capital? The buildings will be vacant anyway,” she said.
“Get us a contract so we can read a contract,” Jackson asked attorney Woolson.
Charles H. Featherstone can be reached at email@example.com.