Port Arthur City Council voted to approve a ground-lease agreement with Diligent Offshore Services LLC for tracts on Pleasure Island after a lengthy, occasionally contentious discussion and executive session on May 20.

The agreement covers multiple parcels proposed for development of wind and solar generation, a substation and related support facilities. The issue drew sustained public and private negotiation: Diligent’s representative, Harry Crawford, told the council the company had submitted a letter of intent and sought an exclusive lease arrangement and revenue-sharing terms, and described repeated, slow exchanges with the city’s outside counsel.

“We’ve attempted three times to try to settle any issue,” Harry Crawford said during the May 20 meeting. Crawford said the company had proposed easement and subleasing language intended to reflect “fairness and market norm” and said some proposed lease provisions as drafted by the city would make the project “nonfinancial.” Outside counsel for the city told the council that, after a memorandum from Diligent’s side that included a threat of litigation, the city’s lawyer requested that communications be in writing.

Council members pressed both sides about public disclosure and negotiation process. Council discussion in open session and in executive session focused on whether the city had the legal ability to negotiate an exclusive real-estate lease without a competitive RFQ (city staff and Diligent cited Chapter 252 of the Texas Local Government Code), and on draft lease terms about easement termination and sublease revenue share.

After the closed session, the council voted by roll call to approve the lease. The recorded roll call was: Councilwoman Helene Beckham — no; Mayor Pro Tem Colquay Doucette — yes; Councilman William Frank — yes; Councilwoman Hamilton Everfield — no; Councilmember Kinlaw — no; Councilman Lewis — yes; Mayor Thurman Bill Barty — yes. That tally is four yes, three no; the measure passed.

Council members who opposed the measure cited the pace of negotiations and public concern about confidential details being posted to the public record; supporters said the proposed project could be a significant local economic investment. City and Diligent representatives told the council they expected additional written redlines and were prepared to continue fine-tuning details through the city attorney and, if necessary, executive session.

What’s next: the approved lease moves forward under the terms approved May 20. City staff and Diligent representatives indicated they expect follow-up redlines and continued engagement; because parts of the negotiations were handled in executive session, portions of the final lease language were not read aloud in open session.

Ending — Context and caution: The negotiations were contentious at times, with Diligent’s representatives and the city’s outside counsel exchanging written redlines and legal positions. The council’s narrow vote shows lingering division among elected officials about the city’s approach to negotiating large, potentially transformational industrial leases.