September 22, 2026
Economic Development
PORT
DATE: September 22, 2026
TO: Mayor Martinez as the President of the Board of the Surplus Property Authority and its Board Members
FROM: Nannette Beacham, Economic Development Director
Charles Gerard, Port Director
Danny Wan, Project Manager III
Lizeht Zepeda, Senior Business Assistance Officer
Kyle Lam, Management Analyst
Subject: Authorization to Negotiate a Lease Agreement with STAX Engineering for Basin 4 at the Point Potrero Marine
Terminal
FINANCIAL IMPACT: The proposed lease agreement with STAX Engineering (STAX) would generate initial base rent of $210,000
annually ($17,500 per month) for the Port Enterprise
Fund beginning in Fiscal Year 2026-27. The proposed
lease would include an initial five-year term with two
additional five-year extension options, for a potential total term of 15 years. Final rent adjustments and other
business terms will be established through lease
negotiations (Account String: 40161080 – 362801) This
item has no impact on the General Fund.
PREVIOUS COUNCIL
ACTION:
None.
STATEMENT OF THE
ISSUE:
City staff released a Request for Proposals for a new
tenant at Basin 4 and is recommending the selection of
the sole respondent, STAX Engineering. The proposed
tenancy would increase use of the property, support the City’s green economy and environmental objectives, help reduce harmful ship emissions throughout the Port of
Richmond, create industrial waterfront employment and
AGENDA
REPORT
September 22, 2026
economic development opportunities, and generate
revenue for the Port Enterprise Fund.
RECOMMENDED ACTION: ADOPT a resolution to AWARD a lease to STAX Engineering for Basin 4 at the Point Potrero Marine
Terminal for use as a maritime emissions control
operations facility and Northern California operational headquarters, with an anticipated commencement date in
November 2026, and AUTHORIZE the executive director
(city manager), or their designee, to negotiate and
execute the lease agreement between the Surplus
Property Authority of the City of Richmond and STAX
Engineering – Economic Development Department
(Charles Gerard 510-829-2253).
DISCUSSION:
Background
Basin 4 is one of five concrete graving basins (dry docks) located at the Point Potrero Marine Terminal (PPMT), at the end of Canal Boulevard. Its history is known as World War II's historical Shipyard Number 3 at the Port of Richmond. Measuring roughly 575 by 100 feet, Basin 4 was built to construct and repair wartime cargo and military vessels. The current Basin 4 occupant lease expires in October 2026.
In July 2026, the Port of Richmond released a Request for Proposals (RFP) for a new tenant at Basin 4. The RFP included the lease, development, and operation of Basin 4 with the objective of activating the property for productive maritime use while generating revenue, supporting economic and workforce development, and advancing the City and Port's environmental objectives.
STAX submitted a proposal dated August 5, 2026, to lease, improve, and operate Basin 4 as its Northern California regional hub for maritime emissions capture and control operations. STAX proposes to use Basin 4 as a base for the berthing, provisioning, maintenance, and dispatch of its emissions capture and control barges serving vessels at the Port of Richmond and elsewhere in the San Francisco Bay Area.
STAX operates barge-based emissions capture and control systems designed to reduce emissions from ocean-going vessels while at berth. California Air Resources Board (CARB) Executive Orders included with STAX's proposal authorize STAX's systems as CARB Approved Emission Control Strategies (CAECS) for regulated vessel categories, including roll-on/roll-off vessels. STAX's system is designed to capture and treat auxiliary-engine exhaust and reduce oxides of nitrogen (NOx), particulate matter (PM), and reactive organic gases (ROG).
September 22, 2026
Proposal Evaluation
A five-member evaluation panel reviewed STAX's proposal based on the following evaluation criteria. The criteria included:
Commercial maritime operations and port experience, including demonstrated maritime emissions reduction technology;
Regulatory approval for CARB At-Berth compliance capability; Financial capacity, including established business in Richmond; Proposed base rent and investment outlook for Basin 4; Expected environmental and community air quality benefits; and Alignment with City of Richmond and Port of Richmond objectives, including economic development, workforce development, and green economy benefits.
All five evaluators determined STAX met requirements in each RFP evaluation category and issued an overall determination of “Meets Requirements”. Based on the evaluation, staff recommends to proceed with negotiation of a lease agreement with STAX for Basin 4.
Proposed Use of Basin 4
Under its proposal, STAX would establish Basin 4 as its Northern California Emissions Control Hub. Basin 4 would function as the fixed operating base from which STAX's emissions-control barges would be berthed between service calls, provisioned, maintained, and dispatched to vessels calling at Richmond and other terminals in the region.
STAX anticipates initially stationing two to three emissions capture and control barges at Basin 4, with the potential to increase the number based on contracted demand.
Supporting upland uses would include crew and dispatch functions, storage of parts and consumables, maintenance staging, parking, security, utilities, and related maritime support activities.
Lease and Proposal Analysis
The Port retained Land Econ Group for an economic market analysis on lease rates at PPMT. Land Econ Group provided a memorandum (Attachment 3) regarding current industrial waterfront market lease rent rates.
Based on its analysis of comparable lease rates and the operational and economic benefits associated with establishing STAX’s Northern California emissions-control hub at Basin 4, Land Econ Group recommended a negotiation range of $16,000 to $18,000 per month, with annual CPI adjustments of between three and five percent. STAX’s proposed initial base rent of $17,500 per month falls within the recommended range.
Proposed Lease Terms
STAX's proposal submission includes the following principal business terms, which would serve as the basis for final lease negotiations:
September 22, 2026
Initial Term: Five years, with anticipated commencement in November 2026. Extension Options: Two additional five-year extension options, potentially providing a total lease term of 15 years.
Base Rent: $210,000 annually, payable monthly at $17,500 per month. Tenant Improvements: Improvements to Basin 4 would be funded by STAX and constructed pursuant to Port-approved plans.
Maintenance: STAX would be responsible for maintaining the premises in a safe, clean, and professional condition.
Investment and Property Improvements
STAX proposes investing approximately $525,000 in improvements to Basin 4 during the first five years of the lease. Proposed improvements include berth and waterside upgrades; utilities; security; crew, dispatch, and office facilities; and environmental, safety, and spill-readiness measures.
Financial Capacity
STAX submitted financial information addressing its ability to undertake the proposed lease and improvements. STAX also submitted an August 5, 2026, financial health attestation from an independent Chief Financial Officer who reviewed recent financial statements, cash flow information, projections, debt obligations, and working-capital metrics. The attestation states that STAX maintains positive operating cash flow and adequate working capital and concludes that the company has the financial capacity to fulfill the obligations contemplated by the Basin 4 RFP without undue financial strain.
Environmental, Community and Workforce Benefits
The proposed lease would support the Port's efforts to reduce emissions associated with ocean-going vessels calling at Richmond terminals. STAX's technology captures vessel exhaust at the source and treats it through its barge-based emissions-control system.
In addition to direct lease revenue to the Port, STAX's proposal identifies potential local economic and workforce benefits associated with establishing its Northern California operating hub in Richmond. STAX projects approximately 125 maritime and technical positions, including barge and marine crew, system operators, maintenance and mechanical technicians, dispatch and operations personnel, and site supervision and regulatory compliance staff. STAX proposes to prioritize local recruitment and work with Richmond-area workforce organizations and training partners.
September 22, 2026
Conclusion
STAX's proposal meets the evaluation criteria established for the lease, development, and operation of Basin 4. The evaluation panel determined that the proposal meets requirements across all evaluated categories. STAX has demonstrated relevant maritime emissions-control experience, CARB regulatory approvals, financial capacity, proposed private investment in Basin 4, and potential environmental, economic, and workforce benefits.
ADOPT a resolution Authorizing the Executive Director, or their designee, to negotiate and execute a lease with STAX that will allow the Port to move forward with activation of Basin 4 while preserving the ability to negotiate final business, operational, environmental, and risk-management terms on behalf of the Surplus Property Authority.
SYNERGISTIC POLICIES:
The proposed transition of Basin 4 supports City Council Strategic Goal Area 2 – Increase Revenue and Improve Economic Development, including:
2.2: Revitalize, attract, and retain existing, small, and new businesses; 2.3: Create or re-envision infrastructure to attract new business and retail, manufacturing, infill development, and new customers for existing Richmond businesses; and
2.5: Support revitalization of the Port.
The proposed transition also supports City Council Strategic Goal Area 6 – Address Shoreline Issues and Ecological Sustainability, including:
6.1: Develop and implement strategies consistent with the Blue and Green New Deal.
DOCUMENTS ATTACHED:
Attachment 1 – Request for Proposals
Attachment 2 – Basin 4 Lease and Office Area Site Map
Attachment 3 – Land Econ Group Basin 4 Memo
Attachment 4 – STAX Engineering Basin 4 Proposal
Attachment 5 – STAX Engineering Financial Health Attestation Attachment 6 – Basin 4 Evaluation Matrix Summary
Attachment 7 – Resolution STAX Basin 4 Lease
Attachment 8 – DRAFT PORT Lease Agreement Basin 4_STAX