New Seattle Shellfish Geoduck Lease Terms: 50% of Gross Revenues to Tideland Owner



Tidelands are more valuable than owners realize

 

50% to the tideland owner

A Mason County tideland owner and Seattle Shellfish have created a new lease structure in which the tideland owner will receive 50% of the gross revenues from geoduck cultivated/harvested on his tidelands. He will be responsible for cultivation costs up to harvest time, but apparently not responsible for paying them until after harvesting. From the lease:

2. Lessee shall pay as rent an amount equal to 50% of Lessee's gross sales on all product harvested from the leased premises. Lessor is responsible for all costs of cultivation of the planted geoduck until harvest, such costs to be netted from the rent payable on product harvested. The Lessee shall furnish a monthly statement to the Lessor that shall indicate the total pounds and gross sales harvested that month. The Lessee shall pay Lessor on a quarterly basis by the 15th of the month, following the end of the quarter. The first quarter shall be January through March, second quarter shall be April through June, third quarter shall be July through September and the fourth quarter shall be October through December.

10% raised to 15%
In another lease agreement recently signed by Seattle Shellfish whose terms were extended, the percentage paid to the tideland owner was raised to 15% from the originally agreed to 10%. From that lease:

2. Lessee shall pay as rent $1,000 per planted acre, per year, rounded to the nearest quarter acre plus an amount equal to 15% of the gross revenue on all geoduck clams harvested from the subject property.

Another tideland owner cancels lease arrangement
On the other end, another Mason County tideland owner has chosen to end their relationship with Seattle Shellfish. The reasons are unknown but the lease which had been extended to 2016 has been cancelled.

Tidelands are more valuable than you know - don't ask them what they'll pay, tell them what you want.
Shellfish operators are out of tidelands to develop and are now dependent on private, state and county owned tidelands for production. Those entities should be aware of how valuable those tidelands are before simply accepting what had been an industry standard of 10% of gross revenues. There are those already in lease arrangements who have gone back to the operators and demanded, successfully, higher payments. If you are approached, don't ask them what they'll pay, tell them what you want - preferably your tidelands left undeveloped.