Consent to franchise transfer from Zenith Energy Terminals Holdings LLC to ISQ Springer Holdings, LLC (amend Ordinance 188554)

The City of Portland ordains.

Section 1. The Council finds:

1. On August 16, 2017, Council approved Ordinance No. 188554 granting a franchise to LCP Oregon Holdings, LLC (LCPOH) for its pipeline system to transport petroleum and/or petroleum products within a limited portion of City streets.
2. On September 5, 2018, Council approved Ordinance No. 189149 amending that franchise to clarify that LCPOH's pipeline system can be used to transport renewable fuels and to allow the transportation of liquid intermediates.
3. On November 21, 2018, Council approved Ordinance No. 189255 transferring the franchise agreement held by LCPOH to Zenith Energy Terminals Holdings LLC (Zenith), which had operated LCPOH's pipeline system on its behalf since 2014.
4. On January 7, 2026, the Bureau of Planning and Sustainability (BPS) received a letter indicating that Zenith had agreed to sell its Portland terminal to ISQ Springer Holdings, LLC (ISQ), along with a request from Zenith for consent to transfer Zenith's franchise agreement granted via Ordinance No. 188554, as amended by Ordinance No. 189149 and transferred to Zenith by Ordinance No. 189255, to ISQ.
5. ISQ and Zenith are requesting that the Council consent to the transfer of the franchise agreement from Zenith to ISQ, so that the sale acquisition can close.
6. City Charter Section 10-216 and the franchise agreement require the prior written consent of the City expressed by ordinance to transfer the franchise.
7. The franchise agreement allows the City to inquire into the technical, legal, and financial qualifications of a prospective transferee to accept the transfer.
8. As part of its due diligence review of the requested transfer, staff from the Franchise Utility Program (FUP) within BPS requested and collected information from ISQ that documented ISQ's technical, legal, and financial ability to safely run and operate the facility.
9. ISQ submitted a memorandum to the City outlining its technical, legal, and financial qualifications in support of its request for the franchise transfer, and City staff in the FUP requested additional information regarding ISQ's operations of the facility and information regarding relevant regulatory compliance violations of ISQ and specified affiliates.
10. FUP staff reviewed submitted materials from ISQ before forming their staff recommendation and found the submitted materials demonstrate that ISQ has the technical, legal, and financial expertise and knowledge to safely run and operate the facility. ISQ intends to retain all facility employees that are currently employed by Zenith to maintain technical expertise at the facility post-sale.
11. As a holding company, ISQ owns and operates other energy companies and operates other facilities similar to the Zenith facility. As a result, ISQ has broad experience demonstrating its ability to navigate the legal and regulatory requirements required to safely run the facility and comply with all local, state, and federal laws.
12. Based on its review, staff recommends that Council consent to the transfer of Ordinance No. 188554, as amended by Ordinance No. 189149, and as transferred to Zenith by Ordinance No. 189255, to ISQ.

NOW, THEREFORE, the Council directs:

1. Pursuant to Portland City Charter Section 10-216 and Section 8 of Ordinance No. 188554, consent is hereby given to the transfer of the franchise for Zenith Energy Terminal Holdings LLC's pipeline system under the City streets to ISQ Springer Holdings, LLC.
2. Effective upon the closing of such an acquisition, ISQ Springer Holdings, LLC will be responsible for performing, complying with, and assuming all of the covenants, duties, obligations and liabilities under Ordinance No. 188554, as amended by Ordinance No. 189149, including the provision of insurance and bonds required under the franchise.  Within 30 days after the closing of such an acquisition, ISQ Springer Holdings, LLC shall provide certificates of insurance and bonds, naming ISQ Springer Holdings, LLC and the City as required under Ordinance No. 188554, as amended by Ordinance No. 189149.
3. Within 30 days after the closing of such an acquisition, ISQ Springer Holdings, LLC shall file in the Office of the Auditor of the City of Portland a written acceptance of this ordinance meeting the approval of the City Attorney. Such acceptance shall be unqualified and shall be construed to be an acceptance of all the terms, conditions and restrictions contained in this ordinance and Ordinance No. 188554, as amended by Ordinance No. 189149. A failure on the part of ISQ Springer Holdings, LLC to file such written acceptance within such time shall be deemed a rejection and abandonment, and this ordinance shall thereupon be null and void.