CRESCENT BAR - The residents of Crescent Bar Island scored a major victory recently when the Port of Quincy settled and agreed to testify, if necessary, to facts that could be damaging to Grant PUD in its defense against a lawsuit by the residents.

Among other things to which the Port agrees is its belief that the PUD was less than truthful when it ordered the Port in 2010 to evict the islanders. The Port said it learned later the Federal Energy Regulatory Commission (FERC) had not ordered the PUD to evict the islanders.

The island is under the control of the PUD. It leased the entire property to the Port in 1962 for the purposes of development. The Port leased the island to Crescent Bar Inc., and CBI leased lots to individuals. Eviction notices went out in 2010. The islanders were to be gone in 2012.

The islanders didn't go. Instead they bought CBI and filed a lawsuit in 2011 to force the PUD and Port to honor the leases to 2052. In the settlement agreement, the Port makes it clear the residents have leases to at least 2023.

"They're on our side now," CBI Counsel Dale Foreman said.

Utility district officials issued a statement saying they were aware a settlement was reached. "This results in no change to the status of our case before the federal courts," the statement said.

"We believe that there are no changes to the fact this is public land. Our desire has been and continue to be that public access and recreation opportunities are restored to public lands," the statement said.

Federal Judge Justin L. Quackenbush, of Spokane, held a hearing on Aug. 22, on a motion for summary judgment filed by the islanders. He did not make a decision. He suggested to the PUD and the people go to binding arbitration with no preconditions, according to a CBI spokesman.

Quackenbush has said in the past he believes the PUD agreed to 2023 and made promises regarding 2052.

The port's decision to settle hinged on several facts to which it stipulated. It agreed that:

• On March 13, 1970, the port entered into a lease with a predecessor to CBI (PCBI). The lease was to terminate March 31, 2012.
• On Feb. 8, 1973, the Port and PCBI amended the March 13, 1970, lease to extend the term of the lease to 50 years from March 1, 1973 to Feb. 28, 2023.
• In the event of any conflict between the March 13, 1970 lease and the Feb. 8, 1973 lease, the terms of the Feb. 8, 1973 lease were to control.
• On Feb. 26, 1973, by Resolution No. 2927, the PUD agreed to submit to FERC a request for an extension of the June 5, 1962, lease to Feb. 28, 2023.
• The Port learned that, in the course of the PUD's relicensing of the Priest Rapids Hydroelectric Project, PUD representatives stated to lot and condominium owners the lease would be extended for the term of the expected new license.
• On April 26, 2010, the PUD commissioners voted to allow the 1979 lease to expire in 2012 without ever having sought FERC approval of an extension of the term, as promised in the 1979 lease and throughout the FERC relicensing process.
• A port commissioner and the port's attorney met with PUD officials to determine, among other things, the reasons behind the PUD's termination of the 1979 lease.

Referencing a March 10, 2010, letter from FERC and alleged telephone conversations with FERC staff, PUD officials told the port its decision not to extend or provide new private leases at Crescent Bar Island had been required by FERC.

• On May 18, 2010, partly in reliance on the PUD's statements that FERC required termination of private uses on Crescent Bar Island in 2012, the Port issued a termination notice to CBI.
• On April 17, 2014, FERC's Office of General Counsel issued a letter addressed to CBI counsel with the following statement by general counsel for FERC: "The PUD was not required to evict your [CBI's] clients from Crescent Bar Island."
• The PUD's statements regarding FERC requirements affected the manner in which the port addressed the claims of plaintiffs and CBI before and during the course of this lawsuit. The port incurred hundreds of thousands of dollars in legal fees and expenses defending plaintiffs' claims, partially as a consequence of the statements by the PUD the port now believes were not accurate.
• The PUD was and is required to seek FERC approval of the extension of the 1979 lease to Feb. 28, 2023, or in the alternative, demand the PUD provide new leases that allow island residents, including lot and condominium owners and CBI, to remain on the leased property at least until February 28, 2023.
• In the event this matter goes to trial, the port, its commissioners, and its attorneys agree they will testify truthfully regarding the facts of the case.

Herald staff writer Cheryl Schweizer contributed to this report.