State Rep. David Brock Smith, R-Port Orford, testified last Wednesday before the House Committee on Economic Development proposing the state use $1.6 million in Lottery money for grants or loans to rebuild the Port Orford cannery.

House Bill 2366 is likely headed to the Ways and Means Committee next.

The cannery is 80 years old and the current tenant, Nor-Cal, cannot even work inside it, he said. A new cannery building would have room for Nor-Cal, two other canneries, a seaweed cultivation center, research and lab space for Oregon State University and a seawater delivery system.

“The cannery redevelopment project will bring a diverse and wonderful opportunity to not only community of Port Orford but the Port of Port Orford,” Smith said in a brief presentation. “Port Orford is a very small community, but it’s done everything right.”

He cited that the city of 1,200 people, headed by Red Fish Community, created the first marine reserve on the Oregon Coast and that the fishing industry there accounts for 35 percent of the local economy.

Smith and Port Orford Commissioner Tom Calvanese said the tiny town is home to one of the worst-performing school district in the country and has one of the state’s highest unemployment rates, but that the port is critical to its success.

“Port Orford relies very heavily on the port’s economic activity,” Calvanese said. “The port is highly productive. Per capita, it’s one of the most productive ports in Oregon.”

Its fishermen bring in $3 million to $5 million in high-value seafood that contributes $12 million in economic activity statewide. Those values have done nothing but increase over the past 40 years, with the four highest values seen in the past decade.

The home fleet boasts 30 vessels, Calvanese said. “More than 2,500 trips to the ocean are taken from it every year, including 100 recreation and charter vessels and 150 research vessels.

“As the economy and marine ecology changes around us, we’ve responded by adapting,” Calvanese said. “We’ve become stronger.”

Recreation — kayaking, scuba, snorkeling and bike tours among them — has expanded, the Army Corps of Engineers is spending $6.5 million to repair its breakwater and next month, the port plans to apply for ODOT funding to upgrade its cranes that lift boats out of the water to be docked on shore every night.

“Those came off a World War II Navy supply vessel,” Calvanese said of the current equipment. “They’re ready to be replaced. As the boats get bigger, the cranes are under new stress. We’re seeing an increase in the failure of equipment; it’s a severe safety issue, a severe risk issue for damage. We have to get on top of that.”

Calvanese said the port has a pre-proposal into the EDA for part of the $3 million match. Other funding would come from a low-interest loan through the Ford Family Foundation.

The match, he said, would come from grant funds from Regional Infrastructure Funds, and $200,000 from the Wild Rivers Coast Alliance and a $700,000 low-interest loan from the Ford Family Foundation.

“That’s the skin we’re putting in the game,” he said. “We expect that with your help, we can pull the trigger and get this project off the ground. We’re out of time. The original structure, we had to vacate. Our current tenant does not have a roof over their head. We’re under the gun right now. The future of our port really depends on this.”

Already he has Nor-Cal and OSU committed to space in a new building. Others interested include Oregon Sea Farms, and two smaller companies, Port Orford Sustainable and Watson seafoods have expressed interest. Together, they would represent about 25 employees.

“The majority of the fleet depends on those processors,” Calvanese said, “If we don’t have them, the fleet starts looking for another place to live.”