Declining business and a shift away from river transportation by major industry caused the Warren County Port Commission to settle for lower guaranteed annual rent from Kinder-Morgan Bulk Terminals Inc., commission chairman Johnny Moss said Tuesday.

Negotiations with the primary handler of dry bulk at the Port of Vicksburg went back and forth much of the year since the previous lease expired at the end of 2004, with the company wanting to dramatically lower its $225,000 annual base rent paid to the county for moving dry cargo through the port.

&#8220It’s because output at the port has gone down and Kinder-Morgan’s income has gone down,” Moss said, adding that the company estimated it lost $90,000 in 2004 operating at the port.

In October, commissioners received a letter from the company requesting $40,000 annual rent and a reduction of sales-based commission from 10 percent to 2 percent.

Until this year, that amount was to be paid if the company’s gross terminal sales fell between $1 million and $1.4 million.

The company’s income had not reached that level in at least four years, dating back before the acquisition by Kinder-Morgan of the port’s former handler, River Transportation, in 2001, Moss said.

Under the new lease terms, effective for one year beginning Jan. 1, 2006, Kinder-Morgan agreed to pay a base rent of $135,000 annually. The sales-based commission was dropped altogether.

Port commissioners won some key concessions from the company, including providing the five-member board with monthly financial reports, more information on its marketing and recruiting attempts, and the right to name the terms of any contract extensions.

The overall environment of using the river to transport dry goods through the port has changed since International Paper began using other methods to ship its product, primarily rail and road.

&#8220It’s still cheaper for companies to truck things to Jackson after unloading it in New Orleans than to unload in Vicksburg,” Moss said.

Currently, the port moves a lot of steel, fertilizer and corn, something Moss said the port is not truly designed to handle.

&#8220It was a pretty quick shift by IP,” Moss said.

Moss spoke of the coming year as a critical one for the port, one that may end in the port’s choosing to end its relationship with Kinder-Morgan and bid out work the company currently provides.

Even though commissioners believe the company views Vicksburg as one of its smaller, less lucrative operations, Kinder-Morgan was given another shot because of its long reach in the business.

&#8220We could have advertised for it, but we stayed with them because of their connections and experience. We may have come in lower with local people, but we didn’t want to take that chance,” Moss said.

The Kinder-Morgan family of companies includes three separate, publicly-traded entities on the New York Stock Exchange – Kinder-Morgan Inc., Kinder-Morgan Energy Partners L.P., and Kinder-Morgan Management LLC.

Kinder-Morgan Terminals is a subsidiary of Kinder-Morgan Energy Partners, L.P. and is the largest independent terminal operator in the United States. It handles in excess of 60 million tons of dry-bulk commodities annually at approximately 145 terminals. Combined, Kinder-Morgan Inc. and its Energy Partners subsidiary have an enterprise value of approximately $30 billion.

Shares of Kinder-Morgan Energy Partners L.P. sold for $48.40 at the close of business Tuesday, down just over 1 percent from Monday.

Eighteen of those are dry bulk terminals in the company’s Lower River Region, comprising Mississippi, Louisiana, Alabama, Arkansas, Tennessee and one in Port Arthur, Texas.

The terminal operated at the Port of Vicksburg sits on 11 acres and has 120,000 square feet of warehouse space, among the smallest that Kinder-Morgan operates in the region.