BELLINGHAM - Prospects for the Bellingham Maritime Museum's survival appeared dim Tuesday, March 5, after Port of Bellingham commissioners conducted a closed-door discussion of its lease.

Port Real Estate Director Shirley McFearin, who discussed the museum's lease with commissioners during that closed-door meeting, said commissioners were not receptive to approving the reduced rental rate that museum director Mike Granat says he needs to keep the museum operating.

The museum has been installed in a port-owned warehouse at 800 Cornwall Ave. and pays the port $750 a month for lease of 3,000 square feet. But McFearin said the museum is now using about 25,000 square feet.

Granat said the volunteer-run organization could get by with 15,000 feet but could not afford the current market rate of 25 cents per square foot for that much space.

Unless commissioners change their minds, Granat said he expects to shut down and sell or relocate the museum's collection.

State law makes it difficult for the port to lease public property at below-market rates even to nonprofit groups, McFearin said, adding that the port gets requests for special deals from many other nonprofit groups, and turns them down.

"In order to keep our taxes low, we need to charge fair market value for our properties," McFearin said. "It's my opinion that we will not be in a position to offer a subsidy. ... We just cannot give a gift of public funds."

The 726-square-foot marine life tank at Squalicum Harbor is a different situation, McFearin said. The port owns that space and the equipment in it, and pays Northwest Discovery Project to operate it. McFearin says the port treats this facility as part of the port-owned park system that includes Marine Park in Fairhaven and Zuanich Point Park at Squalicum Harbor.

Port commissioners said a final decision on the maritime museum has not been made.

Commissioner Mike McAuley said he and his two fellow commissioners want more time to study the maritime museum's lease situation. He added that the port needs to develop a policy on leases for museums and similar nonprofit uses.

In late 2012, a similar issue arose with the Heritage Flight Museum when its operators expressed frustration at their inability to get a low-priced lease for a new flight museum at Bellingham International Airport. The flight museum continues to operate in a portion of a privately owned hangar that occupies real estate leased from the port at market rate.

"We don't have an official policy on that sort of use," McAuley said. "In the meantime they (the maritime museum) are just like any other tenant."

McAuley also observed that the maritime museum's backers could make a better case that it benefits the public if it were open more often. It now opens its doors for three hours a week - noon to 3 p.m. on Saturdays.

Commissioner Jim Jorgensen said he too wanted more information on the situation before making any comment.

The maritime museum's exhibits include a PBR vessel built in Bellingham by United Boat Builders. The PBR saw action on the rivers of Vietnam during that conflict.

Also on display is what is billed as the only surviving PACV Hovercraft from the Vietnam War, and a restored World War II Army amphibious vehicle or DUKW.

The name of the park in Fairhaven was corrected on Wednesday, March 6, 2013.

Reach John Stark at 360-715-2274 or john.stark@bellinghamherald.com. Read his politics blog at blogs.bellinghamherald.com/politics or follow him on Twitter at @bhamheraldpolitics.