Port plan worth $3.5B
Published 8:34 am Friday, March 13, 2009
An Illinois-based company developing 900 acres on U.S. Route 58 in Suffolk hopes to spend billions of dollars over the next 60 years on a partnership with the region’s ports.
CenterPoint Properties delivered its proposal to partner with the state and the Virginia Port Authority to state officials Thursday, said CenterPoint President Paul Fisher.
At a press conference in Newport News, Fisher outlined the company’s proposal to pair its capital investments and partnerships with the strategic placement of Virginia’s ports in Norfolk, Portsmouth, Newport News and the inland port in Front Royal.
“We want to exploit CenterPoint’s ability to attract port customers,” Fisher said.
Under the agreement, CenterPoint Properties would partner with the Virginia Port Authority for 60 years and acquire Virginia International Terminals, Inc., the private company that manages the ports, as a subsidiary. Virginia International Terminals then would be employed, through an incentive-based contract, to operate the facility.
Fisher stressed that the partnership would involve what is effectively a long-term lease, rather than a sale. Therefore, the state would retain ownership of the ports.
The proposal, worth $3.5 billion in today’s dollars, includes funds for the development of Craney Island, a profit-sharing agreement with the state, annual payments to the host communities and funds to modernize the ports.
Fisher said that inflation would make the agreement worth $9 billion over the course of its 60-year lifespan.
He added that CenterPoint first became interested in the ports during the process of acquiring land for the multi-faceted distribution center in Suffolk.
“We saw that one of the things the port lacked were distribution centers affiliated with the port,” Fisher said.
Fisher noted that Hampton Roads is connected via a Norfolk Southern rail line to CenterPoint’s hometown of Chicago, where CenterPoint owns several more distribution centers capable of handling cargo from the Virginia ports.
“With the freight connectivity to Chicago, (the ports) will end up with more freight,” Fisher noted. “More boxes mean more jobs, more economic activity.”
Neil Doyle, a CenterPoint vice president, said that the port arrangement would enhance the productivity of the Suffolk intermodal center.
“The Suffolk park stands on its own, but this will make Suffolk greater,” Doyle said.
CenterPoint officials stressed that now is the time to begin the process of attempting to partner with the ports.
“Money’s in short supply right now,” Fisher said. “We think it’s a great time, an imperative time, to think about public/private investment opportunities.”
The process of vetting the offer begins with the state considering whether it wants to partner with a private company for the ports. If it does, the state will put forward CenterPoint’s proposal, and others will be invited to submit competing proposals. Formal notices and public hearings on the proposals would then be held before one, if any, is chosen.
“We’re hopeful our offer is accepted,” Fisher said. “We want to start as soon as we can.”