Brooklyn’s Pier 7 may go from cocoa to beer
A beer distributor that was recently awarded a lease on a pier in Brooklyn, N.Y., wants to make the most of its waterfront location — but that may depend on the future of nearby Red Hook Container Terminal.
Last month the board of commissioners of the Port Authority of New York and New Jersey authorized a lease with Windmill Distributing Co. L.P., which does business as Phoenix Beverages Inc., for the use of Pier 7 at the Brooklyn-Port Authority Marine Terminal. The lease provides for the use 269,600 square feet of warehouse space and 185,315 square feet of open area on Pier 7 for a 15-year term with an option to extend the lease for a five-year period.
Phoenix supplies 14 New York counties in New York City and lower New York State with beers such as Heineken, Amstel Light, Guinness and Foster's.
John Crowley, vice president at Phoenix, said his company imports about 8,000 forty foot containers of beer annually, and would like to move as many as possible by water — either directly on services calling at Red Hook, or by barge from terminals in Newark-Elizabeth or Howland Hook. That’s because moving containers to Brooklyn from New Jersey has become extremely difficult since 2001, because of the closure of the Holland Tunnel after the Sept. 11 2001 terrorist attacks, and prohibitions on cross-town truck traffic in midtown Manhattan. That leaves only longer routes across the Verrazano Narrows Bridge and George Washington Bridge.
Crowley also notes that containers can be loaded with about five tons more of product in Europe than U.S. highway regulations allow. Phoenix removes beer at a facility in Port Newark, but its new waterfront location would allow it to move containers on cross-harbor barges.
The port authority said the minimal guaranteed aggregate rental over the 15 years period would be $34.5 million, with the possibility that it could be as much as $40.2 million. In addition, Phoenix would be obligated, at its sole cost and expense, to make capital improvements to Pier 7, estimated at $3.4 million.
Before suds come to Pier 7, however, the port authority would have to resolve a dispute it has with the current tenant at the pier, American Warehousing of New York, which stores cocoa. That dispute goes back to 2004.
In response to two actions the port authority filed against the tenant with the Civil Court of the City of New York — one in July 2004 concerning the southern portion of Pier 7 and one in August 2004 concerning the northern portion of Pier 7 — American Warehousing filed two separate complaints against the port authority with the Federal Maritime Commission.
The port authority said an FMC administrative law judge made his initial decision holding that the port authority did not violate the Shipping Act of 1984 by declining to enter into a long-term lease with American Warehousing. The authority expects a decision from the FMC by July 5.
Under the proposed lease, Phoenix has the right to terminate the lease if the FMC does not rule in favor of the port authority by July 6.
