Schumer calls for renewed talks over Howland Hook transfer
U.S. Sen. Charles E. Schumer is calling for resumption of negotiations between the Port Authority of New York and New Jersey and the parent company of Orient Overseas Container Line over terms of its planned transfer of the New York Container Terminal at Howland Hook to the Ontario Teachers Pension Plan Board.
It’s the second time this year that the New York senator has intervened in port authority negotiations with tenants over terms of a lease transfer.
In February, Schumer, along with New Jersey Sen. Robert Menendez, pressed the port authority to strike a deal with Dubai Ports World over terms of the transfer of the Port Newark Container Terminal (PNCT) in New Jersey to an affiliate of the AIG insurance company. The two senators, who were leaders in the battle to prevent DP World from owning U.S. port terminals because of security concerns, claimed the port authority was asking for an excessive amount of money to approve the lease transfer, and the port authority subsequently reduced the amount of money it requested to approve the lease transfer.
In the current dispute, with no concerns about security at issue, Schumer said that he was calling for revival of negotiations because “the Staten Island economy and the New York Harbor depend too much on Howland Hook for this deal to fall prey to hedging, ducking and negotiating as usual,” Schumer said. “With so many jobs and so much development at risk, it is imperative that all parties get back to the bargaining table and make the prudent, long-term decision to see this deal through.
“If the Howland Hook deal is allowed to fall through, Orient Overseas will likely retain the terminal for the 12-year balance of its lease, curtailing development on the rapidly expanding terminal,” he said. OOCL's parent company is Orient Overseas International Ltd.
Jim Devine, chief executive officer of NYCT, said his company had asked for Schumer to intervene in the dispute.
Port authority spokesman Steve Coleman said the agency was willing to continue negotiations, saying representatives from the terminal had walked out on talks earlier this month.
The agency contends the $37 million consent fee that it is requested to approve the lease transfer is similar to what it requested in the PNCT deal — about one-third of what it spent in capital improvements at the terminal.
Devine agrees the port authority has invested about $111 million in the NYCT, but “that is the port authority’s job — to enhance the port.”
He compared the port authority's efforts to profit from the lease transfer to a town wanting some of the profit from the sale of house because it built a road near it.
He also contends the port authority’s demands do not take into account the fact that the PNCT was larger than the Howland Hook facility, and had more time left on its lease than NYCT.
“If you want to talk about us presenting more money, then let’s talk about lease extension and some other things and we will guarantee hundreds of millions of dollars,” Devine said.
For example, he said the pension fund is willing to invest to expand the privately owned Global Marine terminal into the port authority’s adjacent Auto Marine Terminal in Jersey City.
“That is what port authority should be focusing on, how do we enhance the carrying capacity of this harbor, particularly in light of the financial straits that the port authority is in with most of the money going into lower Manhattan. They need deep-pocketed people to make those enhancements and the Ontario teachers is prepared to commit to it,” he said. “It seems like the perfect marriage if we can get by this rather nasty dispute.”