Two new proposals for Va. Terminals
Two additional proposals have been made to take over operations of Virginia Port Authority (VPA) container terminals.
Carlyle Group, the Washington-based private equity company, and a partnership between Seattle-based Carrix Inc. and Goldman Sachs, have made proposals to compete with an offer submitted in March by CenterPoint Properties, according to VPA spokesman Joe Harris.
Carrix is a joint venture between Goldman Sachs Infrastructure Partners and the Smith-Hemingway family.
Neither company would release details on their plans. The VPA said once the proposals have been reviewed by the State Secretary of Transportation and have been found to have the necessary requirements for further consideration, the proposals will be made available to the public. The state has said it could take another year or more to make a final decision on privatization. It is not obligated to accept any of the proposals.
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Bob Watters, a spokesman for Carrix, said his firm believed its offer is superior, in part, because it combined the terminal operating experience of Carrix’s subsidiary Stevedoring Services of America and the financial resources and management expertise of Goldman Sachs.
Christopher Ullman, director of global communications at Carlyle, said the company had submitted a conceptual proposal to invest jointly with the Virginia Port Authority in the terminals.
Carlyle has no marine terminal operations, but like CenterPoint, it is planning to work with Virginia International Terminals, the VPA's non-stock, non-profit operating company.
CenterPoint Properties, a Chicago-area warehousing company that is almost entirely owned by the California Public Employees’ Retirement System (Calpers), made its unsolicited bid in March to take over the marine terminals that the VPA has in Norfolk, Portsmouth and Newport News, as well as an inland intermodal terminal in Front Royal, Va., for 60 years. It also would acquire the right to develop a new container terminal at Craney Island, the port’s dredge spoil disposal site.
CenterPoint made the proposal March 12 under Virginia’s Public-Private Transportation Act of 1995 that allows private entities to enter into agreements to construct, improve, maintain and operate transportation facilities.
CenterPoint has said its proposal would provide $8.9 billion in total value to the commonwealth over the life of the concession, or $3.5 billion in today’s dollars.
The state invited competing offers, which were due Monday morning.
CenterPoint, which is 97-percent-owned by Calpers, has developed or is the process of developing eight or nine inland intermodal ports, in addition to extensive warehouse holdings. Its flagship logistics park is in Joliet, Ill., and it is building a $325 million logistics park in the Hampton Roads area city of Suffolk, Va.
The country’s largest stevedoring company, Ports America, did not bid on the project. Peter Stone, its chief commercial officer, explained that while the company reviews all opportunities in the United States, “but at this time we view Baltimore as our priority.”
Ports America, together with its owner Highstar Capital, is vying against a partnership of NYK subsidiary Ceres Terminals and Alinda Capital Partners to enter into a public-private partnership agreement with the Maryland Port Administration to operate the Seagirt Marine Terminal in Baltimore. Ports America, or its predecessor companies, has operated Seagirt since it opened in 1990.
Because of their proximity, Baltimore and Virginia often compete with each other for mid-Atlantic calls by container carriers.
Stone noted that the offers by Carlyle and Goldman Sachs-Carrix in Virginia, reflect the continuing interest in marine terminals by financial investors. The bids for the Virginia terminals come on the heels of an award of a 50-year concession by the Port of Oakland to Ports America and Highstar Capital to operate a portion of the port in return for $500 million in investment by 2020.
Whichever entity operates the VPA terminals in Hampton Roads going forward would face stiff competition not only from Baltimore, but also from APM Terminals, the Maersk Line affiliate that opened a $450 million private terminal in 2007 in Portsmouth, Va.
In addition to its new logistics park in Suffolk, CenterPoint hopes to capitalize on improvements being made to railroads, including the Norfolk Southern’s Heartland Corridor, which should speed the movement of doublestack container trains from Hampton Roads to major warehouse distribution centers in the Midwest, including those that it operates.
Both Hampton Roads and Baltimore, with deep channels dredged to accommodate the large dry bulk ships that call at their coal docks, and rail connections to he Midwest, could benefit when larger ships moving cargo from Asia start using the expanded Panama Canal. ' Chris Dupin and Eric Kulisch