'Tough Times Ahead' for Port; Economic Realities Present Problems for Growth Plans

By Bauerlein, David | The Florida Times Union, June 30, 2010 | Go to article overview

'Tough Times Ahead' for Port; Economic Realities Present Problems for Growth Plans


Bauerlein, David, The Florida Times Union


Byline: DAVID BAUERLEIN

After Monday's meeting of the Jacksonville Port Authority board, Chairman David Kulik talked for a few minutes with state Rep. Lake Ray about the challenges facing JaxPort as it pushes to become one of the East Coast's biggest ports.

"Tough times ahead," Kulik said, summing up the conversation.

That sentiment captures the port authority's outlook as it enters a crucial phase in the quest to become an international gateway like ports in Savannah, Ga., and New York City.

JaxPort officials say the recession has kept revenue from growing at a rate the port authority was counting on, leaving it with less money on hand. State spending likewise is tight. At the federal level, competition has always been fierce for the big-dollar construction projects like the $500 million harbor deepening Jacksonville would need to accommodate the jumbo-sized cargo vessels that will soon be heading through the Panama Canal.

But JaxPort officials say they're not backing off from their expansion goals.

"We are on the right track but the locomotive is not moving as fast as I'd like," said JaxPort Chief Executive Officer Rick Ferrin. "That is simply a function of the world economy."

The most pressing need is fixing navigation obstacles at Mile Point, which is the area where the Intracoastal Waterway intersects the ship channel. The force of the currents limits passage of big cargo vessels to two 41/2-hour periods each day.

The port authority pledged to get that navigational problem corrected when JaxPort convinced Mitsui O.S.K. Lines to build a cargo terminal operated by subsidiary TraPac. Kulik said the Mile Point restriction is a "real and present threat" to Jacksonville attracting cargo in competition with other Southeast ports.

The port authority, working with the corps, originally wanted to get the $60 million project done by the end of 2011. But the Army Corps of Engineers extended the Mile Point study to get more information about how much future cargo traffic would go through Jacksonville.

JaxPort wants to fast-track the review by retroactively adding Mile Point to a previously completed report by the corps that resulted in deepening the harbor to 40 feet.

The corps is considering JaxPort's request, said Barry Vorse, spokesman for the corps.

"At the moment, we're seeing what we're allowed to do and looking at the options, and we'll go forward from there," he said Tuesday.

If the port's strategy succeeds, Ferrin said the authority would borrow $60 million to pay for Mile Point. JaxPort would seek $39 million in reimbursement from the federal government in future years. That would put more debt on the JaxPort's books in the short term, but it would eliminate the usual wait for federal funding before construction starts.

JaxPort isn't alone in feeling the squeeze from the recession. For example, the Alabama State Port Authority doubled its debt since 2006 to expand the Port of Mobile and get an inside track on the expected boom in cargo coming through a widened Panama Canal in 2014. But Fitch Ratings downgraded that port authority's bond rating to BBB+ from A- with concerns about the large new buildings generating enough revenue for the port.

Fitch Ratings recently maintained an A rating for JaxPort's bonds. …

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