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Posted Apr 8, 2016, 12:51 AM
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Registered User
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Join Date: May 2012
Location: Metropolitan Detroit
Posts: 712
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This article i came across which focuses on a bill which is being drafted to expand the Detroit - Wayne County Port Authority's ability to invest in commercial port facilities along the Detroit River. Its a bit of a no brainier and the proposed legislation has bipartisan support, the D.W.C.P.A. currently only has the authority to invest in the 3 publicly owned terminals which delivered about 500,000 tons of imports last year. However the privately owned terminals along the Detroit River, which fall under the port authority's oversight but don't directly provide ship or cargo data, typically do about 18 million tons of cargo annually. Being able to coordinate with private entities to improve infrastructure and facilities could prove a boon to industries of all kinds directly and indirectly. Very interesting piece all and all i must say i had a very limited knowledge about the city's shipping industry. Its good to an effort being made, if Detroit is serious about becoming a major logistics hub greater development powers for the port authority are certainly a good idea especially with most cargo being handled by private terminals.
Quote:
Port Authority goals: Change state law, boost water traffic
Detroit-Wayne body backs effort to allow financing aid to private terminals
March 27, 2016
By Bill Shea
Crain's Detroit Business
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The Detroit-Wayne County Port Authority is championing proposed legislation that would allow it to finance privately owned terminal improvements.
The current law permits the state's port authorities to finance only improvements to facilities they own.
John Loftus, executive director of the port authority in Detroit, said allowing financing aid such as loans for private terminals will boost imports and exports from Michigan ports.
"If we can change the law, that might open the door for me to do more to help these companies expand, maintain or improve their operations," he said. "We're very, very limited. That's a great frustration."
The Michigan House Commerce and Trade Committee had a study group working to draft the proposed legislation.
Rep. Wendell Byrd, D-Detroit, is part of that group, and said the goal is to get the bills drafted in coming weeks and through the Legislature during this year's session.
"This is bipartisan, so I don't see any obstacles," he said. "This should create jobs."
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The port authority already has the ability to act as a pass-through agency for economic development projects.
For example, last year it was the needed pass-through for the state Department of Environmental Quality's $2 million grant for the cleanup of the long-idle, 42.5-acre former McLouth Steel Corp. plant site in Gibraltar. The site is being renovated for $53 million into an automotive steel factory by Cleveland-based Ferrous Cal Co., Loftus said.
The port authority isn't pressing the Legislature to allow it to finance projects away from the waterfront, an initiative Loftus' predecessor, John Jamian, pushed in the face of sharp criticism from other economic development groups such as the Detroit Economic Growth Corp., which said the effort was unnecessary competition.
"The objective is to see us as partners in development, not competition," Loftus said.
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Loftus believes the port will see more commercial shipping and recreational vessel visits this year.
The three primary port terminals saw 83 ships last season, the best since the port authority began keeping records in 2006, Loftus said.
They delivered about 500,000 tons of imports last year, the vast majority being industrial steel for automotive and construction use. That's the most general cargo since 2007, Loftus said.
Additionally, there was an uptick in heavy industrial equipment imports, to 19,000 tons last year versus 1,500 in 2014, he said. He attributed the increase to the automakers investing in their plants.
"We anticipate that happening again," Loftus said.
The privately owned terminals along the Detroit River, which fall under the port authority's oversight but don't directly provide ship or cargo data, typically do about 18 million tons of cargo annually.
The port authority itself remains on a tight budget: It has $1.12 million earmarked for its current fiscal year, which ends Oct. 1. Of that, $250,000 comes each from the city and county, and the state provides nearly $500,000. The remainder is from fees.
The authority has six full-time employees, one part-time employee, and one consultant on retainer, Loftus said.
One cost-savings option the authority is considering is the sale of its passenger terminal. The $15 million, 21,000-square-foot ship terminal passenger building, along with a $7.1 million offshore wharf, opened in 2011.
The building's heating and maintenance costs can eat up 15-20 percent of the authority's annual budget, Loftus said. Last year, it cost $178,000 to run the building.
"The option of selling it, leasing it, modifying it, it's always on the table," he said. A wrench in any sale would be federal approval, required because federal money paid for the building.
"There's no clear guidance from feds on how you do that," he said.
Troy-based Continental Services has a contract with the authority to cater events, such as weddings and meetings, at the passenger terminal. The authority gets a commission on each event, which totaled $200,000 last year, Loftus said.
He expects the commission to top that in 2016.
"Anything we can do to bring people into the building, it's a good thing to utilize the structure and generate some revenue," he said.
While events brought 40,000 to the terminal facility last year, ship passengers and water taxi users don't spend time in the building.
"That's what is frustrating about this huge building: Even if used successfully, people don't spend much time in the building itself," Loftus said.
Passenger traffic through the terminal last year was 7,500 people.
"I think we can do better," he said. The authority works to attract Great Lakes cruise ships, along with novelty vessels such as warships and historic sailing vessels.
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The authority also continues to study and test creating a water taxi service that would run from Cobo Center to Belle Isle, with stops in between such as at the Renaissance Center, Loftus said. It runs a similar service during the annual auto races each year on Belle Isle.
Plans for a water taxi between Detroit and Windsor remain stalled because the port authority terminal doesn't have the technology U.S. customs officials said it needs for passenger clearance, Loftus said.
"It's kind of frustrating. Our building is not a port of entry. To get it designated a port of entry like an airport, I have to put a whole slug of money into it," he said.
That slug would be about $200,000, or about 20 percent of the authority's annual budget.
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One issue remains a financial thorn for the port authority. Loftus said there's no action on the authority's 2005 loan deal with Ambassador Bridge owner and trucking magnate Manuel "Matty" Moroun.
In exchange for paying off $2.1 million in bond debt left by a terminal owner, the defunct Detroit Marine Terminals Inc., and reopening the facility, the Moroun-owned Ambassador Port Co. got up to a 90-year concession on operating rights of future transportation facilities developed and owned by the port.
The terminal is now is run by stevedoring company Nicholson Terminal & Dock Co. in a deal with Ambassador Port and the authority.
The authority has paid $1.3 million of the $2.1 million debt owed to Moroun, but interest, fees and penalties had increased the debt to $2.2 million by the end of 2014, Loftus said. The amount owed stands now at about $2.1 million, he said, and the authority doesn't have revenue streams to make much of a dent in the amount owed — which drives some of the effort to finance projects, which can create revenue via fees.
Loftus said Ambassador Port isn't interested in changing the deal's terms. Moroun's organization would not comment.
"I do not see an opportunity for paying off that debt. Basically, there's no change. It still is as big an issue as it's always been," Loftus said. "There are no indications they're interested in changing it. It was structured very favorably to their end. It's a headache."
http://www.crainsdetroit.com/article...-water-traffic
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