Agreement reached on transfer of Staten Island terminal
The Port Authority of New York and New Jersey, the parent company of Orient Overseas Container Line, and the Ontario Teachers Pension Plan have come to terms on the transfer of the lease of the New York Container Terminal (NYCT) at Howland Hook.
The agreement brings to an end a tussle between the parties over how much money OOCL and the pension plan would contribute for past and future port improvements in order to receive approval for transfer of the remaining 12 years on the terminal lease to the pension plan.
Orient Overseas International Ltd., the parent of the container carrier OOCL, first announced last November that it had agreed to sell its terminal business at four locations — NYCT, the Global Marine Terminal in Jersey City, N.J., and two terminals in Vancouver, British Columbia — to the pension plan for $2.35 billion.
In New York it needed port authority permission to transfer the lease at Howland Hook. The Global terminal is on private land and did not require port authority review.
The two parties strongly disagreed on the level of financial contribution that should be made in order to obtain approval for the terminal transfer.
“We are pleased that we ultimately were able to get a relatively fair deal out of all this turmoil,” said Jim Devine, president of NYCT. “It’s about as close to a win-win out of the situation that we could have gotten. The terminal can now move forward under the stewardship of the Ontario Teachers.”
The port authority said the terms of the agreement “will protect the port authority’s significant public investment in Staten Island’s maritime facility and will ensure the long-term health and growth of the port.”
The terminal has about 475 employees.
“Ontario Teachers, through its operator, New York Container Terminal Inc., has committed a total of $51 million to this transaction, including at least $30 million in capital expenditures in the terminal during the lease period,” the port authority said in a statement.
The agency said NYCT will also pay $16 million in cash to the port authority, which will be reinvested in port infrastructure, and will reimburse the port authority upon mutual agreement for up to $5 million of expenses the agency will incur for future roadway access to the terminal.”
The agency said that, “under the agreement, Ontario Teachers will acquire the remaining 12 years of the Howland Hook lease from Orient Overseas International Ltd. These commitments will ensure that the port terminal continues to prosper, and provide job growth and economic activity for Staten Island and the region for years to come.”
In addition to its financial commitment, the port authority said it had “concluded that Ontario Teachers will be a suitable owner and terminal operator, committed to the continuing resurgence of the terminal and the Port of New York and New Jersey.”
The port authority has invested heavily in the terminal in recent years, both in dredging the channel and berth leading to the terminal to 42 feet and in construction of rail improvements.
Devine said he expects on-dock double-stack rail service to start up at the terminal in about one month.
Agreement reached on transfer of Staten Island terminal
