N.Y.-N.J. port: Terminal purchase reflects region’s appeal
Officials at the Port Authority of New York and New Jersey were viewing the planned purchase of their biggest tenant as a vote of confidence in their port’s future Tuesday.
At a press conference organized to talk about the port’s record cargo volumes in 2006 and plans to invest $2 billion at the port over the next decade, questions abounded about the announcement hours earlier by Deutsche Bank that it was going to buy Maher Terminals.
Anthony Coscia, chairman of the agency, said the Maher deal and other recent sales of marine terminals in the port was a “validation” of the port and his agency’s continuing investment in facilities, as well as evidence that the region was a “sought after marketplace.”
Neither he nor Port Commerce Director Rick Larabee said they were surprised by the deal, in which Maher will be bought by RREEF Infrastructure, a part of RREEF Alternative Investments, the global alternatives asset management business of Deutsche Bank’s Asset Management division.
In addition to its 445-acre terminal in Elizabeth, N.J., Maher is developing a major container terminal in Prince Rupert, British Columbia, which is expected to open later this year.
Coscia was challenged about why the purchase of Maher by a German company might be acceptable, while the purchase of P&O Terminal facilities in New York and elsewhere in the country by Dubai’s DP World had sparked a national uproar. He demurred to discuss the issue, noting that such questions were national policy and not the purview of the port authority.
He and Larabee said their review of the Maher sale will instead focus on whether the new buyer would be able to continue to run facility well and whether the new buyer is willing to commit to future investments and perhaps compensate the port authority for past investments.
Deutsche Bank has said the same management — including brothers Brian Maher, chairman and chief executive officer, and Basil Maher, president — would continue to operate the terminal.
The insurance company AIG, which earlier this month closed on its deal to purchase a container terminal in New York and stevedoring businesses elsewhere in the country from Dubai Ports World, agreed to invest a minimum of $50 million at the Port Newark Container Terminal — including $10 million for investment around the terminal already completed — which will be used for rail improvements.
Larabee noted that prior to the deal, PNCT had invested heavily in the facility, about $250 million, and that the terminal had also benefited from the about $80 million in port authority spending on dredging and other general port authority improvements.
It’s not yet known what sort of compensation the port authority will seek from Deutsche Bank for the much larger Maher Terminal.
Jim Devine, president of New York Container Terminal, said his company is still discussing what contribution the buyers of his facility, the Ontario Teachers Pension Fund, will make for past and future improvements at his terminal at Howland Hook on Staten Island.
Sale of the Global Marine Terminal, which is not located on port authority property, to the teachers fund has been completed.
Port authority officials say they believe it is proper that the agency be compensated for improvements to facilities when their tenants seek to transfer leases to new buyers.
The $2 billion that the port is planning to spend is part of a previously announced $26 billion capital plan for the port authority’s facilities through 2016 — including airports, tunnel and bridge construction and maintenance and work at the former World Trade Center site.
At the port, some major expenditures include:
* $679 million on dredging, including deepening some channels to 50 feet.
* $299 million on marine terminal development and redevelopment, much of which involves demolishing sheds and relocating warehouses on dock to areas slightly further from the quays.
* $237 million on rail infrastructure.
* $239 million on roadway improvements.