Partnership to strengthen and expand VA Ports

CenterPoint Properties has proposed a strategic partnership with the Commonwealth to enable the Port of Virginia to reach its full potential as an employment and economic generator for the state of Virginia.
CenterPoint’s conceptual proposal, submitted to Virginia’s Secretary of Transportation under the state’s Public Private Transportation Act (PPTA), does not call for a sale of the Port’s assets, but instead details a true partnership which, if accepted, would be documented in a comprehensive and binding sixty-year concession agreement aligning the interests of CenterPoint with those of the Commonwealth.
Under the proposed strategic partnership,
•    CenterPoint 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. 
•    This capital would include funds to modernize the Port and provide both up-front and ongoing fixed payments to the state.
•    Profit sharing would allow the Commonwealth to benefit in the future from the growth in port business. 
•    CenterPoint would release the annual subsidy provided the Port from the Commonwealth Transportation Fund.
•    The dollars CenterPoint pays the state of Virginia, and the foregone subsidy, could be used for off-port rail and road infrastructure to ease area congestion or for other pressing needs. 
•    CenterPoint would increase payments to the municipalities hosting Port facilities.
•    The proposal includes funds for the development of Craney Island, which would dramatically expand the Port’s capacity.
Apart from substantial capital, CenterPoint would enhance the appeal of the Port to shipping lines by integrating its extensive logistics and distribution real estate experience with the operating expertise of Virginia International Terminals (VIT).  CenterPoint would acquire and employ VIT to run the Port under the continued oversight of the Virginia Port Authority (VPA). Importantly, because CenterPoint is not aligned with any steamship line, its participation in the Port’s management ensures a level playing field among existing and prospective customers.
“We believe our capital, but more importantly our transportation, logistics, and development experience, complement the Port,” says Paul Fisher, CenterPoint’s President. “Packaged with port services, our Virginia and other inland distribution centers can attract new customers to the Commonwealth. Our domestic financial strength will assure that the Port of Virginia can offer modern facilities and expand to include Craney Island when additional capacity is needed. A modern port, with great inland connectivity, is what the market demands. Our partnership with the Commonwealth can provide it.”

CenterPoint Properties: A Unique Partner to Grow Virginia Port Business

Established in 1984, Chicago-based CenterPoint Properties is nationally focused on the development, ownership and management of industrial real estate and related rail, road and port infrastructure. Currently, the company owns and manages more than 27.8 million square feet of warehouse and industrial real estate and is developing +9,000 acres in intermodal rail and port markets along strategic trade lanes in North America. Publicly traded from 1993, CenterPoint was acquired in 2006 by CalEast Global Logistics, LLC, a wholly owned subsidiary of the California Public Employees’ Retirement System (CalPERS), the largest United States pension fund. CalEast is advised by LaSalle Investment Management, which is also an investor in CenterPoint.
CenterPoint is uniquely qualified to partner with the Commonwealth due to the depth and patient nature of its capital. Its established development expertise can help position and market the Port, along with its ability to attract volumes by putting at the disposal of Port customers its major Virginia and inland distribution center projects. “Our real estate and transportation expertise can ensure the Virginia terminals become the dominant port on the East Coast. By crafting a relationship with a strong public-private partner such as CenterPoint, Virginia can protect and grow its vital maritime industry and spur economic growth and job creation,” said Mr. Fisher.

CenterPoint Is Already Invested in Virginia to Promote Port Growth

CenterPoint is developing a major integrated logistics center in Suffolk, capable of accommodating 5.8-million square feet of warehouse/distribution facilities on more than 900 acres. The company’s investment will exceed $350 million, which will generate significant tax revenue and thousands of new jobs.  “This development will address the shortage of distribution facilities in the Hampton Roads area, is limiting port growth,” says Neil Doyle, Executive Vice President of CenterPoint. “Our company has developed similar large scale distribution parks in the Midwest with excellent rail connectivity to Hampton Roads. The availability of these centers to existing and potential port customers will expand port volumes and increase jobs and overall economic activity.”

The PPTA Process Will Fully Vet CenterPoint’s Proposal

Under the PPTA, the Secretary of Transportation will review CenterPoint’s proposal, and if he deems it to be consistent with the Commonwealth’s goals, principles and priorities, it will be forwarded to the Virginia Port Authority. If the VPA confirms that the proposal meets all legal and policy requirements, and deserves further evaluation, a formal notice will be posted, and others will be invited to submit competing bids. “We respect Virginia’s process, which is designed to be cautious and transparent,” says Mr. Fisher. “At the appropriate time, we look forward to presenting our proposal in more detail and explaining its merits.”