Md. agrees to 50-year lease of state port facilities
Saturday, November 21, 2009
Maryland Gov. Martin O'Malley announced Friday an agreement to give the nation's largest port operator control of the state-owned portion of the Port of Baltimore for the next 50 years in exchange for the company's promise to invest hundreds of millions of dollars to expand and maintain the facility.
The deal is intended to created thousands of jobs, particularly over the next four years as Ports America begins construction on a berth big enough to accommodate some of the world's largest container ships. The huge vessels are to begin reaching the East Coast from Asia in 2014, after completion of a project to widen the Panama Canal.
Construction of the berth and cargo cranes is expected to create 1,000 jobs. An additional 2,000 workers would be employed in coming years to fix roads, bridges and tunnels around the terminal.
Ports America would immediately pay the state $100 million toward the improvements if the state's General Assembly and Board of Public Works confirm the deal.
In the long term, the state expects the expanded port to provide 2,700 more jobs a year and $15.7 million more in annual tax revenue.
For O'Malley (D), the agreement could provide not only an economic boost but also a political one after elections last month in which voters appeared to punish Democrats for failing to do more to spur job growth.
The ports deal would yield more than twice as many construction jobs as have been created so far in Maryland with federal stimulus money.
Flanked by dozens of applauding port workers, O'Malley praised the deal as job-creator. "Sing it with me people, 'Jobs, jobs, jobs.' . . . This deal is all about job creation in Maryland, job creation now . . . not 10 years from now, not 20 years, but job creation now."
Don Norris, chairman of the Department of Public Policy at the University of Maryland Baltimore County, said the deal appeared to be a good one for Maryland, which had been searching for more than a year for a way to fund construction of the larger berth because the state's transportation trust fund lacked the capital.
"The state absolutely needed a big partner with deep pockets to stay competitive. Ports on the East Cost that are not ready [in 2014] will suffer a terrible competitive disadvantage," Norris said.
But he said the duration of the lease could be problematic.
"I don't want to second-guess, but 50 years is a long time. . . . I hope there are performance measures to make sure the state continues to get what it wants."
Friday afternoon, the five-decade lease did not appear to be a hang-up for the state's Democrat-controlled legislature. Alexandra Hughes, a spokeswoman for House Speaker Michael E. Busch (Anne Arundel), said he and the chamber's budget leaders supported the plan. "He loves it -- as do the chairmen," Hughes wrote in an e-mail. "I think we're all in for lots of jobs."
The new division of Ports America, which has operated the state's Seagirt terminal since 1990, will have the right to move, consolidate and make many other changes to the container business at the port.
The 200-acre site will continue to be owned by Maryland, which will also maintain control of port security. Also under the deal, the state will begin to receive a $15 fee for every container above 500,000 moved through the port annually. Last year, according to state statistics, more than 600,000 containers were offloaded or loaded at Seagirt.
"This agreement took us a while to hammer out, but I think it's one of the best in the country; it sets a new bar," O'Malley said. "It not only creates jobs now but maintains this important asset for Maryland, and it doesn't sell the public interest short."