New Jersey officials yesterday broke ground on a new $247 million port facility as the South Jersey Port Corp. prepares to issue $56 million of state-appropriation debt in the next few months to help finance site preparations.
The new 190-acre Paulsboro Marine Terminal in southwestern New Jersey will serve as a cargo port. The first phase of the project is set to open in 2012 and officials estimate the development will generate 500 construction jobs and 2,500 direct and indirect jobs once the port begins operations in 2012.
The port is anticipated to generate $10 million to $15 million per year within five years and bring in $20 million annually by 2019, according to a press release.
Lawrence Bashe, managing director at Raymond James & Associates Inc., the book-runner on the $56 million state-appropriation deal, said the SJPC could sell the bonds in November, but the state's Treasury Department would ultimately determine the pricing date.
Bashe and his team are now evaluating several financing alternatives for the development, including taxable Build America Bonds, traditional tax-exempt debt, and alternative minimum tax bonds that under the federal stimulus act would not be subject to the AMT.
DeCotiis, Fitzpatrick, Cole & Wisler LLP is bond counsel on the $56 million deal. Goldman, Beale Associates is the financial adviser.
Along with the upcoming bond sale, the SJPC has used $14.2 million of marine terminal revenue bonds from its $25.8 million sale on Jan. 29 to finance the project's initial design phase. Bashe said he anticipates the remaining $176.8 million of project costs would be financed through additional bond sales, possibly with state appropriation debt.
"We're not at that stage yet, but I don't know how else you'd finance it," he said. "This is a very large development."
Officials estimate Phase I, which will build two 40-foot-deep ship berths, 100,000 square feet of warehouse space, and road and bridge upgrades, will cost $174 million. Phase II consists of a third 40-foot-deep berth, a 20-foot-deep barge berth, and more warehouse space at a cost of $100 million.
"Today marks a milestone in this historic infrastructure project," Gov. Jon Corzine said in a prepared statement. "Nearly one year ago, New Jersey became the first state in the nation to advance its economic recovery plan focusing on development of our critical infrastructure and the jobs and economic opportunities that follow. With shovels in the ground, we can now begin Phase I of the new Paulsboro Marine Terminal, a project that will create jobs, enhance economic opportunity in the region and improve quality of life for South Jersey residents."
The Gloucester County Improvement Authority will oversee the project's development, while CH2M HILL, a global engineering and consulting firm, will draft the final design.
