The Philadelphia Regional Port Authority sees big economic potential for its plans to develop a 194-acre site at the tip of the Philadelphia Navy Yard.
The authority has issued a request for qualifications inviting developers to step up as part of a public-private partnership to help establish new maritime businesses at the Southport Marine Terminal Complex along the Delaware River. The agency is crafting the RFQ and eventual request for proposal processes to encourage a full range of maritime commerce cargo opportunities at the South Philadelphia property.
Gregory V. Iannarelli, chief counsel for the PRPA, said Pennsylvania officials helped pave the way for the project by allowing the agency to complete pre-construction and permitting work at the property in anticipation of private development. He said the RFQ process, which is being overseen by PRPA’s financial advisor Ernst & Young, aims to determine opportunities for cargo as well as manufacturing and energy companies.
“This project is well positioned and has lot of support,” said Iannarelli, who has been PRPA chief counsel since 2000. “We’re trying to balance an adequate mix of industries.”
PRPA is an independent state agency formed in 1990 to acquire port facilities along the Delaware River in Philadelphia. The authority leases terminal and pier facilities to various operators with the commonwealth of Pennsylvania providing capital and operating funds. Moody’s Investors Service last rated PRPA at Aa3 in August 2008 just before it issued $43.3 million in commonwealth lease revenue bonds.
A study released in May by Philadelphia City Controller Alan Butkovitz found that more than 8,000 jobs could be created by utilizing the Southport land for containers, autos and energy. Butkovitz estimates that adding these industries to the property would generate between $240 million and $336 million in wages resulting in $10 million to $13.5 million in new annual tax revenue annually for the city. He emphasized with the expansion of the Panama Canal nearly complete, it is important to position Philadelphia for increased cargo traffic.
“It offers the potential for thousands of jobs,” said Butkovitz, a former state assemblyman who was first elected controller in 2005. “It would make a major dent in Philadelphia’s unemployment rate.”
A previous effort to develop Philadelphia’s ports in 2006 failed to garner enough support and was scuttled by the 2008 recession.
PRPA board member Robert J. Clark said conditions are better suited to develop Southport now because of increased cargo demand, support from Gov. Tom Wolf and an improved economy. He said the Southport development will continue the authority’s momentum as the federal government completes a project to deepen the shipping channel on the Delaware River to 45 feet from 40 feet, strengthening cargo capabilities.
“This project is about thinking big,” said Clark, who is an associate at Philadelphia-based law firm Ballard Spahr. “We are ready to transform.”
In addition to support from the state, PRPA also has backing at city level from expected new mayor James Kennedy, who won a Democratic primary in March in his bid for the seat of incumbent Michael Nutter, who can’t run again because of term limits.
Philadelphia City Council President Darrell L. Clarke said he is encouraged by movement on the Southport development as well as leadership on the project from the Wolf administration and PRPA chairman Gerard Sweeney.
“Expanding the Port of Philadelphia in a deliberative and thoughtful way has always been more important than expansion for expansion’s sake,” said Clark. “I look forward to working with our regional partners to make sure that whatever form this project ultimately takes, that it creates thousands of family-sustaining jobs and skills training opportunities to Philadelphia.”
Philadelphia is rated A-plus by Standard & Poor’s, A2 by Moody’s Investors Service and A-minus by Fitch Ratings. Pennsylvania was downgraded by all three ratings agencies last year due to budget and pension challenges and is rated AA-minus by Fitch and S&P with Moody’s rating the commonwealth’s general obligation debt Aa3.
Pennsylvania State Rep. Bill Keller, D-Philadelphia, said taking advantage of the city’s location by the Delaware River is long overdue and especially vital due to the Panama Canal expansion. Keller, ranking Democrat on the House Transportation Committee, said adding maritime industries to Southport is timely given that more cargo is shipping to the East Coast because of labor challenges in the Pacific region.
“We have a very good footprint for the future of the Port of Philadelphia,” said Keller, who worked as a longshoreman from 1968 through 1992 before being elected to the Pennsylvania House. “This could be real economic impact.”
Villanova School of Business professor David Fiorenza said the terminal’s location makes it ideal for jobs growth in Philadelphia, surrounding Pennsylvania suburbs as well as nearby New Jersey and Delaware.
“The planned development of the Southport Marine Terminal Complex would have a major impact affecting a reach beyond Philadelphia as a quarter of the nation’s GDP and population are located in the Northeast section of the United States,” said Fiorenza. “The terminal would have a reach for almost every continent to move goods from their location before setting upon Philadelphia.”
“If the Philadelphia Regional Port Authority can enter into a public-private partnership with a clear funding mechanism, then the project will go forward,” Fiorenza said. “Every industry within the construction business will be positively impacted with the development of the Southport Marine Terminal Complex.”
The PRPA is planning to send requests for proposals to a shortlist of RFQ submitters by the end of December and make a selection in July. Iannarelli said the goal is to have the Southport project under development by 2017.
“We have a lot of people out there competing for our attention,” said Iannarelli. “It’s an exciting time for us.”