Port seeking to purchase property in Citrus LandsSep 16th, 2013 | By Terri Sercovich | Category: top story
Ambitious plans are underway at the Plaquemines Port Harbor and Terminal District as a new era begins under the leadership of Executive Director Maynard J. “Sandy” Sanders.
Ports in the region are experiencing unprecedented growth and leaders here hope to capitalize on the trend.
Sanders, hired after an extensive international search by the Plaquemines Parish Council sitting as the Governing Authorityof the Port, began work on August 5. In accepting the position, Sanders made his priorities known that acquiring land and developing additional rail access would greatly improve the presence of the port.
Grabbing the brass ring for Sanders means acquiring a piece of property at the heart of the 26-mile stretch commonly referred to as Citrus Lands. What was once a collection of plantations in the center of Plaquemines Parish brought together through financial hardship after a great flood, Citrus Lands eventually fell into the hands of Gruppo Ferruzzi, an Italian farming conglomerate that raised cattle on the property for many years. When the Ferruzzi family fell on hard times, the property defaulted to the ownership of Banque Parabas or the Bank of Paris.
Such a vast track, with 26 miles of river frontage, always seemed like an opportune location for large-scale port development and was once considered the site of the Millennium Port, envisioned to be a large-scale container port operated by the State of Louisiana.
In the 90’s, Citrus Lands began to be broken up and sold by the bank. Land was carved out for the Myrtle Grove Marina Estates and large residential acreage tracks along the river at Pointe Celeste were sold.
Others parcels sold off became borrow pits and industrial development sites, but port development seemed elusive.
The property Sanders has his eye on is approximately 550 acres just south of Lake Hermitage Road. The site is part of a nearly 3,000 acre tract and includes 1.5 miles of river frontage that river pilots vessels. Natural scouring at the site allows a 50-foot draft to be maintained naturally.
“This is the prime piece of property for us,” said Sanders. “It has ideal river frontage, has the most usable land on the back levee side, and is close enough to where the rail line currently ends to make a 3-mile extension feasible.”
The property is one of several prime sites identified for possible port ownership in the Port Master Plan, developed by port consultant Trident Systems.
The Port Now Currently the Plaquemines Port District provides fire and security protection for marine vessels.
It collects harbor fees for vessels at anchorage and supplemental harbor fees for loading and unloading, as well as security fees.
Along with deep river ports of St. Bernard, New Orleans, South Louisiana and Baton Rouge, the Plaquemines Port contributes to what consistently ranks as the highest cargo tonnages in the world.
What is lacking in Plaquemines is land ownership for public port development.
“The port governing board has worked hard to accomplish owning property, but various obstacles always got in the way. I am confident we can get it done this time,” said Sanders. Land would give the port the opportunity to market tracks for development. “Timing is so important in completing transactions when working with international operators. If we own the land, we’ll have the opportunity to work with potential clients with much of the advance site planning done. Shortening the time it takes to complete a project can equate to huge savings for port tenants and convince them the Port of Plaquemines is their best choice.”
“We all know our parish has survived on oil andgas revenues for so many years. But as exploration continues to move further offshore, our revenues are decreasing,” said District 4 Councilman, Dr. Stuart Guey, who is chairman of the Port Committee.
This realization prompted the Council to embark on the development of a Port Master Plan in 2009 and in 2010 to begin implementation of that plan.
“Since Plaquemines Parish owns the port, successful development means revenues for the parish in rentals, additional fees and taxes. It also will have a huge spinoff of direct jobs and many of our local businesses will benefit from work needed at the port. The potential increase in the Parish’s tax base will also have long-range positive effects on our millage rates. Not since theleasing of Parish lands for oil and gas development has an opportunity for an economic engine of this magnitude been realized, ” Guey added.
While Sanders and Guey’s optimism on succeeding remains strong, the hurdle of initially purchasing the property still needs to be crossed. Negotiations are underway on the purchase price. Coupled with associated costs and fees, it’s expected to be in the $10 million to $13 million range.
“We created a port investment account several years back, and we have about $2.5 million available. But compared to anticipated costs, there is a wide gap,” Guey said. All methods of financing the property are being examined. “Since we are a state chartered public agency, we are subject to certain public agency financing stipulations with bond commission approvals needed to borrow money. Our options are not as great as private entities,” Sanders said.
Following his initial review, Sanders believes fees charged by the port are below market rates and could be increased, but that process will take a little time. And while the Plaquemines Parish Government has the financial resources and bonding capacity for a purchase this size, Guey says the Council has worked too hard to separate the two entities and the Port must stand on its own in this transaction.
The quickest method of raising the money could be to impose a 3-mill property tax under a provision in the state constitution granting the authority to state-chartered ports to levy up to 5 mills by a vote of the Port Governing Authority.
“We could have this paid for in 3-5 years with idea of financing port expansion projects through tax millages is not new. Many ports do collect property taxes within their jurisdictional boundaries. Guey acknowledges there will be some push-back on additional taxes but he looks upon it as an investment. “If we allow parish income to dwindle, we will certainly face tax increases in the future to sustain revenues,” said Guey. “I believe investing in our port will bring great rewards and it’s the best way to keep our taxes down in the long term. With this short-term millage we will be investing in a long-term tangible asset that will appreciate in value—land.”
Unlike many millages, which can be 10 year, 20 year or permanent encumbrances, this particular one would be tied to certificates of indebtedness and would expire in 3-4 years upon complete payoff of the land purchase.
Sanders and Guey are looking for investment not just from parish residents. Owning the land is just the beginning of what will be needed.
“We will be in Washington this week looking for every option to develop our port and extend the rail,” Sanders said.