Port Authority, St. Joe Nearing LOIs

Port Authority, St. Joe Nearing LOIs

By Tim Croft

A tipping point for the development of the Port of Port St. Joe appears nigh.

During a meeting last week, representatives of the Port St. Joe Port Authority and St. Joe Company, collaborators in port development, expressed optimism that letters of intent could be in hand within weeks.

Those long-awaited LOIs have the potential to unblock the flow of state money for much-needed improvements to the Genesee Wyoming rail line that ends on Port Authority land.

Once formalized into operating contracts to use the port for shipping to national and international markets, those LOIs would also provide leverage for state, and potentially RESTORE Act, funds to facilitate dredging of the federally-authorized shipping channel.

"We are close," said Dan Velazquez, vice president with the St. Joe Company. " We have a couple of other prospects out there."

The two LOIs would be with the same manufacturer of wood chips for international markets. No other information in available due to ongoing negotiations.

The company has already finalized on LOI with St. Joe, Velazquez indicated, with the deal with the Port Authority, from which it hopes to lease a portion of the former Arizona Chemical site, to be finalized.

The Port Authority board discussed modifications to the lease agreement, specifically reducing the required security deposit, at the prospect's behest, and deciding to lease a portion instead of all of the property.

"If you lease the whole property there is no room to grow," said board chair Eugene Raffield.

The key to the property is the truck scales; by dividing the property access to those scales is available to multiple tenants.

Further, the Genesee Wyoming rail line bisects the property.

St. Joe has pledged to accommodate the prospect's future land needs through its land surrounding the Port Authority's 32 acres.

"We'll find room for them" Velazquez said. "As (Raffield said), let's not put all our eggs in one basket."

Collectively, he added, the Port Authority and St. Joe are working through final details to cement a deal that can be taken to Tallahassee to compel state officials to release millions appropriated for rail improvements and in turn the dredge work.

"Time is of the essence," Raffield said. "If we don't have something soon that rail money could go elsewhere."

Meanwhile, work is reaching the midpoint on the design of infrastructure to hold the roughly 5 million cubic yards of spoil material to be dredged from the shipping channel.

Tommy Pitts, project manager with engineers Hatch Mott MacDonald, said the field work had been "frustratingly" slowed, but that nearly all that work was completed and the effort moved into the company's offices.

"We are proceeding and we are well beyond the 40 percent that has been invoices" to date, Pitts said.

In addition, the Port Authority received some financial breathing room in the form of a loan from the St. Joe Company to help offset administrative costs over the next two years.

The Port Authority, and staff of one, in entirely a volunteer endeavor and if plans unfold as hoped over the coming two years the board will have a revenue stream and the ability to hire full-time staff.

St. Joe is already in discussions concerning a consulting to assist in the market of an operational port, Velazquez indicated.

updated: July 27, 2016, 10:21 am

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