Senate panel approves Southport terminal deal

A state Senate committee Tuesday approved legislation paving the way for transfer of 180 acres from the city to the state for a new Southport Marine Terminal in South Philadelphia.

State Rep. William Keller (D., Phila.) was all smiles as the Senate government committee voted unanimously for an amended version of Keller's House Bill 666 - with the support of Mayor Nutter and Gov. Rendell - to give 142 acres of land and 38 acres of water at the Navy Yard to the Philadelphia Regional Port Authority to create a marine terminal south of the Walt Whitman Bridge.

The measure will now go to the full Senate, probably June 7, and to the House, which could vote June 8, and then is expected to be signed by Rendell, who has pledged up to $25 million for permitting, site preparation, and utility infrastructure for Southport.

The bill stipulates that the Philadelphia Authority for Industrial Development will deed the 180 acres to the Port Authority.

"This will be the biggest economic development project the region has seen in 50 years in creation of jobs," said Keller, a former longshoreman and a South Philadelphia Democrat who lobbied more than five years to get the acreage at the eastern end of the Navy Yard.

Combined with land already owned by the Port Authority, and a small parcel to be acquired from Norfolk Southern railroad, the total land for Southport will be 239 acres. An additional 38 acres of riverbed will be a waterway, but is unlikely to be used or filled in.

"This amendment sets the framework for what Mayor Nutter and Rep. Keller agreed to - it's a very big step," said Gregory Iannarelli, the Port Authority's chief counsel, at the state capitol.

What port proponents wanted was a large-enough land parcel to interest steamship companies and terminal operators to design, build, finance, and manage a modern terminal complex to attract more container cargoes and create waterfront jobs.

The state issued a solicitation for bid proposals May 12. Last Thursday, potential bidders and investors logged on to a "webinar" to learn more about the development and details for submitting proposals and technical concepts by July 12.

Attendees to the online presentation included investment banks, among them Barclays Capital, Bank of America Merrill Lynch, BMO Capital Markets, Goldman Sachs, J.P. Morgan, Morgan Stanley, and UBS Investment Bank.

Terminal operators and shipping companies participated, including Holt Logistics Corp., Hyundai Merchant Marine, Penn Terminals Inc., and Ports America. Contractors on the call included A.P. Construction Inc., Judlau Contracting Inc., Keating Building Company and Keating Project Development Inc., and OHL Concesiones.

Once the initial proposals come in, three or four bid teams will be selected to continue, the Pennsylvania Department of General Services said.

A preferred bidder is expected to be chosen in September.

Tight credit and the bad economy delayed the Southport project a year ago.

Because of an improving economy - along with the deepening of the Delaware River shipping channel to 45 feet from 40, which began March 1 - port officials now are optimistic that Southport will happen.

Keller had contended that 305 acres at the 1,200-acre Navy Yard belonged to the state under "riparian land" rights. It was once part of the Delaware River bed and was filled in by the Navy.

Keller introduced legislation three times in Harrisburg, contending the Navy had no right to deed those acres to the city in 2000. Although his bill passed the House three times and the Senate in 2008, it was vetoed by Gov. Rendell.

Recently, Mayor Nutter and Keller worked out an agreement where the city would hold "legal title" for development at the Navy Yard, but would deed 180 acres to Southport.

The land transfer will not interfere with 52 acres developed by Liberty Property Trust, or an envisioned project by HelioSphera, a Greek company that wants to build a $500 million thin-film solar-panel factory in the Navy Yard.

Southport's larger footprint should satisfy criticism that the bid process last year frustrated potential bidders because the land was not clearly defined and bidders had to do expensive engineering work to submit a bid.

A California-based terminal operator, TraPac Inc., wrote Rendell last July that the Southport concept did not contain sufficient wharf or backland area to stand alone and function as an independent terminal.

The new acreage should counter those objections.