Executives to discuss their plans for local port

Executives from the three firms that want to lease or help operate the Virginia Port Authority's terminals will get a chance to present their plans today before a General Assembly subcommittee meeting in Virginia Beach.

They'll do so amid uncertainty about the delayed appointment of an independent review panel to weigh their proposals, the transition to a new administration in Richmond and ongoing talks about a possible lease deal between the Virginia Port Authority and privately owned APM Terminals in Portsmouth.

In March, CenterPoint Properties Trust, a Chicago-area industrial real estate firm, filed an unsolicited bid to lease the port's terminals for 60 years under the state's

Public-Private Transportation Act. The law allows public entities to enter into agreements that let private firms "develop and/or operate qualifying transportation facilities," according to state guidelines.

This summer, two other bidders - a partnership of Seattle-based Carrix Inc. and New York investment bank Goldman Sachs, and a Washington, D.C. -based private equity firm, The Carlyle Group - filed competing proposals. The three bids come with upfront cash offers ranging from $250 million to up to $700 million.

The talks between the authority and APM raise significant questions for Center-Point, the firm's president said this week.

"We just bid on a house, and the seller tells us, you know, we're planning an addition, but we're not going to tell you what that addition looks like and how it's going to be decorated - but we're telling you it's going to make the house more valuable," CenterPoint's Paul Fisher said. "It's a little bit strange to be offering money for an asset and not know what you're really going to get."

Whether the presentations at today's noon meeting at the Virginia Aquarium & Marine Science Center will help advance the firms' proposals is unclear. The subcommittee, meeting for perhaps the last time, has no approval authority.

Last year, the General Assembly passed a bill patroned by Del. Bob Purkey, R-Virginia Beach, setting up the joint subcommittee to study what at the time seemed remote - the possible privatization of the port or some of its terminals.

Such deals are common at other U.S. ports, including the port of New York and New Jersey; Oakland, Calif.; and, most recently, Baltimore.

What had been hypothetical became real this year with the filing of the three proposals.

The next step in the bid process is for the three proposals to be considered by an independent review panel appointed by Secretary of Transportation Pierce Homer.

T he naming of the panel has been anticipated since Labor Day.

"Chairman Purkey is exercising legislative oversight and inquiry," Homer said recently. "... The independent review panel will be announced shortly and it will be conducted in conjunction with the transition process to the new administration."

Asked why it has taken so long to name the panel, Homer cited the ongoing discussions between the authority and APM, which owns the $500 million Portsmouth terminal that opened two years ago.

"Those conversations need to be considered by the proposers as well as the commonwealth to initiate the PPTA process," said Homer, referring to the Public-Private Transportation Act.

"The issues will be fully vetted in front of both the legislative and the executive branches."

The length of any lease between the authority and APM particularly concerns CenterPoint, Fisher said.

"If we negotiate a 60-year concession, we would hope that the deal with APM is 60 years long," he said. "If it's shorter than that, maybe, to an investor like us, that would make the transaction unattractive."

Robert McCabe, (757) 446-2327, robert.mccabe@pilotonline.com