Mcdonnell 'very cautious' of barging into deal for ports

Gov.-elect Bob McDonnell this week said he was "very cautious" about proposed, long-term deals involving the assets of the Virginia Port Authority, a week after executives from private firms seeking such ventures made their cases to a state panel studying the issue.

McDonnell, who will be sworn in next month, described the port as an "amazing asset for Virginia," which could become "the best port on the East Coast in a decade."

"So I'm very cautious about selling or leasing that asset," he said. "... To be able to predict what is a good deal today for a 60-year lease of that port is very tough to do. It would have to be an intensely compelling financial offer."

McDonnell made the remarks Tuesday at a media event in Richmond.

He proposed a three-part test for consideration of the proposals:

• Does it make sense under any circumstances to convey an asset like the port to the private sector?

• Are there some things that a private-sector entity could bring to the table, "in terms of dollars for new capital improvements to the port," that the public sector would not be able to provide?

• Are the dollars on the table - both upfront and of shared revenue streams - so compelling that, "taking every variable that might occur for 60 years" into consideration, the offer is "a really good deal for the taxpayer"?

"If we can't pass that test, then I'd say we don't do it," McDonnell said.

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

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 $700 million.

None of the groups has expressed any interest in buying the assets of the port; instead they all propose establishing "partnerships" with the Virginia Port Authority.

The next step in the state's consideration of the proposals is likely to be the appointment of an "independent review panel" by state Secretary of Transportation Pierce Homer.

Homer said in an e-mail Wednesday that the new administration will play a role in naming the panel.

"We have always said we would do the panel in concert with the incoming administration," Homer wrote.

Pilot writer Bill Bartel contributed to this report.

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