Port Authority sets vote for $800M lease deal

NORFOLK

The Virginia Port Authority's board is planning a special meeting on June 24 to consider ratification of the $800 million, 20-year lease deal announced recently with APM Terminals in Portsmouth, port officials said Tuesday.

A date for a decision by APM Terminals was not available Tuesday. "I can tell you that we are still targeting July to begin transition activities," Allison Enedy, an APM spokeswoman, said in an e-mail.

The agreement calls for the Port Authority to pay $40 million a year for 20 years to lease APM's new $500 million terminal in Portsmouth.

Much of Tuesday's meeting of the Port Authority board concerned a financial update on the port's fiscal year and budgets for the new fiscal year starting July 1.

Assuming the APM Terminals agreement is ratified, however, the budgets are expected to come back before the board at its July 27 meeting to reflect the integration of APM's Portsmouth terminal, said John G. Milliken, who chairs the Board of Commissioners.

Meanwhile, the port's cargo volumes are rebounding. Portwide, including at APM Terminals, the number of 20-foot cargo containers handled grew 12 percent in the January-April period, compared with the same time a year ago.

Revenue and container traffic figures for the first 10 months of the fiscal year, however, continued to lag behind those of a year earlier at facilities operated by Virginia International Terminals Inc., the authority's tax-exempt operations affiliate, reflecting poor volumes late last year as a result of the worldwide economic slowdown. Container traffic was down about 5.8 percent this fiscal year and operating revenues were 2.8 percent less, dropping to $170.1 million, according to combined financial results of VPA and VIT presented Tuesday.

The results show an operating loss of $8.9 million for the first 10 months of the fiscal year.

"We continue to dig our way out of the hole we found ourselves in last fall," said Russell Held, the authority's deputy executive director/development, regarding the improving volume numbers. "The comeback has been through the first four months of the calendar year - and we're seeing everything turn to positives."

The board also approved a 5 percent raise in the base pay of Joseph Dorto, president and CEO of VIT. His salary will increase to $486,263, starting July 1. He also can earn up to 65 percent of his base pay as a performance incentive.

Dorto did not receive a pay increase or bonus for the year ended June 30, 2009. A decision on whether he will receive a bonus for the current year won't be decided until after July 1, Dorto said.

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